Nisha Biswal, President of the US-India Business Council, talks about the US-India Trade Policy Forum (TPF) next week, CAATSA restrictions, the business priorities of the Biden administration and more. Edited excerpts from an interview:
Should we expect much progress when Commerce Minister Piyush Goyal meets Catherine Tai, US Trade Representative (USTR) for TPF, in terms of resolving persistent issues in digital trade, agriculture, medical devices, GSP, etc.?
My own expectation, based on talks with both governments, is that this is really a more fundamental meeting – the first meeting between Ambassador Tai and Minister Goyal, It is really about trying to re-establish some of the institutional and fundamental processes like the Trade Policy Forum. And, therefore, I am not expecting the major results to be announced.
But I think this is an opportunity for both governments to align expectations, align perspectives, and perhaps create a roadmap for where they want to go. So, could they, in the process of doing that, try to push some of the key results — I think we’d welcome that. We think there are some things that are ready to be resolved that both governments and both countries have put a fair amount of time and effort into trying to solve. And I think some of those things should try to be done.
It seems that the US is not keen on negotiating an important trade deal with India at this point of time and wants to resolve the small pending issues first. Should we see this as part of a general approach of the Biden administration to fix current issues before embarking on more ambitious deals, such as it has done with Europe and the plane dispute?
Well, of course the Biden administration has made it abundantly clear that it’s not focused on negotiating trade deals right now, but on trying and focusing on domestic competition and the domestic economy. . I think it is a mistake to think of domestic competitiveness and the US economy as alienating or in isolation from trade deals with our closest trading partners. I think the two go hand in hand, especially since most, or a very significant portion of, American jobs are export-related jobs.
That said, I don’t know whether the US-India trade talks to date have set themselves up to quickly start talks about FTAs. I think there is interest and opening up on the Indian side in going down that path for the FTA in ways that we probably haven’t seen before. And I think the Biden administration should bow down as it looks at that opening.
What will be the impact on bilateral trade of any CAATSA sanctions by Washington on New Delhi to take delivery of the S-400?
Well, first of all, I do not believe and certainly do not think that sanctions should apply to India. We at the US-India Business Council in the US Chamber are very clear, that we believe the sanctions against one of our closest partners and most important partners are unfair and counterproductive and there are certainly legitimate concerns around its implementation S 400 In terms of the impact on US technology and interoperability between the US and India. Those are things that both governments need to reconcile, but nowhere in that equation do sanctions advance the interests of either country and partnership.
That said, I think there is so much at stake for both countries that whatever comes out, whether it is on CAATSA Either front or another, the two countries have a compelling strategic interest in working through any areas of divergence, as areas of convergence are of great importance to both governments.
So, in a hypothetical scenario where there are restrictions, do you see business being affected?
Inevitably, it will affect many different areas. I do not know that getting into imaginary things is fruitful. I think it’s hard to know. Clearly, an application of sanctions would frustrate and even anger many on the Indian side and with what consequences? I do not know. I don’t think we should take this chance.
Should we expect labor and environmental standards to be put on the table by the US when it is finally ready to discuss a major trade deal with India?
Well, it’s certainly important to the Biden administration and historically it has been important to the Democratic Party to ensure that there is a proper discussion and handling of labor standards and the environment. And clearly, on environmental factors, this has become even more imperative in the current situation of climate change and climate crisis.
Labor and the environment don’t need to be a problem because I think the Indian government has strong views on climate challenges as well, and I think these may be areas where the two can really find some common ground and Some areas for cooperation.
In the context of the Generalized System of Preferences (GSP), it is now on the table, given that it is no longer just a question of the Biden administration accepting India back into the programme, but first of when the US Congress will back the programme. Will authorize again. ,
I think it should be laid on the table and I think the GSP program is a very important programme. Certainly, we in the US Chamber are urging Congress to reinstate that program. And we think that a restored GSP program should include India as one of the major partner countries and beneficiaries. I think it is a win-win for America and India.
Given that the GSP is to be reauthorized by Congress, what are some areas where do you think the Biden administration can move forward that would be in India’s best interest?
Well, I think there are many areas where the US and India need to work together. Certainly, the digital economy is one that is important for both the countries. And being able to support growth in that area should be a priority for both governments to make some sort of agreements that shape that digital ecosystem, so that we don’t have fragmentation, [and] We don’t have rules that are conflicting and that make it difficult for US and Indian companies to be able to start a digital business and grow a digital marketplace.
In the field of life sciences, we have seen that pharmaceutical supply chains are extremely important. India is playing a very important role in supporting the global vaccination supply in the COVID-19 pandemic. It underscores the priority and importance between the US and India in trying to solve some of the challenges. To see more American investment in the life sciences and more American manufacturing in India, I think, will advance the goals and objectives of both countries and industries…
India wants to see how it can attract more supply chains and a lot of this is related to market access. And there are areas where India is seeking greater market access in the United States and so there is room for both countries to really think about what are the key areas they want to align on.
US COVID-19 vaccines are not yet available in India due to lengthy discussions between vaccine manufacturers and the Indian government. Can you tell us a little bit about when we can expect these talks to settle down?
I have no idea when. For several weeks – and even months – we have been hearing that this is imminent and I know that there are issues that need to be resolved, especially the questions of compensation for those who need emergency access. are subject.
Now that some vaccines have moved away from emergency use and become fully authorized [use], it can replace the calculus.
But look, I think the question is less important because India is still ahead on its vaccination targets. Certainly, the Indian people will benefit from greater availability of more vaccines and accelerating vaccination targets. But I think the big focus of vaccine manufacturers at this point is on partnering with India in production to push global supply.
In 2019, you said in the context of US-China trade tensions that India would need to make a bigger play for companies leaving China as they were moving to Vietnam, Cambodia and other countries. And you said that complacency is something to avoid. What is your assessment of the situation two years ago and now in this new context? What does India need to do to attract these supply chains?
I think the issues are still very similar. I would like to appreciate the Government of India for taking some important steps including PLI [Production Linked Incentive] Schemes that are meant to encourage and attract investment in the manufacturing sector in key sectors. And I think they’re all very helpful and I see companies that are starting to take advantage of them. I think further liberalization for FDI in some sectors is also another very positive sign. A policy that repeals retrospective tax liability, I presume, [is] Another big step.
Companies are looking to reduce risk, diversify and regionalize their supply chains to be closer to the market, rather than keeping them in one place. That said, shifting the supply chain is a huge expense. This is also a long process. You’re not going to move an entire supply chain ecosystem. This is going to come in phases and, therefore, requires a more flexible environment in terms of local material requirements and as such, as not all the materials required for most of these supply chains are locally available.
So, I think you have to address market access because for the supply chain to move, it has to have a market that’s going to support it. You must have regulatory transparency and stability, as this is a high capex move to shift supply chains. You need to be able to get some consistency over that time period that is needed to move that supply chain and essentially get the ROI. [return on investment] on that. So, I think a more holistic view on policies in India – policy coherence – is one that is stable and consistent with how it is treating these new investments.
(with inputs from Suhasini Haider)
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