We have made good progress on tax. We appreciate what the prime minister and the finance minister have said about the end of retroactive taxation - it was an important message. We also have been able to resolve dozens of old tax cases with the finance ministry, and recently have entered into an advanced pricing agreement with the government, which allows for even greater certainty and predictability from a tax perspective for companies entering India. We hope this trend, including the resolution of pending cases, continues.
On the legislative front, we appreciate the steps taken to reform the bankruptcy code, which will help address not only the banking sector's concerns about non-performing assets, but also improve the business environment by allowing companies to dissolve a business in a timely and efficient manner when necessary. The passage of the Commercial Courts Bill was also an important step to help ensure that a focused judicial bench could help resolve commercial disputes more expeditiously. This is an important part of ensuring contracts can be enforced, and when disputes arise, that they be resolved in a timely and transparent way.
With regard to enhancing IPR protection, which is a necessity for attracting greater foreign investment, we welcomed India's recently released IPR policy as a step in the right direction towards nurturing a culture of innovation and entrepreneurship. India has always been an innovative society, with much to contribute in cutting-edge technologies and creative content. It is, after all, the society that pioneered mathematics, created yoga, and recently launched 20 satellites into space. We look forward to continuing to make progress on IPR issues through the Trade Policy Forum.
And of course, at the state level, the competitive federalism taking place across the country has generated healthy competition among state governments to attract investment, streamline regulations and create a more open, transparent and fair investment climate. US companies are studying closely where states rank and the steps being taken to improve the ease of doing business. There are some really important innovations taking place at the state level that could be replicated more broadly. I was in Telegana last week to help them roll out a specialised law enforcement unit to combat online piracy. This kind of innovation not only protects the intellectual property of the industry, artists and thousands of workers who support the industry, but it also helps attract new media, film and technology entrants into the state.
More work remains
For the years ahead, we have set a very ambitious goal of $500 billion in two-way trade and investment. Given the size of our respective economies, and the trajectories we are on, I'm confident we can get there. But we can do much more to accelerate the pace, to continue to liberalise markets and to improve investor confidence.
One area where I would like to see greater progress is in our ability to launch negotiations on a bilateral investment treaty (BIT). We have been on-again off-again for about eight years in our pursuit of a treaty. And I'm afraid things have become a bit more difficult. In India's recent model draft BIT, there were departures from the high standards that we had seen in other treaties India had negotiated, for example, with South Korea and Japan. The new model actually substantially narrows the scope of investments covered by the treaty and requires that disputes be exhausted in local Indian jurisdictions before alternative investor-state dispute mechanisms can be initiated. We will keep working to narrow our gaps, but today, unfortunately those gaps do prevent us from moving forward and putting in place the kind of structural protections that investors in both our countries have come to expect in international commerce.
As you know, the US is seeking to finalise and ratify our Trans- Pacific Partnership Agreement, and the hallmark of that agreement is dramatically lowering or eliminating tariffs, with higher worker and environmental standards as well. We are not alone in moving to this more liberalised trading model. I understand India is reviewing its trade posture and policies now. I also understand India must have a trade policy that addresses its unique history and developmental outlook. Similar debates are going on right now around the world. But I hope in the end, further integration into world trading markets and a lowering of tariff and non-tariff barriers is the path India chooses. That's the best way to support worthy initiatives like Make in India, Digital India, Clean India and so much more.
Moving forward
The opportunities and excitement here in India are apparent as are the challenges. Sixty per cent of the population is under the age of 30; by 2030 India will be the world's most populous nation, yet two-thirds of the India of 2030 is yet to be built. India will one day have the world's largest middle class and the largest number of college graduates. It is a democracy, yes, noisy at times, but built on a constitutional foundation, the rule of law, respect for pluralism, minority rights and the peaceful resolution of disputes. It's no surprise that the US is India's largest trading partner, that some 3.5 million Americans have their roots in India, and that our two leaders have just cemented the closeness of our relationship for years to come.
We will continue to need each other in the years ahead. I'm confident that the great gains we have made strategically can be replicated on the economic front as well. Again, I think we have just scratched the surface on what we can do together economically. There will be huge opportunities for our industries to collaborate in defence, in infrastructure development and clean energy, just to name a few exceptionally promising sectors. And, yes, the structural reforms will need to occur in order to move our trade and investment levels considerably higher. I know that deeper trade and investment ties between our countries will bind us together, encourage us to play by the same rules, and enable us to do more for the world together than we would accomplish otherwise.
Remarks by US Ambassador in New Delhi, Richard R Verma, on "Taking US-India Trade To The Next Level", at the Atlantic Council US-India Trade Initiative Workshop in New Delhi on June 27