Over the last 10 years, Indian cities have added 90 million residents. In the next 15 years, more than 250 million more will arrive. If this projection holds true, India's cities will house twice today's population of the United States. In response, Prime Minister Modi has laid out an ambitious vision for 100 Indian Smart Cities.
American companies want to contribute to this effort, which is why we are deploying all of the tools at our disposal. These include high-level trade missions, planning grants, and technical assistance to support India's nascent bond market. We are also featuring the contributions of Indian and American entrepreneurs by launching a private sector-led US-India Innovation Forum.
At the Forum, senior business leaders will reflect on the policy and regulatory conditions that encourage risk-taking.
Having been part of the Silicon Valley ecosystem, I know from experience that an enabling policy environment makes all of the difference for entrepreneurs. To that end, last week's passage of India's fist national bankruptcy law is a significant milestone. This important reform makes it more likely that India's banks can recoup their investments and therefore lend to promising Indian entrepreneurs.
The US also applauds the release of India's national intellectual property policy, which demonstrates the government's commitment to fostering innovation.
The US government continues to review the policy, but our preliminary assessment is that it includes positive aspects, including centralising the copyright and patent regimes under DIPP (Department of Industrial Policy & Promotion) and improving coordination between the Centre and states on compliance. We look forward to continuing our work together on this important issue.
To enhance its position in global supply chains and deepen its integration with the world economy, India will need to harmonise product standards with international rules. Standards barriers - such as certain testing, certification, and registration requirements - not only pose obstacles to US companies, but hamper the pace of India's integration into the global economy.
I am pleased there has been a noteworthy expansion in US-India cooperation in this area. For example, the Confederation of Indian Industry and the American National Standards Institute have created a portal to make information on US and Indian standards accessible to exporters in both countries.
Arguably our most important US-India Strategic and Commercial Dialogue, or S&CD work is focused on making it easier to do business with each other. The issue is fundamental to the future growth trajectory of our commercial relationship and, as the Prime Minister recognises, to India's overall economic future.
Many US companies are increasingly optimistic about the shift in tone, but are waiting to see further tangible progress in India's business climate. Even as some states have moved swiftly up the rankings, India still ranks lowest among the G-20 countries on the World Bank's 2016 Doing Business report.
We are working hard to change this equation. Both countries are focused on ways to enhance commercial law development, public procurement, and transparency, while making it simpler to trade across borders.Improvement in these areas and others can support the Prime Minister's Make in India agenda and help India grow a strong manufacturing economy.
We are also exploring areas of potential cooperation beyond our four existing work streams, including heightened engagement at the sub-national level.
India's states play a major role in defining the overall business climate and determining the trajectory of India's economic development. States are competing to attract leading global companies to invest locally, create jobs, and increase competitiveness and productivity. These efforts make a difference. According to Indian government statistics, states and Union Territories with the highest GDP (gross domestic product) growth rates overlap with those that have taken significant steps to establish a welcoming business climate. States like Gujarat, Maharashtra, and Karnataka grew at double-digit rates from 2013-2015, exceeding China's best recent years.
India's recent track record on economic reforms is impressive. In addition to the examples above, the government has streamlined bureaucratic decision-making; announced investment openings in railways, defence, medical devices, and e-commerce; established commercial courts; and taken an important step to grow its civil nuclear market by ratifying the CSC in line with international rules on liability.
American companies are responding. Last year, US companies invested more in Indian equities than in China. Over the last two years, US businesses invested over $15 billion in India, and will reportedly sign deals worth another $27 billion over the next two years.
However, despite this positive news, more progress is needed to employ the nearly one million people descending on India's cities every month. To do that, India needs to further accelerate inward investment, which in turn will require additional measures to increase bilateral trade.
India's national circumstances are rapidly changing. Not only has its economy transformed over the last 20 years, but it has occurred at the same time as tectonic shifts in the global trade architecture. In the last year alone, countries comprising 40 per cent of the world's GDP have signed on to the landmark Trans-Pacific Partnership.
The United States and the European Union are also making progress toward a similarly groundbreaking trade liberalisation agreement. President Obama believes that increased trade strengthens both America's and the overall global economy.
But the United States' openness to international trade reflects a more fundamental reality: The Asia-Pacific region and the rest of the world will continue on a path toward deeper economic integration.
The Indian government's decision to ratify the World Trade Organization's Trade Facilitation Agreement marked a significant step forward.
Nevertheless, high tariffs, localisation requirements, and other trade barriers and policies remain a significant challenge.
Overall, US goods exports to India face an average tax at the border of more than 13 per cent - that is over six times the US duties levied on Indian goods. Policies that level the playing field here will only increase India's competitiveness and spur innovation.
Edited excerpts from a speech by Arun M Kumar, US assistant secretary for global markets and director general for the US and Foreign Commercial Service, in New Delhi, on May 18