The US today said if India wants to be a strong strategic partner, it must have the economic strength to back up its growing global leadership and its economy cannot achieve full potential without strengthening intellectual property rights and creating a more transparent tax regime.
“For India to be a strong and capable strategic partner, it must have the economic strength to back up its growing global leadership,” Assistant Secretary of State for South and Central Asia, Nisha Desai Biswal, told members of the Senate Foreign Relations Committee during a hearing.
The fast-growing economic partnership between India and the US is based on the understanding that deepening the trade and commercial ties between the two countries will advance opportunity and prosperity for Indians and Americans, she said.
Biswal said despite significant developments, there is still much to be done to get two-way trade much closer to its potential.
“While India’s business climate has improved – India climbed four places on the World Bank’s ‘Ease of Doing Business’ survey last year – our companies still struggle with an over-burdened and inefficient legal system for adjudicating commercial disputes and with a variable – and at times inconsistent – regulatory environment and tax code,” she said.
Among steps India can take to attract more companies would be to negotiate a high-standard bilateral investment treaty (BIT) with the US, which would send an important signal to US investors that India is not only open for business, but also open to liberalizing its trade and investment practices, Biswal said.
“While India has made some progress in improving the ease of doing business, its economy cannot achieve its full potential without strengthening the protection of intellectual property rights and creating a more transparent and predictable regulatory and tax regime,” she said.
“While these issues are some of the most challenging in our relationship, they are also some of the most important for both countries to get right,” the top American diplomat said.
Biswal told lawmakers that the progress that India and US have made over the past eight years in strategic, economic, defence and security, and energy and environment ties has truly ushered in a new era of relations between the US and India, strengthening the foundation of a partnership that will help ensure that the Indo-Pacific region and the world is a more peaceful and prosperous place.