President Obama?s upcoming visit can be used to take Indo-US economic ties to a higher trajectory. Given that Indo-US bilateral trade has lagged behind growth in overall trade of the two economies, both sides need to change the existing approach that tends to be predominantly mercantile and short term, implying strict reciprocity and an attempt to balance trade, even in the short-term. Starting in the 1980s, the US and China had visibly adopted a very different long-term and strategic approach, which was more conducive to building a closer relationship and taking their economic interaction to a qualitatively higher level. A similar approach is perhaps needed from both sides to try and take Indo-US economic cooperation to a level warranted by the revealed potential.

India can play the gracious host in taking the initiative in attempting a higher trajectory for Indo-US economic ties. We can be sure that the gesture will not be lost on the visiting President, who surely needs a good India visit after a bruising mid-term election. But more importantly, such an Indian initiative will have positive longer-term implications, as it would signal, to the US, our willingness to be its partner on issues in global financial and economic governance. It would also convey our appreciations for the US to have taken the extra steps in facilitating our entry into the nuclear club and setting our nuclear power generation programme in motion. Our partnership with the US, which is not to be mistaken as becoming a camp follower, will give us the necessary window and strategic space to focus on achieving economic prosperity. As Ambassador Santosh Kumar and I have argued in our forthcoming volume, In the National Interest: A Strategic Foreign Policy for India that summarises the output from a two-year-long research project supported by the ministry of external affairs, achieving economic prosperity is not only the highest national priority for us at this stage but indeed a critical condition for safeguarding our security.

The three steps India could take will be to first announce liberalisation for the entry of FDI in the multi-brand retail sector. This step, long overdue, will actually help modernise Indian agriculture and bring higher returns to the beleaguered Indian farmers, and lower food prices for consumers. It will also result in greater investment in agriculture related logistics, warehousing, post-harvest technologies and minimisation of waste. So we will, in effect, do ourselves a favour, while ostensibly extending a concession to US retail chains. Similarly, we should hike the FDI ceiling in the life and general insurance sectors to 76%, as this will permit consolidation, expansion of insurance coverage to lower income groups and to the rural sector. Second, we should identify the constraints in achieving greater cooperation between Indian and American firms, research institutions and extension agencies in all aspects of agriculture. Indian agriculture needs modernisation to raise yields, productivity, post-harvest value addition and minimise waste. Let us accept that domestic capacity for generating the needed research and diffusing it to farmers, to put it mildly, seriously falls short of requirements. More importantly, a successful Indo-US collaboration in agriculture will allow us to transfer the valuable experience to Africa, which needs a breakthrough in agriculture as much as if not more than us. Making agriculture modernisation the basis for initially bilateral and subsequently trilateral cooperation that is focused on Africa will have multidimensional benefits not only for Africa but also for the US and India.

The US economy desperately needs more employment generation. As brought out in a recent Ficci publication, Indian firms are already investing in new capacities in the US that generate precious fresh employment. But we can extend a very strong helping hand by finalising the deal for the multi-role fighter aircraft with the US. This has been hanging fire for an inordinately long time, causing understandable distress in the domestic security establishment. It is not a make-or-buy decision either because our domestic capabilities are unfortunately not up there yet, therefore no domestic industrial interests or swadeshi sentiments are at stake. Taking cognisance of our security and longer-term strategic interests, we need to cast aside our reticence and reservations and grasp the nettle. This will bring great cheer to US industry and strengthen the President?s hands in going forward with a more a liberal trade agenda, which is at present firmly on the back burner in the US. Let neither the ghost of Bofors nor the fear of sullying the image of unimpeachable integrity delay this decision any longer. The deal must include building indigenous strategic production capacities as we cannot seriously aspire to be a global power and continue to import more than 60% of our defence equipment.

On the US side, while in Delhi, the President could announce the US?s support for an integrated South Asian economic space extending from Kabul to Dhaka and acknowledge his appreciation of India?s role by allowing asymmetric access to its markets for imports from less developed neighbouring economies. He should ask Pakistan to give up its inexcusable breach of WTO conditions and start trading trade with India on a most favoured nation basis, rather than on the basis of a positive list as at present. This is the major stumbling block in making Saarc a dynamic regional grouping. Secondly, the US must now recognise Indian industry?s critical need to have access to frontline technologies across the entire range of industrial and manufacturing processes as it seeks to achieve global competitiveness. This calls for the dismantling of the technology denial regime that currently imposes significant restrictions on access to a range of technologies from the US. These measures will signal to the rest of the world that the US and India are on a convergent path that will make our bilateral ties as one of the key relationships of the present century.

The author is director general of Ficci. These are his personal views