Huge Potential to Grow U.S.-India Trade: Arun Kumar

India West
Interview by Sunita Sohrabji

AK1Arun Kumar, Assistant Secretary of Commerce for Global Markets and DirectorGeneral, U.S. and Foreign Commercial Service. The Indian American official accompanied President Barack Obama on his recent trip to India. (photo courtesy of Arun Kumar)

File photo of Arun Kumar interacting with students at IIT Gandhinagar.

India-U.S. economic trade, which currently stands at about $100 billion, will be greatly improved by initiatives put into place by both countries during President Barack Obama’s Jan. 25-26 visit to India, said Commerce Department leader Arun Kumar, who accompanied the president on the trip.

In an interview with India-West shortly after his sojourn to India, Kumar – Assistant Secretary of Commerce for Global Markets and DirectorGeneral, U.S. and Foreign Commercial Service in the Commerce Department’s International Trade Administration – said several memorandums of understanding had been signed by the two countries, including collaboration on India’s “Smart Cities” initiative. A new “Infrastructure Development Platform” will co-join U.S. companies and Indian infrastructure development.

Most importantly, the U.S. has added commerce to its “Strategic Dialogue” plan with India, said Kumar, a former partner and member of the board at KPMG, who was appointed to the Commerce Department post in March 2014.

“I think that the prime minister (Narendra Modi) sincerely wants to improve the quality of life for all Indians,” the Indian American official told India-West. “I see opportunities of all kinds in India – across the board.”

Below are Kumar’s remarks in full:

India-West: Were there concrete deliverables on trade that came out of the Obama/Modi discussions or the CEO Summit with Indian and Indian American business leaders?

AK:Secretary of Commerce Penny Pritzker and I accompanied the president on his visit to India, and I can tell you first-hand that the change in our bilateral partnership is noticeably a success. We see the Indo-Pacific as the key to the Administration’s ‘Rebalance to Asia,’ and the commercial dimension is a vital part of that. We need to partner to develop jobs in both countries.

The expansion of the bilateral ‘Strategic Dialogue’ into the ‘Strategic and Commercial Dialogue’ is recognition that the commercial relationship is essential to our strategic partnership, and it is recognition of a change in how we will work with India. This will open up a way for us to cooperate more on policy issues and industry sectors.

The establishment of the Strategic & Commercial Dialogue is very significant. The U.S. has a similar high level dialogue with only one other country, the Strategic & Economic Dialogue with China.

Infrastructure Collaboration Platform

Just prior to the president’s visit, I traveled to India to launch an Infrastructure Collaboration Platform with the Indian Finance Ministry to help match U.S. companies to infrastructure opportunities in India.

This is an area of great opportunity that will really allow us to move the needle on our trade – which stands two-ways at almost $100 billion a year but could be so much greater. Our companies are globally competitive and will succeed when they have better information about opportunities and a level playing field.

Also, the U.S. Trade and Development Agency signed MOUs with three Indian states on developing smart cities with U.S. industry — Vizag in Andhra Pradesh, Allahabad in Uttar Pradesh, and Ajmer in Rajasthan.

Digital India Initiative

The Modi government has also launched the Digital India Initiative, which seeks to open opportunities in digital infrastructure and the delivery of public and private services over the Internet. India’s need for greater technology adaptation and integration has been identified as a priority area for collaboration. I see an increased role for U.S. technology in helping India attain its immediate and longer-term development goals.

India-West: There was no “break-through” on the civil nuclear deal, a large market for U.S. companies. Whilst Modi has announced a framework of sorts, will this satisfy U.S. corporate concerns regarding liability issues, which have thus far stalled development of U.S. nuclear power plants in India?

AK: Agreements related to civil nuclear trade represent a potentially very significant export opportunity for U.S. industry, though we will know more when the details emerge and the U.S. promoters analyze the legal and regulatory framework.

(India-West note: Modi has suggested the establishment of a $100 million insurance pool by India to mitigate damages related to nuclear power accidents. Critics have argued that a $100 million is hardly enough to offset destruction in events such as the 1986 Chernobyl disaster in the Ukraine.)

India-West: Solar power also represents another huge windfall for U.S. investors. Do you believe the Modi government is committed to allowing U.S. solar companies to develop throughout the country, as he did in Gujarat?

AK: I think there is genuine opportunity here, and I am hopeful that we will be able to work with our partners in the Indian Government to address remaining obstacles. That is in part why the President announced that we will lead a clean energy trade mission to India.

(India-West note: Before the meeting with Obama, Modi had announced a new goal of generating 100 gigawatts of solar power by 2022, a sizeable step up from 20 GW by 2020.)

India-West: Sens. Mark Warner and Cornyn — co-chairs of the Senate India Caucus — have urged the prime minister to lift foreign direct investment restrictions for products bought over the Internet, currently a $5 billion market in India. Modi had announced in July — after elections — that he would lift FDI Internet restrictions, but has not yet done so.

AK:I hope that we will see progress here as we work with India to realize how lifting these restrictions can benefit not just consumers but businesses and improve the efficiency of supply chains.

India-West: Despite the BJP’s very vocal opposition to FDI, do you believe Modi is committed to opening up the Indian market to U.S. companies?

AK:I think that the prime minister sincerely wants to improve the quality of life for all Indians, and liberalization can be a path for the inclusive growth that will help create additional jobs.

I see opportunities of all kinds in India – across the board. That’s why we have such a strong presence in India. We have seven offices staffed by some 70 trade professionals. We also have a network of over 100 offices throughout the United States; these U.S. Export Assistance Centers serve as one-stop-shops for U.S. companies. So, I like to say that we are everywhere U.S. companies want to be.


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