The Path to Economic Growth in India: Welcome New Business and Innovation

By: Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers (NAM)


U.S. Trade Representative Michael Froman and Indian Commerce and Industry Minister Nirmala Sitharaman meet today for the U.S.-India Trade Policy Forum in Washington, DC, to examine and move forward our bilateral trade and investment relationship. There are many issues on the agenda, and manufacturers urge that today’s discussions lead to concrete reforms in ways that will grow commercial opportunities and lead to stronger respect for international standards.


The Trade Policy Forum, which was reinstated last year after a four-year hiatus, follows a series of other high-level meetings focused on improving the U.S.-India commercial and economic relationship to the benefit of both nations. As India seeks to increase its global competitiveness, U.S. industries recognize and welcome increased dialogue between our governments on policies and rules to eliminate discriminatory barriers to trade and investment, and to improve protections for innovation and property. Yet, talk alone will not improve the U.S.-India commercial relationship or grow trade opportunities between our countries. Rather we need to see concrete action to address the many ongoing and growing challenges that manufacturers in the U.S. face in India.


Since his election over a year and half ago, Prime Minister Narendra Modi has stated his goal to boost India’s economic growth and jobs by opening India to business and growing its participation in the global economy.  But change has been slow in most areas as documented by two recent reports:


  • This week, the World Bank’s Ease of Doing Business index ranked India’s economy 130 out of 189 on measures focused on the start-up and expansion of business activity in India While India moved up four spots in the index and has an average slightly above the South Asian region, its ranking continues to remains below every other member of the G-20. While the Indian government is seeking to improve India’s business environment, more concrete action is still required on issues such as India’s barriers to imports and foreign products and investment, its overall lack of transparency in business regulation and other areas.


  • The U.S. International Trade Commission (ITC) reviewed recent changes in India in its September 2015 report, Trade and Investment Policies in India, 2014-2015. That report identified many continuing tariff, border, localization standards as well as regulatory and intellectual property barriers that impede the U.S.-Indian commercial relationship.


The NAM has identified many of these and other concerns in its submission being made to USTR today on trade barriers.


Manufacturers agree that dialogue is a prerequisite to progress, but dialogue alone does not change the situation on the ground in India. We look forward to India working closely with the U.S. to eliminate discriminatory barriers, open its market, adopt international standards on everything from food reviews to telecommunications testing, and provide strong protections for all forms of intellectual property from trade secrets to patents and the test data that many manufacturers develop to create new products. If India wants to encourage investment, grow its economy and truly be open for business, these are just some of the concrete steps it needs to take sooner rather than later.