India needs tough steps to boost trade to $500 bn, says US

Calls for greater free trade access

The US on Friday said its bilateral trade with India can grow fivefold to $500 billion provided both the governments take "tough" and "vital" decisions in that direction.

 Addressing an event here, Nancy Powell, who resigned from the post of US Ambassador to India earlier this month, said: "This will require both governments to make some tough, but vital, decisions...Yes, achieving $500 billion in bilateral goods and services trade will be challenging, but that should not hold us back from setting an ambitious goal". 

Currently, bilateral trade stands at about $100 billion. The US-India Business Council (USIBC) had said bilateral trade between the countries could touch $500-billion mark over the next one decade. 

Suggesting if the borders of both nations are open to free flow of capital, goods, services, technology, ideas, and innovation, Powell said there is no reason why trade will not flourish. 

"On Friday, I challenge all of us, our governments, and leaders across politics, business, academia, and society to work together to realise the full potential of the US-India trading relationship.  "One possibility might be the convening of a Track 1.5 event during the first 100 days of the new Indian government to begin a conversation on how we can best accomplish this task," she said adding robust engagement is a cornerstone of a healthy bilateral relationship. 

She also said: "While we are strongly opposed to forced local content requirements, we are sympathetic to the desire to develop a stronger manufacturing sector, and are ready to discuss how India might develop that capacity in a way that does not constrain trade". 

"By the same token, we ask that India engage with the United States, at senior and working levels, to have those difficult discussions on issues such as intellectual property rights and taxation," she added. 

In February, the US has dragged India to WTO on the country's solar mission plan that allows only local equipment.  She said that to take the trade to $500 billion, both sides can focus on sectors including civil aviation; defence; infrastructure; energy; healthcare; IT services and agriculture. 

About defence sector, Powell said the segment continues to be an area of increased cooperation and great potential.  "We want to help India in its efforts to modernise its military by co-producing and co-manufacturing the next generation of defence technology. 

"When we make the same equipment, we operate the same equipment, and we also build connections that reinforce our overall defence relationship. Here is where prosperity blends into security as our defence collaboration contributes to our common interest to promote regional and global stability," she added.  

Powell said that taking the bilateral trade to $500 billion would have significant impact on economies and citizens of both the countries.