Amidst trade and tariff tension between India and the US, the head of a business advocacy group has said that the fundamentals of the relationship are very strong and the sentiment about India among American companies are positive as it provides a huge market.
These are two economies and two cultures and two democracies whose value system is more aligned than anybody else, Mukesh Aghi, president of US India Strategic and Partnership Forum (USISPF), told PTI ahead of the next week's 2+2 dialogue.
External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman will hold talks with their American counterparts Mike Pompeo and James Mattis here next week as part of the maiden India-US 2+2 Dialogue.
"While we have this steel tariffs from the US side and then India announced its own tariff, our position is tariffs are not good for either consumer or for business. This is I say to the US and I say to India also. But if you take the noise away, the fundamental relationship between two countries and interest alignments are still very, very strong," said Aghi.
"India provides a tremendous market for US companies. Look at companies like Amazon, look at Uber, WhatsApp, Google, they all have been shut out of China. India has invited them with open arms," he said.
Walmart's investment to India is the biggest investment made by it anywhere.
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"So, I think the sentiment among the (US) business community on India still very positive. We are seeing more and more investment coming into India," he said noting that the challenge is job creation.
In the US, unemployment now is 3.8 per cent, which is almost full employment. Last year, Indian companies invested almost USD 18 billion into the US, Indian IT companies are hiring more and more in the US now.
"Things are moving in right direction," he said, noting that both countries are willing to sit down and find out where the differences are and how to sort it out.
Optimistic about the results of the next week's Indo-US 2+2 talks, Aghi said that the trade between the two countries is going up.
"It's not going down," he said. "Yes, there is noise, but I feel there's enough maturity in the relationship that it will survive the noise," he said.
Observing that GSP or Generalised System of Preferences is important to India and things like medical devices is important to the US, Aghi hoped that officials of the two countries will come to some kind of a solution.
"Both countries want to create jobs. It's complimentary. India has almost a thousand civilian aircraft on order; one of the fastest growing civil aviation market in the world. Only three per cent of the Indians use the airline travel. So the potential growth are tremendous," he said.
On the energy side, India is buying more and more crude and LNG from the US. "India will spend over USD 100 billion dollars buying energy and there's more supply coming from the US," he said.
But interests of the two countries are aligned. The total bilateral trade (goods and services) with India was USD 126 billion in 2017, up 10.4 per cent from USD 114.2 billion level in 2016. The trade witnessed an average 5.6 per cent annual growth rate for the previous five years.
Noting that US-India relationship is at its highest point currently with both economies witnessing positive growths in their bilateral trade engagement, USISPF in a latest report on bilateral trade said that the trade relationship appears to be pacing towards a relatively balanced trade trajectory.
A significant growth rate in US exports of goods and services, coupled with a relatively lower growth rate in imports, has resulted in a 4.2 per cent reduction in trade deficit (to USD 28.4 billion) from the 2016 level of approximately USD 29.7 billion, it said.
The USISPF estimates that by 2021, bilateral trade may cross USD 210 billion and the US trade deficit with India may drop to USD 12 billion if annual average export growth rate at 20 percent and annual average import growth rate at 10 percent are maintained, given huge impending deals in aerospace, and petroleum and gas between the two economies.