Tim Roemer, a former U.S. representative from Indiana, served as the U.S. ambassador to India from 2009 to June 2011. He is a senior director and strategic adviser at APCO Worldwide.
China’s slowing economy, Europe’s precarious fiscal crisis and the recent focus on Afghanistan at the NATO summit all point to challenges and opportunities for the United States — and for India. Growing cooperation over the past decade has brought our two democracies closer. With the Obama administration’s “rebalance to Asia,” now is the time to focus on tangible results that will deliver economic benefits to the middle classes of both countries.
This week’s “strategic dialogue” between Secretary of State Hillary Rodham Clinton and External Affairs Minister S.M. Krishna should prioritize the building of stronger trade and commercial relationships to compensate for losses in other global markets and to help people struggling at home.
Security cooperation has never been better. The United States and India share unprecedented amounts of highly sensitive intelligence and have started a homeland security dialogue; the United States has joined in more combined defense exercises with India than with any other ally. Defense sales are at record levels. We also have historic new collaboration on nuclear nonproliferation issues.
Our countries are working closely together on common strategic interests. In Afghanistan we have identified education, energy and women’s empowerment projects to assist the Afghan people. The United States and India have a trilateral agreement with Japan to discuss areas of shared values; we both are promoting best practices on food security with three African nations; we both are working on new initiatives with Bangladesh and Burma; and the United States has quietly supported bilateral peace talks between India and Pakistan.
There is more good news on the bilateral economic relationship. On trade, U.S. exports to India are up 32 percent between 2009 and 2011 as total trade of goods and services approaches $100 billion. Moreover, we have new agreements to expand further on energy technology, space, higher education and removing barriers to high-technology exports. Business-to-business ties on clean energy and people-to-people ties with universities are potentially unlimited.
Yet too many U.S. firms still find obstacles to doing business in India. The landmark 2008 civilian nuclear agreement has been so radically altered by India’s parliament that U.S. businesses may be frozen out of the market. Prime Minister Manmohan Singh initially opened multi-brand retail opportunities to U.S. business but then suddenly changed his mind. India’s infrastructure will get a $1 trillion investment and improvement, although most U.S. businesses will be discouraged from competing.
The need to refocus on bilateral trade should be obvious. Indian growth has dropped from more than 9 percent to slightly under 6 percent. The U.S. economy is searching for market opportunities to compensate for severe problems in Europe and challenges in China. The United States needs to generate more manufacturing jobs, creating competitively priced products for a rising Indian middle class. Similarly, India needs to increase growth and liberalize markets, just as Singh achieved as finance minister in 1993, or it risks failing to provide the inclusive growth model that will elevate millions of desperately poor people out of poverty.