TIA Blog


The U.S.-India Trade Policy Forum – An Opportunity to Strengthen Our Commercial Ties

According to the Embassy of India, U.S.-India bilateral trade has increased by an astounding 1,037.5 percent over the past 23 years and totaled $63.7 billion in 2013. I would also echo the views of the Embassy that the bilateral trade and commercial relationship is a "crucial component" of the dynamic and growing overall relationship between our two countries. Indeed, there are significant opportunities to strengthening the commercial and economic relationship by lowering barriers to trade and investment.

Nowhere is this more evident than in the information and communication technology (ICT) sector, which has contributed to the communications infrastructure and global platform for India's world class IT-enabled services industry. It contributed almost $63 billion in exports for the Indian economy. Foreign-based ICT manufacturers are also investing in India, with telecommunications and computer hardware and software sectors attracting the 3rd and 4th largest amounts of foreign direct investment inflows to India, totalling $16.5 billion and $13.2 billion, respectively, over the past 14 years.

This is the case because India continues to be a growing and dynamic market for ICT products and services for India's domestic use, and for export to the world. Crucial to this point is that the ICT sector is inherently global in nature – from the supply chains that source subcomponents from multiple countries to the borderless nature of the IT-enabled services that depend on the Internet. Beyond the potential growth of India's ICT exports and domestic ICT manufacturing goals, it also has important domestic goals to enhance digital connectivity throughout the country through the Digital India initiative, which will improve the lives and prospects of India's citizens.

All of these goals will require an ICT ecosystem that thrives in a commercial environment that offers predictability, transparency, and nondiscriminatory treatment of ICT goods, regardless of where they are manufactured. Currently, the ICT sector is being confronted by a series of policies that puts at risk India's ICT ecosystem through discriminatory tariffs on telecommunications equipment, potential security testing requirements that run counter to global norms, and other regulatory barriers that will impede the growth of India's ICT sector.

It is with this backdrop of great potential economic and commercial gains for India and the United States, along with the attendant risk of policies that would slow progress towards stronger, mutually beneficial, commercial ties that the U.S.-India Trade Policy Forum (TPF) will meet on November 25th in New Delhi.

It has been roughly four years since the TPF last met, so we at TIA are very pleased to see that both governments are looking to underscore the importance of the U.S.-India commercial relationship by finding meaningful ways to reduce barriers to trade for all industry sectors, and in particular, the ICT sector.

The TPF is also an opportunity to identify areas of collaborative work between the two governments that can mutually benefit the global ICT industry, which includes companies based in India and the United States. One concrete example for the telecommunications sector would be to start discussions between the governments towards a mutual recognition agreement for telecommunications equipment (MRA). An MRA would facilitate trade of telecommunications equipment by promoting the mutual acceptance of conformity assessment procedures in India and the United States.

We look forward to a productive set of outcomes from the TPF in New Delhi and for this to be the first of more regular engagements between the U.S. and Indian governments, which will help improve the commercial environment in both countries for the mutual benefit of the ICT sector in India and the United States.