Re-energizing U.S.-India Trade Relations with a Flair

Red carpets, camera flashes, statement-making fashion…no, I’m not talking about the upcoming Oscars, but rather President Obama’s recent visit to India. Surrounded in pageantry, the meetings between the President and Prime Minister Modi signified the deepening U.S.-India relations (and also confirmed Modi as the most fashionable head of state – his navy designer suit was embroidered with pin stripes spelling out his name over and over!).

President Obama’s visit marked the first time a U.S. President has visited India twice and the first time a U.S. President has been invited as the guest of honor for India’s Republic Day celebrations. Obama and Modi have hit it off so well in fact that the media has dubbed their relationship a bromance!

But this visit wasn’t the first sign that the U.S.-India relationship is warming up. Over the past four months, both Secretary of State Kerry and U.S. Trade Representative Froman visited India to discuss trade relations, the U.S. and India held the first Trade Policy Forum in four years, and Prime Minister Modi made a trip to Washington, D.C. The Obama Administration has even announced a goal of increasing trade between the U.S. and India from $100 billion to $500 billion annually over the next few years, and the possibility of a Bilateral Investment Treaty (BIT) has been rekindled. President Obama clearly sees India as a strategic partner in South Asia and essential in his pivot to Asia, while PM Modi, who was elected last year with a landslide victory, has big plans to grow India’s economy and attract foreign investment.

This is all good news for Washington state, which counts India as one of our fastest-growing trade partners – in 2013 we exported a record $2.3 billion worth of goods to India, an increase of 75% over the year before. While India offers tremendous opportunity with a population of 1.2 billion and a rapidly growing middle class, there are many barriers that prevent our trade ties with India from being as strong as they could be. From high tariffs and bewildering bureaucracy to local manufacturing requirements and caps on investment, India has historically not set up a welcoming business environment for foreign companies. With the Obama Administration’s intense focus building trade relations with India and Prime Minister Modi’s aim to improve the business climate, hopefully we’ll see some positive changes on the trade front.

While clearly U.S.-India relations are stepping in the right direction, the meetings so far seem to have been filled with a lot of symbolism (and style!) and not as much substance. The Obama Administration described his meetings with Modi as setting the stage for future cooperation, but had little to say about concrete trade outcomes. Likewise, the recent Trade Policy Forum, which provides a bilateral forum for discussion of U.S-India trade issues, resulted in only pledges to discuss trade issues in the future. Ambassador Froman stated that the TPF meetings “resulted in substantive work plans for regularized engagement” on a broad range of issues, including agriculture, services, manufacturing and intellectual property rights (IPR). With member of Congress urging USTR to address IPR issues in India and a new High Level Working Group formed on IP, IPR will be a particular focus of discussion between the two countries.

So while there haven’t been many specific trade successes to point to yet, the long-overdue dialogue on these critical issues opens the doors wide for progress in 2015. While tough conversations will lie ahead, U.S.-India relations look brighter than they have in a long time. And as a bonus, we’ll get to see some more of fashion-icon Modi’s bold sartorial choices!

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