Public split at US India Business Council to have limited impact on trade

Despite a public power struggle in the USIBC, the Indian side remains in touch with the council, as the split is expected to have limited impact on trade. 

A rather public split of the US India Business Council – which drives policy initiatives and industry partnerships between the two countries – from the US Chamber of Commerce will have limited impact on trade. Although it could lead to a protracted legal battle for funds and trademark, it would not adversely affect its operations.

The USIBC Board, which includes Anand Mahindra, Executive Chairman at the Mahindra Group, and Pepsi’s Indra K. Nooyi as prominent members, announced on Monday that it has decided to formally separate from the US Chamber of Commerce, the largest lobbying group in Washington over differences in the relationship.

Given the powerful composition of the board that decided on the split, the decision is likely to find favour within the Indian government which is an important stakeholder. The US Chamber of Commerce, on the other hand, may not find strong support from Washington, given its critical stand on Donald Trump through his Presidential campaign.

A letter sent out to all members by nine board members, including Nooyi, said that the decision to separate was taken due to “recent actions by the U.S. Chamber” and the new structure will enable it “to better focus on helping achieve our goals of driving economic growth, job creation, innovation, inclusion and entrepreneurship”.

However, the letter evoked a strong reaction from the US Chamber, which on Wednesday sent out a counter note to all members, saying that there is no legal provision for such a separation, and that any board member who wants to separate can leave the body.

“Members of the USIBC board have no ability to “transition” the USIBC to “a fully separate status”.  The USIBC is a part of the Chamber, and the Chamber does not plan to transition it anywhere.  The USIBC has no separate existence and its board has no legal authority,” the letter sent out by US Chamber President Thomas J. Donohue reads.

While the strong letters from both sides have led to a state of confusion over the future of the USIBC, sources said that the Indian side is watching developments closely and would continue to function with the current board that has decided to separate.

“Interactions with the Indian side are being driven by the board that has some very prominent members. These interactions and engagements will continue regardless,” a source aware of the developments said.

The US Chamber of Commerce is expected to a take a strong line on the separation announced by the board, with Donohue stating that it will not allow a “group of disaffected individuals” to impact the USIBC, the US Chambers has said that it will reconvene the board with directors “who are supportive of our approach”.

Khush Choksy, a Senior Vice President at the Chamber, who has a long personal and professional background in India, has been named by the US Chambers as the interim president of the USIBC.

The USIBC board, on the other hand, has named Mukesh Aghi as the president in its letter to stakeholders, and has said that “members of the USIBC Board stand ready to support our Members and the Government of India on any and all upcoming initiatives”.

 

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