For business and trade experts, while most of the world faced a lockdown on businesses, trade and foreign investments for most part of 2020, India and the US worked to build strategic and commercial relations during the pandemic.
New Delhi: Year 2020 didn’t bode well for the global economies and year 2021 is not signalling any positives either. In fact, it is threatening to be even worse and more menacing than last year’s nightmare. Blame it on the deadly coronovirus pandemic, which made the entire world helpless, panicked and devastated. Millions have lost lives, hundreds of millions have fallen sick and lost jobs, and trillions of dollars have been shaved off the global economy with countries from the US to underdeveloped to most developed ones suffering alike. India too has been on the receiving end along with top economies, including facing Chinese arrogance on the borders during the pandemic. But call it an opportunity in crisis, as there is a silver lining for India. First, the Aatmanirbhar Bharat scripted the new story of India’s resilience and the common threat—China brought India and the US more close to wage a united war against the Dragon on all fronts.
For business and trade experts, while most of the world faced a lockdown on businesses, trade and foreign investments for most part of 2020, India and the US, have in fact, worked to build strategic and commercial relations during the pandemic, something which is worrying China more, hence the latter’s cosying up to Russia and forming a new alliance with Iran. Not only have the two countries enhanced their strategic and military engagement, including high-end weapons sales, more Indian American ventures are emerging in high-tech space, underscoring the deepening of the relationship between the two largest democracies on business and trade fronts.
M.R. Rangaswami, founder of Indiaspora, the largest platform of Indian American CEOs, techies and entrepreneurs, talks about the emerging positive signals, saying: “We don’t need 20-24 hour flights to business…we have met virtually more than before and done good business and opened new opportunities of trade and investments between the two nations.”
True, experts are positive on the flow of investments in India, new business ventures, including giant brands like Apple setting up base in India and in return, Indian tech company CEOs setting up operational bases in the US in the last six months are a tell-tale sign of “Beat the Pandemic Plan”, making New Delhi and Washington DC perfect partners in business.
Mukesh Aghi, President and CEO of US-India Strategic Partnership Forum (USISPF), explains the emerging positive picture of India-US business. Aghi says: “The potential of the partnership continues to be strong and had moved from transactional to multilateral. We have seen a very high level of importance being attached to India and the Indo-Pacific partners in the first 100 days of the administration—with Secretary Llyod Austin’s visit, followed by John Kerry’s visit, leader level dialogue coming up on climate change. The upswing is not a matter of coincidence. It is driven by two important factors—that a militarily strong India is essential for regional peace and stability; and India’s economic prosperity is necessary for American companies. This is the fastest growing partnership in the world.”
Aghi cites the US investments in India as the biggest indicator of this growing business partnership between the democracies. “We have seen a slowdown in goods trade due to the pandemic, but services trade continued to grow. India also attracted $72 billion in FDI inflow; USA is one of the top investor countries accounting for 24.28% of FDI equity flow. The two sides have also discussed ways to expand trade, cooperate on digital trade, intellectual property, agriculture, labour, climate and environment. While differences exist, these are discussions that trade partners need to have. Trade will go up as economies open up and the vaccines get rolled out.”
Rangaswami, who is also an entrepreneur, investor and corporate strategist, says, “The US-India relationship is getting stronger by the day. In the past year major tech companies and investors poured billions into Jio and other deals. Most of the Silicon valley leaders have major centres in Bangalore and other cities. There are so many direct flights from places like San Francisco to Bangalore and more are on the horizon. And add to that the China issue is one that will get the two countries even closer together.”
There are some clear business partnerships during the pandemic, stirring up interest among business leaders in the US. Aghi, whose USISPF is the one behind building a steady inflow of US investments and indirect jobs into India since last four years, says, “Apple has started assembling iPhones in India. Today, Apple is exporting over 400,000 phones per month from India. Next is iPad’s manufacturing in India. HP has moved its Aruba product manufacturing in India. There are many companies which have started the process of investing more and more in India.”
To this, Rangaswami talked about the trend which is key to building this new partnership. “You can look at Indian tech companies in many ways—ones that develop for the local market, others that sell also in markets like India and many that sell to US and western markets. The last segment is one where companies have to invest in the US. In many cases, the CEOs have moved here and they have built to organizations that are typically customer facing. These include names like Freshworks, Uniphore and Innovacer to name a few. I predict that many of them will go public on the US markets as well,” Rangaswami said.
Interestingly, India has made significant gains from loss of markets to China, but it’s not entirely for India as others have stepped in too to make the most of the business opportunity from China’s exit from the global demand-supply chain. India needs to do more to compete with others.
Aghi says, “India has definitely gained from companies gradually moving out of China. It may have not gained 100% because it has to compete with Vietnam, Thailand, Cambodia and Bangladesh. What we are seeing is high end manufacturing moving more to India and getting it integrated into global supply chain…Besides all the areas of cooperation, there will be an increased focus on certain sectors like healthcare, education, hi-tech manufacturing, rare earth due to the nature of the pandemic and geostrategic considerations.”
Added Rangaswami, “India continues to be the place for large US companies to set up innovation centres since almost all industries are using technology to go digital to serve their customers. The software and tech companies are also using Indian talent in greater numbers due to the huge amount of money being deployed by venture capitalists.”
And the timing to build further on this India-US business partnership is most apt now with the Biden administration easing the visa norms for H1B visa seekers as Indian IT companies can get more tech talents into the US to enlarge the scope of business and trade partnership.
Says Aghi: “Industry is very pleased that the White House has decided to let the Trump Administration’s suspension of non-immigrant visas expire. While protecting American workers is a noble goal, the pandemic made it even more critical for businesses to have access to STEM workers.”
Rangaswami is cautious though and doesn’t give instant hope on that front. “This (visa) is a more complex and nuanced issue. Immigration rules will take longer to implement and the US is also looking into dealing with undocumented people as well as refugees. The system is being strained beyond limits and unfortunately frustrating delays have to be expected. However, the long term outlook is bright,” says the Indiaspora Founder.
But this may sound good to many ears in line for US visas. Aghi says: “According to an analysis by the National Foundation for American Policy (NFAP), there are now over 1 million active job vacancy postings in computer occupations in America in March 2021, and the unemployment rate in computer occupations was down to 2.3% in February 2021, compared to 3.0% in January 2020. In other words, the dearth of STEM talent is even more pronounced today than it was before the pandemic. High-skilled tech workers have been deemed essential by the Department of Homeland Security, and they are helping us work from home and will continue to be a critical part of America’s economic recovery.”
Time to make India and the US closer with business diplomacy and benefit mutually.