Tuesday, February 7, 2023
HomeDiplomacyHopes of new economic alliances as Modi is set to hard-sell India...

Hopes of new economic alliances as Modi is set to hard-sell India to US investors

PM Modi will be meeting leading American firms Lockheed Martin, Google, Visa, Schlumberger and ExxonMobil, among others.

Text Size:

New Delhi: Prime Minister Narendra Modi’s much-awaited weeklong visit to the United States can prove to be a make or break scenario for the fraught bilateral trade relations between the two countries even as he is expected to hard-sell India to American investors.

On the seven-day trip, Modi will be holding two sizeable interactions with a plethora of top American business leader across all verticals.

In the first leg of his visit, the PM will be meeting American honchos from energy majors such as ExxonMobil, BP Plc., Schlumberger, Total S.A., Emerson Electric Company, Tellurian Inc. and Baker Hughes among others.

Sources told ThePrint that Modi is going to make a strong pitch on “India’s rising energy needs” and “the untapped potential the country offers in oil and gas”. He will be meeting them at a CEOs’ roundtable in Houston on 21 September — his very first engagement in the US.

According to Foreign Secretary Vijay Gokhale, energy is a “new component in the Indo-US trade mix” and India will be looking to increase the imports of oil and gas from the US from the present level of $4 billion.

“Energy firms are becoming increasingly enthused by some of India’s important reforms to the oil and gas regulatory regime, as well as commercial opportunities as India expands its energy partnerships. But the companies may raise key regulatory issues that, if removed, could increase investment in the energy sector,” said Rick Rossow, senior adviser and Wadhwani Chair in US-India Policy Studies at the Washington-based Center for Strategic and International Studies.

The next day, on 22 September, the Prime Minister will be holding the mega ‘Howdy, Modi!’ event at Houston where he will be joined by US President Donald Trump. The event is expected to be attended by 50,000 people and it is touted to be the biggest gathering ever even in American standards.

Modi had addressed similar gatherings of the Indian American community in Madison Square Garden, New York, in 2014 and in San Jose, California, in 2015.

Also read: Jaishankar says US-India trade will reach ‘higher level’, hints at likely deal

Modi visit to New York

The PM will be reaching New York on 22 September. He will deliver the keynote address at the Bloomberg Global Business Forum there on 25 September, which will be followed by an investment roundtable organised by the Indian government along with ‘Invest India’.

Over 40 American conglomerates are set to be present at the roundtable. Some of the confirmed attendees are Lockheed Martin, Coca Cola, PepsiCo, Visa, American Tower Corporation, Google, Amazon, Walmart, Qualcomm, Warburg Pincus, Kohlberg Kravis Roberts & Co, Cisco and others.

Here again, the PM will be seeking some big-tickets investments from American corporations by showcasing the ‘ease of doing business in India’, sources said.

“The objective of this (meeting) is to get feedback from industry about their business plans in India and to demonstrate government’s business-friendly approach in attracting investment into India,” Gokhale said.

Trade package likely to be unveiled in New York

Apart from high-level business engagements, the actual component of Modi’s visit is going to be on trade and how the rising tensions around it have to be ironed out.

Sources said a so-called trade package is expected to be announced when Modi holds a bilateral meeting with President Trump, which is expected to take place on 23 September or 24 September, depending on Trump’s schedule.

While India is geared up to offer more market access to American goods, it is likely that President Trump will give a green signal to the reinstatement of trade benefits, under the Generalised System of Preferences (GSP) programme, that will benefit Indian shipments worth $6 billion to the US.

“With limited progress on a potential US-China trade agreement, having a comprehensive trade deal with India will definitely be a big victory for President Trump at this point of time,” said Mukesh Aghi, president and CEO of US-India Strategic Partnership Forum. “Both leaders are meeting twice during PM Modi’s trip, so there is a likelihood of a trade deal.”

Aghi also said there could be some positive movement on GSP as “President Trump now realises the fact that revoking GSP on Indian goods is hurting US industries”.

The Trump administration had revoked it in May, which made New Delhi retaliate by raising duties on 28 American goods the following month.

“The US might grant a waiver to India on the 232 tariffs as well. This will all be part of the larger trade resolution that both sides are looking at, with an eye towards long-term opportunities,” Aghi added.

In March 2018, the US had imposed an additional tariff of 25 per cent and 10 per cent on import of steel and aluminium products respectively from a number of countries, including India. America said it was done under Section 232 of the US Trade Expansion Act of 1962 on national security grounds.

According to Rossow, it is going to be a “modest” trade package at best that will offer a “pause on trade tensions for a short period”.

He also said while India will offer a package that might please the US, it will be difficult for Trump also to offer some of the concessions under it in terms of restoring GSP, waiver on 232 tariffs, stalling some of the visa restrictions and holding back on contemplated trade actions.

“I doubt India will want to put a one-sided deal on the table, so the United States will likely have to make concessions, too. I believe the U.S. will have a more difficult time than India, politically, making such moves, but attempting to push a one-sided deal where India makes all the concessions could be quite damaging, long-term,” Rossow said.

Also read: US-India trade deal has to be mutually balanced, address concerns of both nations: Gokhale


Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism

Most Popular