US-India trade punches over commerce

Two-way trade between India and US is expected to cross $100 billion sometime this year.

The author has posted comments on this articleChidanand Rajghatta, TNN | Jun 11, 2012, 09.19AM IST
WASHINGTON: Robert Blackwill, a former US ambassador to New Delhi, famously scoffed that US-India trade was "flat as a chapatti" when he first came to the subcontinent. By the time Tim Roemer, Blackwill's successor once-removed, demitted office last June, he might well have thought it had puffed up like a poori, rising some 32 per cent during his time there.

But inside the golden hue of the fried Indian bread, there is still a lot of hot air and unfulfilled promise. Two-way trade between the two countries is expected to cross $ 100 billion sometime this year, a landmark, but a mere one-fifth of the $ 500 million US and China rack up. Roemer, now a "strategic advisor" to the consultancy firm APCO Worldwide, sounds exasperated as he talks of the roadblocks and mishaps that have stunted it (and which were attributed for his exit from New Delhi; he denies it, saying it was family obligations and personal calling caused him to leave India, not the fact that the US lost the bid for multi-role combat aircraft.)

Still, he does not hold back from reeling off the "growing obstacles and difficulties in trade that is causing rising frustration" in Washington: Principal among them, the nuclear liability law that may end up freezing out US companies even though the Bush administration rescued India from a nuclear pariah status, and the gridlock in opening up foreign investment in multi-brand retail.

"There needs to be a political reckoning on several of these issues. These are all priorities that would be helpful not just to the US businesses but also helpful to Indian people," Roemer said in an interview his office initiated last weekend on the eve of the 3rd US-India Strategic Dialogue. "Why aren't the (Indian) political parties saying 30 per cent of food is not moving from the field to Indian dining table? That narrative is just not there."

He should know the answer to that one, being a six-term Congressman from Indiana who President Obama picked to send to New Delhi in 2009. Indian legislators respond to constituent concerns the same way American lawmakers do to theirs, say on an issue like outsourcing. Still, Roemer feels the Indian political system has come up short: they need to make hard choices, like opting for the grain revolution of the 1960s that was initially controversial but was later embraced.

Geo-strategic parleys aside, that will be the hard message secretary of state Hillary Clinton will convey to her counterpart SM Krishna when they meet for the 3rd Strategic Dailogue this week. Now in her final months at Foggy Bottom, Clinton has expended much energy on getting India to respond to US overtures and propositions on the both the strategic and business front, including a last-ditch stop in Kolkota to woo Mamata Banerjee. That effort was followed up by defense secretary Leon Panetta courting India on the Pacific front.

But there is an unmistakable sense of ennui as both countries go into an election mode over the next few months (the joke in Washington though is both sides are on a perpetual election cycle). Roemer understands that and concedes that "sometimes elections tend to promote periods of frozen relationship and lack of progress."

However, he says with a sense of urgency, given the struggle that Europe is going through and the worldwide economic slowdown, US and India have a "historic opportunity to concentrate not just to build a bridge between the two countries, but also help the poor and middle class people in both countries to benefit from trade." To this end, he wants both countries to commit to a bilateral investment treaty leading to a free trade agreement.

Easier said than done; even the Iran issue has been an easier fix than bilateral commerce. After all, not all of Roemer's Midwestern charm nor the exertions of every US official going up the President persuaded New Delhi to award the $10 billion MMRCA contract, a rebuff the former envoy says is not an issue now. Broader trade is an even more amorphous idea; it's hard for people to get their head around it. New Delhi too has its share of trade gripes: from visa issues for its professionals and business community to barriers to agricultural sales, including the much ballyhooed export of mangoes.

Underlying many of the issues is lack of grassroots push despite the much-touted people-to-people ties. There isn't enough. "Okay, you've convinced me. Now go out there and bring pressure on me," President Franklin Roosevelt once remarked to have told a lobbying delegation. That's tougher than signing merely signing a MoU. MoUs don't roar; people do.

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