US President Barack Obama is expected to downplay concerns on outsourcing during his India visit instead focusing on the larger story of getting more access to the Indian market.
The US is keen to tap into the financial sector, in both insurance and banking where there are stiff sectoral caps for foreign investment. The other sectoral caps are in retail and in defence production. At a press briefing at the White House on Thursday, Mike Froman, deputy national security advisor for international economic affairs said the US government will push for ?a level-playing field? where there is an open market for US companies.
There?s a large potential market there..the President and the administration are active in promoting exports to ensure that there?s level playing field there, there?s open markets (USA) have an opportunity to penetrate that market and support jobs back here.?
Obama?s three day India visit from September 6 to 8, will be dominated by the economic agenda, his aides said.
Froman?s comments came as a response to questions on whether Obama will flag the outsourcing issue in his talks with Prime Minister Manmohan Singh. The Obama administration plans to cut back tax breaks for US based companies that use India and other non-US locations to do back office jobs, in favour of those located in the US.
Froman said in the run up to the visit tare ?a number of large contracts? between American and Indian companies, and ?we hope to consummate some of these deals?. US exports to India have quadrupled over the last seven years to $17 billion while export of services have tripled to $10 billion a year. Indian companies are now the second-fastest group of investors in the US, just after the United Arab Emirates.
According to administration officials, key aspects to be flagged in the visit will be ways to further promote US exports, increase trade financing and advocacy on behalf of US firms. These will help the creation of jobs back in the USA, they said.
Obama will speak with entrepreneurs and American CEOs at a summit with the US-India Business Council. The speech the President will focus on the enormous potential for both countries to expand growth and opportunity. ?India is a cornerstone of our broader Asia approach?, said the deputy national security advisor for strategic communication Ben Rhodes.
The centrepiece of that approach will be Obama’s private dinner with Singh on November 7. Rhodes said Singh is ?somebody who has had a close intellectual connection with the President on a range of issues surrounding economic growth and development?. They have shared a close personal relationship since their first meeting at the London summit of the G-20.
Another key event in the schedule is the address to Parliament, where the aides said ?he will address the broad range of issues on which the US and India cooperate?political, security and economic, including the alignment we have with the Indians on a number of issues?.
US is keen to tap into the growth dividend from India as a counterweight to China. Faced with a dwindling rate of job creation in USA, the current administration is keen to leverage the India story to re-position USA as a manufacturing centre. This is different from its China strategy whose low cost manufacturing helped successive US governments to keep prices low and expand credit.
