A common ground on trade

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Trade experts say that high-level meetings between U.S. and Indian leaders will provide the best chance of thawing the icy relationship that has developed in recent years between the longtime allies.

With President Obama and Indian Prime Minister Narendra Modi set to meet in Washington this week, business groups say there are plenty of signs that the talks will reinvigorate the wobbly alliance offset by unfair trade policies.

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Patrick Kilbride, executive director of international intellectual property at the U.S. Chamber of Commerce’s Global Intellectual Property Center, said the meetings are an important step toward reevaluating where the nations stand and how best to proceed.

“It’s realistic to expect a substantive conversation, and it’s critical that there’s a signal of change of direction for India,” Kilbride said.

“We’re looking for first steps right now and a dialogue to get into more complicated issues.”

Business groups are cautiously optimistic that the leaders will make inroads on a wide array of challenging issues as Modi and his government craft plans to jump-start the Indian economy.

Chris Moore, senior director for international business policy at the National Association of Manufacturers, said there needs to be a strong commitment aimed at reversing a slew of damaging Indian polices put into place during the past several years.

“Turning around a troubled and underperforming bilateral trade and investment relationship must be at the top of the agenda,” Moore said.

“Manufacturers are hearing positive things from the prime minister and his team, but concrete progress and real results on trade facilitation, tariffs and discriminatory industrial policies are essential,” he added.

Trade experts have complained that forced domestic-content requirements, rising tariffs and weak intellectual property rights enforcement are several of the major issues holding back U.S. businesses from investing in the nation of more than 1.2 billion people.

Still, business groups said they are trying to remain patient as the new government settles into place.

“As critical as we’ve been of Indian policy in the past, the officials in office today are not the originators or the executors,” Kilbride said. “They are inheriting the issues, and it’s a case of starting fresh and looking at where we go from here.”

While there are some early concerns about the direction of Modi’s policies, the Indian government has signaled it will review its intellectual property policies.

“Decisive action in these areas and others can demonstrate to the world that Modi’s India is open for business, not business as usual,” Moore said.

The trade groups had expressed disappointment that India refused to sign off in August on a trade facilitation agreement that would reduce red tape and set up a global framework to move goods more efficiently across borders.

Sadanand Dhume, a fellow at the American Enterprise Institute, said that India now realizes its mistake and is seeking an avenue to accept the deal.

“India doesn’t want to continue to be seen as a deal-breaker on a deal with wide global acceptance,” Dhume said.

That stance is expected to be central to Modi’s new approach to boost India’s economic growth.

Diane Farrell, acting president U.S.-India Business Council, called the visit “very significant” and an opportunity to address the relationship’s challenges.
“There’s no substitute for a face-to-face meeting when you’re dealing with challenging issues,” Farrell said.

To that end, several experts noted that talks have become more frequent since Modi’s decisive victory.

Since May, top U.S. officials have streamed in and out of New Delhi, including Secretary of State John Kerry, Commerce Secretary Penny Pritzker and Wendy Cutler, a deputy U.S. trade representative.

“This meeting between Modi and Obama is the political culmination of those discussions,” Kilbride said.

Although it’s certainly not expected that all problems will be solved during this visit, the meeting provides a chance for both sides to affirm that they will seek ways to reduce the strain on the relationship.

“It is unlikely he will deliver on every single issue, but I do think that Modi will have a fundamentally different outlook on economy, business and foreign investment,” Dhume said.

Dhume said Modi, who is courting foreign businesses, will look closely at policies that will reassure foreign investors that his country is a safe place to do business.

“I get the sense he takes these issues seriously,” he said. But he noted that Modi is in the first months of what could be an arduous five-year term.