Pair the harsh global rhetoric of the U.S. with the politically fueled news cycle churning in India these days, and it might be easy to grow jaded.
But a group of panelists convened in Atlanta in December saw opportunity ahead in 2019, even as they took a hard look at the tough hurdles ahead for the country’s economy.
For Atman Trivedi, an Asia specialist at Washington consultancy Hills & Co., the problem isn’t the direction India is going; it’s the speed. The country still remains stubbornly closed to foreign investment in some sectors, which has contributed to the relatively low bilateral trade between India and the U.S.
While that number grew 15 percent to $126 billion in 2017, it’s still five times less than the volume of U.S.-China trade and remains even lower than trade with South Korea, which hassles than 1/20th the population, Mr. Trivedi said in a panel discussion hosted by the Georgia-Indo American Chamber of Commerce.
India has shown some resistance to playing a tit-for-tat trade game with the U.S., even given the steel and aluminum tariffs the U.S. has imposed on the “laughable grounds” of national security, he said.
That’s good, as getting embroiled in a broader trade spat will do nothing to advance the broader imperative of the Indian economy: creating jobs for the 10-12 million young people who enter the workforce every year, and who are increasingly migrating into major cities.
Now is a critical time, Mr. Trivedi said, for India to build on substantive reforms that have helped India climb global business rankings. That includes the Goods and Services Tax, or GST, which replaced a system of state levies that stymied commerce, though some have pointed to haphazard implementation. With parliamentary elections forthcoming in May, politicians must “understand and resist temptation to use trade as a weapon to appeal to their political supporters,” he added.
India has one major advantage, says Jagdish Sheth, an Emory University marketing scholar who comments frequently on India and emerging markets: It’s not China.
With a trade war under way, investors are devaluing China and looking for alternatives, giving India an opening in the manufacturing space and also in its technology ties with the U.S. At a time when the U.S. is mulling blocking Chinese tech giants like Huawei and ZTE over cybersecurity concerns, Dr. Sheth predicted democratic India won’t face such a backlash. And foreign joint ventures with Indian e-commerce firms will help connect Indian producers with global supply chains, he said.
David Gault, who has decades of experience handling trade and logistics for the India market, said one area where the China-to-India shift can be seen is in furniture.
“India has a very small segment of that market, but it is growing leaps and bounds,” Mr. Gault said, an assertion borne out by the rapid growth of India-based Surya in northwest Georgia.
Mr. Gault added that he’s noticed a lack of capital among suppliers in India that could be hampering their growth and global expansion, in part because government red tape is tying up their cash. Fix that problem, he said, and growth would take off even further.
“(Indians) are the most efficient, shrewd businesspeople in the world. You give them some money, and they’re going to turn it into gold. The government just needs to get out of the way, and w we hope that happens more and more,” he said.
For Atlanta to capture more of that activity, Elliott Paige, director of air service development at Hartsfield-Jackson Atlanta International Airport, believes the city needs a nonstop flight to India. He has been talking with Air India and other carriers about the possibility, but no one has taken the plunge yet.
In the background of such talks, he said, is the “hostile rhetoric” in global trade-policy environment as the U.S. questions the entire system and moves toward bilateral deals. A former World Trade Organization negotiator, Mr. Paige called for more multilateralism, not less, arguing that small and developing countries need such organizations to compete fairly with behemoths like the U.S. and China.
The Dec. 4 panel discussion followed a speech by recently appointed Consul General Swati Kulkarni, who addressed the GIACC audience for the first time.
For more on the chamber, visit www.giacc.net.
Read more coverage of the event by Khabar magazine: GIACC welcomes Consul General at U.S.-India trade seminar