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India-U.S. CEO forum to further strengthen bilateral economic ties

  • Published
    11th Nov, 2022
Context

India-US CEO Forum virtually discussed ways to further strengthen economic ties between the two countries.

About

About India-US CEO Forum:

  • The U.S.-India CEO Forum was created in July 2005. The Forum is a true public-private endeavor to enhance bilateral trade and investment.
  • This is the sixth time the Forum has been convened since its reconstitution in 2014.
  • The Department for Promotion of Industry and Internal Trade (DIPP) is the nodal department for the Forum.
  • Commerce and Industry Minister heads from the Indian government side.
  • The CEO Forum, comprising of CEOs from leading Indian and US-based companies.
  • This time it is co-chaired by Mr. N. Chandrasekaran, Chairman of Tata Sons, and Mr. James Taiclet, President and Chief Executive Officer, of Lockheed Martin.

Significance of the Forum:

  • The Forum is a critical channel through which our two governments receive invaluable private sector input to sharpen our shared approach on issues at the heart of the U.S.-India commercial relationship.
  • It is an effective platform for dialogue across key sectoral themes, and to identify areas for closer collaboration for the mutual benefit of both economies.

Highlights of the CEO Forum:

  • The leads for each of the Forum's seven working groups shared their strategic outlook for their term of service.
    • This dialogue will serve as the framework under which specific recommendations will be charted out during the sixth edition of the India-US CEO Forum, due to be held early next year.
  • It focused on facilitating FDI, portfolio investment, capital market development, and financing of infrastructure, ICT, Energy, Water and Environment, Pharmaceuticals, etc.

U.S.-India Economic Relations:

Bilateral Trade with the US:

  • Bilateral trade between the US and India stood at USD 119.42 billion (2021-2022) as against USD 80.51 billion in 2020-21.
  • Exports to the US increased to USD 76.11 billion in 2021-22 from USD 51.62 billion in the previous fiscal year, while imports rose to USD 43.31 billion as compared to about USD 29 billion in 2020-21.
  • America is one of the few countries with which India has a trade surplus.
    • In 2021-22, India had a trade surplus of USD 32.8 billion with the US.

Factors that make the US the Largest Trading Partner of India:

  • India is emerging as a trusted trading partner and global firms are reducing their dependence on China for their supplies and are diversifying their business into other countries like India.
  • India has joined a US-led initiative to set up an Indo-Pacific Economic Framework (IPEF) and this move would help boost economic ties further.
  • The US has consistently been India’s largest market for services exports, but the recent overseas sales of merchandise goods to that country overtook China, making it the largest bilateral trading nation of India.
    • India’s total merchandise exports touched a record USD 418 billion in 2021-22, exceeding the Center’s target by about 5% and clocking a 40% growth over the previous year.

Associated Challenges of India-US Ties:

  • Tariff Imposition
  • Misunderstanding Self-Reliance as Protectionism
  • Exemption from the US Generalized System of Preferences
  • US’ Hostility towards Other Countries
  • US policy in Afghanistan

Other High-Level Dialogue Mechanisms

  • India-U.S. 2+2 Ministerial Dialogue: This is led by the heads of foreign and defense ministries of India and the U.S.
  • India-U.S. Commercial Dialogue: This is led by India and the U.S. Secretary of Commerce
  • India – U.S. Economic and Financial Partnership: This is led by the finance minister (FM) and the U.S. Secretary of the Treasury.
  • India-U.S. Trade Policy Forum: This is led by the Minister of Commerce and Industry (CIM) and the U.S. Trade Representative (USTR)
  • India-U.S. Strategic Energy Partnership: This is led by the Minister of Petroleum and Natural Gas and the U.S. Secretary of Energy.
  • India-U.S. Homeland Security Dialogue (HSD): The India-U.S. Homeland Security Dialogue is led by the Minister of Home Affairs and the Secretary of, the U.S. Department of Homeland Security.
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