US-India partnership ushering in next phase of growth: Report

May 06, 2023 | 15:07:15

The vibrancy of the Indian economy presents US companies with unparalleled opportunities to trade, invest and grow.

NEW DELHI: India today stands at a global vantage point. The energies and aspirations of its industries and citizens, coupled with increasingly open economy and a strong technology sector, has demonstrated the potential to operate at scale with skill. Emergence of the US as India’s largest trading partner marks an important shift from historical trading partners at the back of an integrated value chain that both countries share with each other across industries. The vibrancy of the Indian economy presents US companies with unparalleled opportunities to trade, invest and grow -- and the jobs they create in India act as a multiplier to the economy, be it in manufacturing or the services sector. To take a further deep dive, KPMG in India in collaboration with AMCHAM India has released a perspective titled – “The India edge: U.S. industries catalysing the growth trajectory”. 

The report was released by Union Minister for Commerce & Industry Piyush Goyal at AMCHAM India’s 31st Annual General Meeting.

Speaking on the occasion, Goyal said that the India-US partnership is the defining moment of the 21st century and reiterated the “ChaleinSaathSaath: Forward Together We Go” motto underscoring the depth of the partnership.

He emphasised that the leaders of both the countries, PM Narendra Modi and US President Joe Biden, understand each other and work smoothly together to find solutions to complex geopolitical problems around the world. Goyal mentioned the 5Ts-Talent, Technology, Tradition, Trade and Trusteeship- identified by the Prime Minister as the vision for the India-US relationship.

He noted that the bilateral trade between India and US has been the highest in the last couple of years and said that it is aimed to increase multifold in the coming years. He said that the target of US$2 trillion exports by the year 2030 is doable with the increasing eminence and recognition of India across the world and with strengthening partnerships with like minded countries having shared values like the U.S.

Goyal cited the examples of many Indian companies operating in the US and vice versa and highlighted how significantly they are contributing to each other’s economy. The Minister said that these business relations are deepening the partnership between the two countries. He expressed hope that more and more U.S. based corporations will work together with Indian companies in the near future.

He encouraged companies from the US to establish their base in India and expand to newer frontiers like the markets of Africa and South-East Asia. He said that India offers assured prosperity and growth to the U.S. companies with the recent policy reforms undertaken with focus on the fundamental macroeconomic parameters, affordable labour costs, inclusive and sustainable development and increasing ease of doing business.

Goyal said that the businesses in both countries can work together to expand to the next level in many sectors like defence manufacturing, pharmaceuticals, textiles, engineering products, auto components, electrical products, agricultural products, etc. on the merchandise side while IT, accounting, business processes outsourcing, research & development, tourism, etc. on the services side. He said that the bilateral trade between both the countries is growing rapidly and has tremendous potential to scale further heights. He said that the technical and managerial talent offered by India to businesses around the world cements India’s relationship with the world; he cited the example of many U.S. corporations having Indian or Indian-origin CEOs.

He said that Amrit Kaal is the defining period for India in which the demographic dividend is contributing to the growth of the economy bringing prosperity & future for the country. He said that the reform processes undertaken by the government in the last 9 years will turn India into a global manufacturing hub. He said that the efforts of the government towards improving logistics infrastructure like connectivity, power, etc. is leading to better quality of life for the people of India and enabling the aspirational youth to contribute to the rapid development of India. Shri Goyal stressed that it is important for the industry to stand on its own feet with delivery of high quality products and services with government interference in business to the minimum.

Goyal said that there is multifarious interaction between India and the US at various platforms like the Indo-Pacific Economic Framework for Prosperity (IPEF), U.S.-India CEO Forum, Quad, etc. He said that the comprehensive & strategic partnership between India and the U.S. is based on the strong foundation of shared values, commitment to the rule of law, transparency, freedom of business, freedom of media, independent judiciary, etc. He said that there is complementarity between the India-U.S. economy and both countries collaborate to make prosperous and rational decisions.

The report highlights that the Indian economy has been on a constant upward trajectory. Having weathered the turbulence during the past year, the country is on firm ground and is expected to be the fastest-growing major economy in the world. This growth trajectory is aided by strong domestic demand, impetus on infrastructure development, and proactive policy measures which are increasing confidence among investors and crowding in capital. Factors like a skilled workforce, technology proliferation, a flourishing start-up ecosystem, record exports, and a slew of tax reforms to drive competitiveness are expected to further drive this growth trajectory.

US India relationship is built on the two countries’ interest to expand trade, collaborate on technology, and build trust. Both countries have been cooperating on a gamut of areas including defence, IT, logistics, AI, space exploration, and cyber security, among others. U.S. companies are increasingly looking at India as an alternate supply chain destination as they look to build diversification and resilience in their value chains. With this partnership only expected to gain momentum, we can expect to see this collaboration lead to an increase in investments across sectors, enable opportunities for domestic manufacturing in India, strengthen supply chains, elevate technology partnerships, and create livelihoods in the process.

Commenting on this collaboration, Naveen Aggarwal, Office Managing Partner – Delhi NCR and US-India Corridor Leader, KPMG in India said, “US- India relationship today is bigger, bolder, and better than ever before. With economic partnership now beginning to mirror the trajectory in defence, security, and strategic domains, there are newer avenues to trade, invest and grow, especially across deep tech, supply chain, global captives, amongst others. US industry will play a critical role in driving competitiveness, innovation, and gainful employment across sectors, as India embarks on the journey of becoming the 3rd largest economy by the turn of this decade.”