The U.S. has called upon India to open up its markets and further liberalise trade policies in order to strengthen bilateral ties.
Speaking at a conference organised by the Asia Society here on Saturday, Assistant Secretary of State Robert Blake mentioned four areas where India should change its laws to make the market more open and receptive to foreign capital: increasing the cap on foreign direct investment, reducing agricultural import barriers, lowering barriers to infrastructure development (by developing a long-term debt market and removing local content requirements) and reducing regulatory barriers to business.
“While an emerging middle class has helped compensate for these challenges, reforms could bring India to the double-digit growth path it seeks … it will also promote inclusive growth throughout South Asia where intra-regional trade accounts for just five per cent of the region's total trade.”
Mr. Blake's observations come three days after India and the U.S. signed a framework for cooperation in trade and investment, the implementation of which will be overseen by high-level officials from both countries.
Success in the Doha Round, he said, depended on “clarifications” by “advanced” developing countries like China, Brazil and India on the opportunities available in their markets.
“Just as Americans benefit from our open economy, Indians will benefit from a renewed commitment to make their markets more accessible for outside investors.” Open markets through lowering of “self-imposed” trade barriers would also strengthen India's strategic partnerships, make it a more “relevant” player and help it achieve its “rightful place” in the global order.
The U.S. official singled out the Bharti-Walmart joint venture Best Price to illustrate how “a company and the [Indian] community are being held back” by the existing laws.
Mr. Blake noted the increase in bilateral trade and pointed out that India, from being the 18th largest trading partner in 2008, jumped four places the next year. “We'd like to see it make the top 10 in 2010.” Appreciating the 64 per cent annual average increase in Indian investment in the U.S. over the past four years, he said this helped in job creation.
On India-U.S. ties in general, Mr. Blake said the strategic dialogue touched nearly every corner of the bilateral relationship — from terrorism to women's empowerment; from clean energy to the goal of a second green revolution. He referred to U.S. President Barack Obama “dedicating [the hosting of] his first and thus far only state visit” to Prime Minister Manmohan Singh as a “clear signal that he [Obama] considers the U.S.-India relationship a key cornerstone in shaping the 21st [century] world.” As the U.S. confronted global challenges like terrorism, pandemics and climate change, “we need India as a global partner,” Mr. Blake said.