With the presidential elections nearing, India is optimistic about deepening relations with the United States regardless of who sits in the Oval Office next year, said India’s consul general in Atlanta, Nagesh Singh.
“I’m confident that at the pace at which we are moving ahead, it will be the defining partnership of the 21st century that President Obama described,” said Mr. Singh.
Mr. Singh has reason to be positive. Strategic initiatives between the United States and India in areas spanning science, technology, education, trade and defense have flourished under the successive administrations of presidents Clinton, Bush and Obama. Mr. Singh also credited the work of the Senate India Caucus, which seeks to advance bilateral relations.
Even Republican presidential candidate Donald J. Trump, broadly known to be running on an anti-trade platform, speaks about India in glowing terms. At a recent Bollywood fundraiser, Mr. Trump said Mumbai is “a place I understand” and vowed that the U.S. and India would be “best friends” if he is elected. Indeed, India is one of the countries that has been spared his withering criticisms. For her part, Democratic presidential candidate Hillary Clinton co-founded the Senate India Caucus during her term as U.S. senator in 2005.
Speaking at Global Atlanta’s monthly Consular Conversations series hosted by Miller & Martin PLLC in October, Mr. Singh shed light on India’s striking economic transformation, significant challenges and future roadmap. As India’s consul general based in Atlanta, Mr. Singh is responsible for Indian interests in Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina, Tennessee and the U.S. Virgin Islands.
India’s Transformation
According to the World Bank, 131 million Indians were lifted out of poverty between 1994 and 2012. The country is projected to be the world’s fastest growing economy in 2016, with 7.7 percent GDP growth. Attracting $63 billion in 2015, India became the world’s largest recipient of foreign direct investment, according to the Financial Times.
While the economic indicators are striking, Mr. Singh believes a shift in attitudes among Indians has also been transformational. He described India today as an “aspirational India, an ambitious India …and it believes things can be achieved.”
India’s 2014 unmanned mission to Mars — completed at a cost of just $74 million — a highway building spree adding 11 miles of roadways daily, and ambitious renewable energy targets are just some examples of India’s new can-do attitude, said Mr. Singh.
Another example of changing attitudes in India is higher tolerance for risk, which has propelled India into becoming the world’s fourth ranking startup hub. There total number of Indian “unicorns,” which are venture-backed private companies valued at $1 billion or more, now stands at nine.
Despite its celebrated progress, 22 percent of India’s population still endures extreme poverty, surviving on less than $1.25 a day. Mr. Singh acknowledges the disparity, but argues that rapid economic growth, and the government’s focus on economic reforms, will continue to lift Indian’s out of poverty. “We are on the right track … and by continuing growth and addressing inclusivity, we will get there.”
India is indeed still a land of contrast that has gone from a “food basket-case” to in many cases a “food basket for the world.” It has a large concentration of billionaires but also a few hundred million illiterate people.
“Time travel does not exist, but go to India and you can be living from the 19th century to the 21st century,” he said.
Reforms for The Next Stage of Growth
The most anticipated feature of Prime Minister Narendra Modi’s reform agenda, the Goods and Services Tax (GST), is expected to unleash a boom in interstate commerce. Approved by both houses of parliament in August and set to be implemented in April 2017, the GST will eliminate the multiplicity of taxes levied on interstate commerce by state governments, reducing associated costs and delays for businesses struggling to meet tax compliance mechanisms that vary by state.
Economists estimate the GST will add 2 percentage points to GDP growth, said Mr. Singh. The passage of a single, national taxation system for goods and services is also expected to increase transparency and reduce corruption. A GST Council made up of state finance officials is in the process of ironing out standard rates by sector in bands ranging from 6 to 12 to 18 to 26 percent depending on the product category, with a possible additional levy on “sin” goods like alcohol and tobacco.
The GST will also provide a source of revenue for India’s 29 states, eliminating the need to wait on the federal government’s finance commission to decide how to allocate funds for crucial services like education and health, which are already administered at the state level.
“We all believe decentralization in government is a good idea, because the closer you are to your constituency, the better you understand the problems and the better you serve them, so that’s going to be a huge impact of the GST,” Mr. Singh said.
For more controversial reforms, such as those addressing land, labor and agricultural issues, the Modi government is leveraging “competitive federalism,” explained Mr. Singh, encouraging states to compete with each other to attract business investment. Despite high hopes for quick changes, Mr. Modi’s success in Gujarat, a state of more than 60 million people, has to be replicated gradually given the disparity and diversity across India. Mr. Singh pointed to an analogy the prime minister often uses.
“For a goods train to be turned around, first you have to stop the momentum on which it’s going, then you have to go up and down to try and find a track. He said, ‘India is like a goods train,” Mr. Singh said.
Another top priority for India is the “Make in India” initiative. India leapfrogged the manufacturing phase of economic development and jumped into services. But the service sector cannot create enough of the high-paying jobs India needs for growth, spurring the “Make in India” project to attract FDI in the manufacturing sector.
Mr. Modi’s contribution through Make in India and other plans like Digital India and Skills India, has been to change the prevailing narrative, leading to confidence that made the difference in attracting investment.
“Infrastructure didn’t improve in a year. Corruption didn’t vanish in a year. It was a perception of how the rest of the world looked at India,” he said.
Implementing a nationwide agenda can be slow and sometimes contentious. India has 150 political parties with representation in municipal state or national government, and the Congress Party-led government in power before Mr. Modi’s Bharatiya Janata Party had 40 in its coalition.
But it is a price India is willing to pay for a democratic process that sometimes causes lumbering movements.
“Our pluralistic democracy is our greatest strength and equally our greatest challenge,” said Mr. Singh, noting that the GST took a decade to enact.
Georgia, U.S. Benefit from India Partnership
While U.S. investment in India is substantial, the relationship is not a one-way street. Quoting a study released by the National Association of Software and Services Companies, or NASSCOM, in India, Mr. Singh said Indian IT companies directly and indirectly supported 400,000 jobs in the U.S., made over $2 billion worth of investments and paid $20 billion in U.S. taxes between 2011-15. In the defense sector, India has purchased over $14 billion in weapons and other hardware from the U.S. since 2005, including C-130 aircraft from Lockheed-Martin’s Marietta plant.
In the health-care industry, doctors of Indian origin are a recognizable mainstay across America. There are 130,000 Indian doctors in the U.S., and 5,000 of these doctors serve patients in Georgia, said Mr. Singh, who the following week hosted a health care panel at the consulate with experts from around the Southeast.