INDIA AND the US have several things in common, the prime similarity being vibrant and strong democracies, though there are several differences on the economic platform. It is for this reason, it is believed, that a real partnership can be forged between the two nations that will strengthen the bonds and make them grow, with the bigger advantage going for India, as there is more that we can gain in relative terms. This, in effect, is what author Nish Acharya expounds in his book titled The India-US Partnership.
Acharya has served as a consultant to several companies, as well as governments and has considerable experience in understanding the dynamics between countries. For this book, he has surveyed several thought leaders and elicited their views on how to build this partnership. His findings can be classified under three heads: philanthropy and CSR (corporate social responsibility); business and investment; and public policy and government-to-government relationship. His analysis from the survey may not sound too novel, but is practical enough to be pursued for better growth and development paradigm.
Let us look at the first pillar relating to philanthropy and CSR. He talks of how companies in both countries should contribute to the general good. Besides contributing the statutory 2% of profits for social welfare, it should stretch also to work for better urban planning. While such advice is idealistic, he misses the point that when countries are driven by free market capitalism, such solutions rarely accrue to society. Most of the good done in this process is more often than not an attempt to create the right impression in the minds of citizens or a part of their business model.
He also says there should be more NGOs with support from both governments. While this sounds good, of late the Indian experience relating to American NGOs has not been free from controversy and hence it is easier said than done. The xenophobia in India has to be replaced by a more open system where we look to absorb such flows. He also talks of how American philanthropy must underwrite American universities in India. This looks to be a challenge because even though there are a plethora of opportunities for US NGOs, India is still a difficult place to do business in. It will require a lot of political will to make this possible and hence the thrust must come from the government.
The way forward in business and investment looks more doable. Things like the US investing in start-ups in India, innovation, entrepreneurship, moving beyond IT, etc, are well said. But again, we should be looking at the World Bank ‘Doing Business Index’, which is what should be addressed by our policymakers. Today, it does not appear that there is a lack of interest, but definitely there are impediments from our side. While some of them may be justified given that the US also has restrictions on human capital flow from India, it is at the political level that these questions need to be answered.
The third pillar concerns public policy in the realm and of the two governments talking to one another. Some of the issues are fairly global in nature, like climate change, while others are more specific, like transfer of technology, transparency in dealings, shifting of USAID’s focus and so on.
There are two comments that can be made about this book. The first is that what has been suggested would hold for any other nation, especially in the developed world. Hence, what is good for India and the US can be good for India-Germany or India-China. The second is that some more value could have been added by evaluating the partnership in view of a possible change of guard in the US presidency. Even if there is no change, Donald Trump’s views certainly have a lot of backing in the country and the possibility of an India-US partnership could have been interpreted in this context too.
Madan Sabnavis is chief economist, CARE Ratings