In a letter to President Obama, USIBC President Mukesh Aghi Writes on Prime Minister Modi's Recent Successes
May 23, 2016
Dear Mr. President,
Relations between the U.S. and India are at an all-time high, due in no small measure to the work you have accomplished with Prime Minister Modi. With Prime Minister Modi’s upcoming visit to Washington D.C. in early June, the fourth visit in the last two years, the U.S.-India Business Council (USIBC) believes that this is an opportune time to reflect upon the successes of the U.S.-India strategic and commercial partnership and the avenues in which we can continue to secure the progress of our nations.
To start, we applaud your leadership on concluding an ambitious Paris Agreement with Prime Minister Modi that will establish a better world for generations to come. Prime Minister Modi has also displayed his commitment to developing a clean energy economy by increasing India’s renewable energy capacity target to 175 gigawatts (GW) by 2022.
Despite deep legislative challenges, Prime Minister Modi has incrementally worked on micro-level reforms to boost investor confidence. These include accelerated infrastructure investment, greater openness to foreign direct investment in defense, civil aviation, railways, and insurance, passage of a bankruptcy code, and facilitating a transparent auction of key natural resources. The Government of India is also improving its tax regime. The Governments of India and the United States recently finalized bilateral advance pricing arrangements under which they have resolved more than 100 pending transfer pricing cases. The tax reforms presented in the latest budget were unprecedented and lay the ground work to create an attractive environment for foreign investors. All of these reforms have resulted in improving India’s Ease of Doing Business index according to the World Bank.
India and the United States are more aligned than ever before on matters of defense cooperation, homeland security, joint training, and cybersecurity. The recent introduction of S. 2901, “Advancing U.S.-India Defense Cooperation Act” in the U.S. Senate and its companion bill in the U.S. House of Representatives, which was adopted into the National Defense Authorization Act, elevates India as an important partner that can uphold security in Asia and around the world. Prime Minister Modi’s government is working to consolidate the strategic partnership with the U.S. The Prime Minister has made Make in India a centerpiece of his policy agenda and building India’s defense industrial base is central to this effort. India will need greater investment to update its military base, and American defense firms are especially well-suited to this task. As you will agree, consensus-building is challenging in democracies and the above-mentioned reforms have been critical for foreign investors, who continue to be buoyed by the vibrancy of India’s investment landscape.
USIBC is encouraged by the advancements made by the two governments and looks forward to continuing dialogue and progress on matters related to innovation, technology transfer, movement of professionals, and other non-tariff barriers in the upcoming commercial and strategic dialogues. While not all issues, whether commercial or strategic, are easily resolved between the two countries, those who are vested in the relationship agree that our countries are in a better place today. Prime Minister Modi has demonstrated an increased willingness to engage in dialogue to address the concerns of the industry while balancing India's domestic interests. We hope that the positive trajectory of the relationship will continue to flourish in the years ahead in order to reach our goals of mutual prosperity and peace.
Dr. Mukesh Aghi
President, U.S.-India Business Council.