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Memo to Bryson: Go Big on U.S.-India Trade

Focusing on the high-tech agenda would instill a level of momentum in bilateral ties that has been noticeably missing since George W. Bush left the White House.

Memo to Bryson: Go Big on U.S.-India Trade

U.S. Secretary of Commerce John Bryson (The Hindu Business Line)

U.S. Commerce Secretary John Bryson is in India this week with a high-powered business delegation in tow. Chief among his objectives will be furthering American involvement in India’s $1-trillion infrastructure sector as well as deepening the level of Indian investment in the United States. Judged by the usual standards of such trade missions, the visit will likely be productive enough. Yet unless he elevates his sights, Bryson will nonetheless miss an opportunity to significantly advance the bilateral economic agenda.

Despite dramatic increases over the past decade, U.S.-India economic relations are far from achieving critical mass and will require purposeful nurturing to reach their full potential. Bilateral trade and investments flows remain a small fraction of the U.S.-China level, and China recently eclipsed the United States as India’s top trading partner. Overall, India is still only the 12th largest trading partner for the United States and it remains a comparatively minor destination for U.S. investment flows.

Still, the striking record of bilateral engagement in the innovation economy sectors offers an especially promising foundation on which to build for the future. The high-tech sector plays a critical – and largely complementary – role in the economies of both nations, and the United States has been a prominent factor in the spectacular development of the Indian IT sector. Yet overall bilateral trade in advanced technology products is surprisingly low and important synergies remain untapped.

Given this, Secretary Bryson should use his time in New Delhi to launch a bilateral effort aimed at further liberalizing trade and deepening engagement in the IT field or, even more one that covers the entire range of advanced technology products and services.

An arrangement with a limited but sharp focus on the innovation economy could likely be formulated relatively quickly, and its self-evident “win-win” features would override bureaucratic timidity and domestic political opposition.

In view of the vital role of the high-tech sector in the American and Indian economies, not to mention the broader world economy, such an initiative would pay robust commercial dividends. It would serve as a good down payment on the Obama administration’s pledge to double U.S. exports over the next five years, as well as India’s effort to double its own trade levels.

And it would instill a level of momentum in bilateral ties that has been noticeably missing since George W. Bush left the White House. Focusing on the high-tech agenda would be a very good way to stir imaginations in both countries. It would underscore the critical role that economic engagement has played in launching the new era in U.S.-India affairs. Indeed, increased private-sector ties will be one key in securing the growth of broad-based, resilient relations over the long term, since they work to limit the risk that momentary political and diplomatic frictions could escalate and disrupt the overall bilateral partnership.

 

Author

David J. Karl

David J. Karl is president of the Asia Strategy Initiative, an analysis and advisory firm that has a particular focus on South Asia. He serves on the board of counselors of Young Professionals in Foreign Policy and previously on the Executive Committee of the Southern California chapter of TiE (formerly The Indus Entrepreneurs), the world's largest not-for-profit organization dedicated to promoting entrepreneurship.

David previously served as director of studies at the Pacific Council on International Policy, in charge of the Council’s think tank focused on foreign policy issues of special resonance to the U.S West Coast, and was project director of the Bi-national Task Force on Enhancing India-U.S. Cooperation in the Global Innovation Economy that was jointly organized by the Pacific Council and the Federation of Indian Chambers & Industry. He received his doctorate in international relations at the University of Southern California, writing his dissertation on the India-Pakistan strategic rivalry, and took his masters degree in international relations from the Johns Hopkins University School of Advanced International Studies.