Even as the Doha Round of trade talks makes snail?s progress, India and the US are pushing ahead with a bilateral agreement on investment. Commerce minister Anand Sharma and the US trade representative Ron Kirk met in Washington on Wednesday and decided to speed up the technical negotiations in this regard. The next ministerial level meeting will be held in India in October.
?We agreed to re-invigorate the Trade Policy Forum (TPF) and make it more robust and effective in resolving bilateral commercial issues, while maintaining the political leadership of the process,? Sharma told reporters in Washington after the meeting.
A USTR statement termed the TPF the premier dialogue for addressing trade and investment issues between the two countries, adding it should be strengthened to better facilitate resolution of outstanding issues of concern.
?The booming bilateral trade and investment flows between the United States and India support tens of thousands of critical jobs in both countries and we know that will only grow significantly in the coming years,? Kirk said.
In 2010, India ranked 12th among US trading partner, with bilateral trade of $48.8 billion, according to the US census bureau. That pales in comparison to the $456 billion in US bilateral trade with China, its No 2 partner after Canada. Through April this year, India ranked 13th on the US trade partner list, just behind oil exporter Venezuela.
Describing his meeting with Kirk as productive, Sharma said the talks covered the entire range of issues in bilateral trade and commercial engagement. Sharma apprised Mr. Kirk of various policy approaches being taken by India to sustain its high GDP growth and the opportunities it offered for US businesses to develop partnerships with the Indian private sector.
The minister said the US welcomed India?s moves to reduce tariffs on a number of products, including raw pistachios, cranberry products, seedless raisins, processed foods, medical equipment, fertilisers, chemicals and heavy machinery.
According to the USTR, the two leaders recognised the challenges that remain in the ongoing discussions with regard to the Doha Round, but expressed their commitment to exploring options for productive next steps.
Meanwhile, a US treasury official told Reuters that next week?s talks between finance minister Pranab Mukherjee and US treasury secretary Timothy Geithner will dwell on ways to open India?s ?relatively closed? capital markets and banking sector to foreign investment. ?It?s an issue for India as it seeks to maximise its growth potential. It?s clearly important for India to develop long-term capital markets to provide adequate financing for infrastructure, which is a major constraint to India?s growth,? the official said. US wants India to open some of its key sectors to foreign investment. The talks would also touch upon infrastructure development, capital markets reforms, cooperation on the Group of 20 efforts to reduce trade imbalances, and efforts to combat money laundering, the official said.
The official said closer economic cooperation and greater market access would help make India one of the top 10 US trading partners.
The treasury official noted that US firms? direct investment in India has come down slightly in the past couple of years, which he attributed to uncertainty in the regulatory and operating environment. Greater transparency and exchange of information so that businesses can better anticipate their returns on their investment would help, he said.