The trade ties between India and the US likely to face turbulence in the post-Covid-19 world, as the future of oil, aviation and defence purchases are in turmoil. But many experts say that there would be new opportunities, too, for greater cooperation in sectors such as pharmaceuticals and textiles. Moreover, joint investments could be made by the two in other countries.
In the current situation, India’s aircraft purchases from the US is under a cloud with the aviation industry suffering a huge setback due to the worldwide lockdown, a sharp dip in global oil prices and a lack of certainty about defence deals amidst the current economic dip due to the coronavirus pandemic are some points of contention between the two nations, pointed out Suresh Prabhu, a senior BJP leader and India’s Sherpa to the G20.
Potential For Collaboration
Speaking at a webinar organised by the Indo-American Chamber of Commerce (IACC) on the topic, ‘The Covid-19 pandemic: How it will impact the India-US relationship’, Prabhu said that there were areas like pharmaceuticals, where equations were changing, and India and the US could cooperate and emerge joint winners.
“Earlier the US would say that India’s intellectual property rights (IPR) regime and the TRIPS agreement were not helping. But today, the Indian pharmaceutical industry is supplying medicines to the whole world. I feel India offers a potential for collaboration with a focus on new drug delivery system and molecules,” he said.
Prabhu said that the Indian IT industry and Indian students, too, are contributing significantly to the US economy, which would grow in the future.
Technical textile is another area where there is a huge scope for joint ventures, pointed out Naushad Panjwani from the IACC, West Asia Council. “IACC has MoUs with the States of North Carolina and South Carolina for taking Indian investors to the US for joint collaboration in the textiles sector,” Panjwani said.
He added that the American textile sector’s strength lies in functional, high-end textiles, driven by superior technology and innovations, while India has competitive advantage from fibre to fabric, and collaborations could work very well.
Economic Ties Are Strong
US-based Facebook’s recent $5.7 billion investment in India’s Reliance Jio amidst the on-going pandemic showed that there wasn’t a significant let up in economic ties, pointed out Ajit Ranade, President and Chief Economist, Aditya Birla Group.
The interest was both ways, as Indian companies were making investments in the US, Ranade added. For instance, the Aditya Birla Group itself had acquired US-based aluminium producer Aleris earlier this month.
Lt General Syed Ata Hasnain (Retd), Chancellor, Central University of Kashmir, said that he hoped that both the US and India would continue their 2+2 dialogue, as it helped keep economic and diplomatic relationship on track.