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Formal negotiations around an India-US Free Trade Agreement (FTA) will not be an immediate priority for US President Joe Biden, but both countries need to take measures to create a better climate to start down the path when the time comes, says US- India Business Council President Nisha Biswal. In an interview to BusinessLine, Biswal outlines priorities for the Biden administration and how they will shape the relationship between the two countries going forward. Excerpts:
Trade tensions have been high between India and the US under the Donald Trump regime be it around imposition of unilateral tariffs on Indian products, withdrawal of GSP benefits or tightening of H-1B visa regime. To what extent will things be different under US President Joe Biden?
Trade is always the most contentious part of any relationship between democracies. But I do think the Biden administration will have a different approach. They hold a different view than the Trump administration on tariffs, etc. That will create some space for India and the US to work together.
As the Biden administration seeks to reverse the Section 232 tariffs (unilateral tariffs imposed on items such as steel and aluminium on national security grounds), restore GSP benefits (duty-free access for some items) and take strong and bold steps on immigration including H-1B visas, we will take the opportunity to address some of the issues that have been hanging in balance on the Indian side. These are with respect to price control policy in medical devices, pharmaceuticals, ICT tariffs etc.
If both sides create a favourable climate, that will allow us to pursue a more ambitious trade relationship. We need our economies to be thriving and to see more manufacturing and supply chains that connect US and India.
How soon do you think India and the US can re-start work on a FTA that has eluded both sides so far despite huge efforts?
I think the very first focus that both India and the US will have is to overcome the virus and jump start economic growth. I don’t know if formal negotiation around an FTA is necessarily going to be top priority for the first 100 days or even the first six months of the Biden government. But I do think the way in which we collaborate on Covid and help to re-start economic growth and economic investment will create a better climate for us to start down the path of an FTA when that time comes.
When you talk about the right environment, do you also look at addressing the H-1B restrictions imposed by Trump?
This is going to be a priority for the Biden administration. It will surely address immigration and a number of other issues where there were sharp divergences of views (between the Trump administration and the Democrats). India will be reassured by some of the actions. And India, in turn, can take some actions to reassure the Biden administration as well.
What are the top areas that the USIBC wants India and the US to focus on?
We should deepenour collaboration in life sciences and ensure that new and innovative products in pharmaceuticals and medical technology are able to be produced and made accessible in India, the US and around the world. There is a big opportunity for collaboration on creating the right eco system.
Investing in infrastructure is another important area. I think the Biden administration will come in with big focus on modernising US infrastructure. I know that it is a priority for Prime Minister Modi as well. We would like to see the US and Indian industry play an increasingly important role in helping to rebuild and finance infrastructure needed for both countries to really position for the future. It will create jobs and drive economic growth. Technology and digital space are also going to be extremely important.
What kind of collaboration do you envisage in the digital space?
Technology will drive much of the economic growth and the digital economy is going to be ever more important. The US and India need to harmonise their approaches. Neither country has firmly fixed its regulatory approach towards technology and data. There is no reason why we can’t be more collaborative both on government to government basis and between government and industry. We can then make sure that we are creating the right environment for our companies to become the predominant companies to shaping the global digital future.
The Trump administration had somewhat distanced itself from the World Trade Organization and had questioned its functioning. Do you see the approach changing now?
I do think the Biden administration will work to re-engage more deeply with the WTO and strengthen it. I think this will be another area where the US and India will have some common interests. This is because India too has stepped forward in the recent years to say that the WTO needs to be strengthened.
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