USIBC led an Executive Mission to DefExpo 2020, the 10th edition of the biennial mega defense exhibition of the Minister of Defence, Government of India at Lucknow from February 5-8, 2020. The mission met with key officials from the Ministry of Defense, as well as the governments of Uttar Pradesh, Andhra Pradesh and Tamil Nadu. The mission focused on raising awareness within the Indian government of the work U.S. defense companies are doing in India and the enduring importance of the bilateral strategic and defense relationship. Across the board, defense officials emphasized that the Indian government has received USIBC’s policy submissions, heard member suggestions, and incorporated recommendations on issues essential to deepening U.S.-India defense and aerospace collaboration. Meetings also focused on raising awareness around new opportunities for U.S.-India partnership, following the signing of the Industrial Security Annex (ISA) to the bilateral General Security of Military Information Agreement (GSOMIA) at the most recent U.S.-India 2+2 Ministerial Dialogue; India’s designation a Strategic Trade Authorisation-1 (STA-1) country in 2018; and the incorporation of industry players in defense co-development and co-production under the Defence Technology and Trade Initiative (DTTI) framework.
USIBC is grateful to Dennis D. Swanson, Vice President, International Sales, Global Sales and Marketing, Defense, Space & Security and Boeing Global Services, and Dave Sutton, Director for Asia, Lockheed Martin, whose leadership of the DefExpo 2020 Delegation was critical to the mission’s success. The delegation also included representatives from BAE, Continental Carriers, General Atomics, Jacobs, L3Harris, Northrop Grumman, Raytheon, Telephonics and Textron.
For participating members, DefExpo 2020 was an opportunity to showcase the best U.S. industry can offer to the Government of India. The mission conducted a series of high-impact meetings, including the following:
Major topics of discussion included defense offsets, Defense Procurement Procedure, indigenous content development, foreign direct investment (FDI) in the defense sector, Critical Defense Technology Transfer, flexibility in standard DPP contracts, intellectual property rights (IPR), ease of doing business, the Strategic Partnership Model, Defense Industrial Corridors and the linking of Make in India to the creation of a defense manufacturing ecosystem in India.
USIBC Session at DefExpo 2020
USIBC and the Ministry of Defence organised a session on the sidelines of DefExpo 2020, focused on the U.S. defense industry and ‘Make in India.’ Hon. Defense Minister Shri Rajnath Singh and Deputy Defense Minister Shri Shripad Yesso Naik delivered the program’s keynote remarks. Minister Singh emphasized that the United States and India have shared common values and principles in promoting global security, stability, and prosperity. These are not only showcased through close bilateral ties but also through trade, investment, and connectivity. The U.S.-India defense relationship has expanded significantly over the past decade, with India conducting more military exercises with the United States among other collaborations.
Deputy Defense Minister Naik noted the bilateral defense relationship has progressed from an exclusively buyer-seller relationship to a partnership focused on co-production, co-development and technology collaboration. He highlighted that under Prime Minister Modi’s leadership, India is building a robust defense manufacturing base and U.S. companies will be important partners as India connects with the global aerospace and defense supply chain. In addition, Andhra Pradesh Minister of Industry and Commerce Shri Mekapati Goutham Reddy spoke on the defense and aerospace hub that the AP government is developing, and emphasized the government’s desire to see participation from U.S. industry.
The session also included remarks by Dennis D. Swanson, Vice President, International Sales, Global Sales and Marketing, Defense, Space & Security and Boeing Global Services; Dave Sutton, Director for Asia, Lockheed Martin; David Park, Regional Director, International Business, BAE Systems Inc.; and Capt Dan Fillion, OCD, U.S. Embassy.
The U.S.-India Business Council hosted an automotive roundtable on January 31, focused on developing an advocacy agenda for the motorcycle, passenger vehicle and commercial vehicle sectors. USIBC organized the roundtable as the first in a series designed to convene industry leaders from both U.S. and Indian companies. Speakers included USIBC Senior Director Jasjit Singh; U.S. Chamber of Commerce Global Innovation Policy Center (GIPC) Senior Vice President Jonathan Weinberger; Alliance for Automotive Innovation Chief Policy Officer David Schwietert; and Ola Electric Mobility Co-Founder Anand Shah.
The session began with a presentation on automotive sector growth in the United States and India, the world’s largest and fourth largest automotive markets. As outlined below, auto markets are considerably different in the U.S. and India, reflecting the countries’ labor and fuel costs, as well as divergent consumer preferences. The roundtable focused on core auto issues including connected cars, privacy, content and auto-IT, and built on discussions held during USIBC’s connected car delegation to the Indian Mobile Congress (IMC) last year.
Held just a day before the announcement of India’s Union Budget 2020-2021, the session did not consider Budget implications – although the February 1 proposals offered little support for India’s struggling auto sector. Industry leaders had previously called for a reduction in GST on automotive goods to compensate for the hike in prices during the BS6 transition, clarity on a long-overdue scrappage policy, and incentives for manufacturers of electric vehicles and batteries. Instead, the budget increased custom duties on a range of both traditional and electric vehicles.
U.S. Market: Participants emphasized a softening of the U.S. auto market in 2019, with trends including a rise in average vehicle age, escalating prices and a growing consumer preference for leasing instead of ownership. U.S. consumers increasingly choose vehicles based on fuel economy and utility, noted Alliance for Automotive Innovation Chief Policy Officer David Schwietert, as demonstrated by growing sales and registration in the light truck category. Amid this changing auto landscape, Schwietert called for industry and government to re-evaluate how regulation affects consumer spending.
Regulatory Headwinds: In the United States, industry faces significant uncertainty around federal regulation and incentives. This uncertainty is compounded by ongoing litigation between the state of California and the U.S. federal government over issues like greenhouse gas regulation. At issue is California’s stringent limits on vehicle carbon pollution, which exceed federal mandates. Automotive industry leaders have long urged clarity on state-level regulations, noting that uncertainty and instability limits businesses’ ability to make strategic investment and manufacturing decisions.
Indian Market Disruptions: Indian’s automotive market is expanding at a time of major disruption in the energy, electrification and mobile technology industries. Participants noted that continued growth in the consumer vehicle sector requires better regulation of congestion, traffic and parking in Indian cities. In addition, as India transitions to more stringent emissions norms, many consumers are postponing their vehicle purchases and seeking autos that will meet the new standard. (Note: India will formally transition to the Bharat Stage VI emission standard for all light-duty vehicles, heavy-duty vehicles, two-wheelers and three-wheelers in April 2020.) Amid these challenges, ride-sharing companies are increasing their market share and lowering costs by switching to electric vehicles. The overall higher cost to purchase EVs is mitigated for drivers in the ride-sharing market, given that these drivers typically use their vehicles more frequently than most vehicle owners and can recoup the costs more quickly through lower fuel prices. These trends all contribute to an uncertain future long-term for India’s personal auto market.
Autonomous Cars and Electric Vehicles: In the U.S., technology innovation has made self-driving technology increasingly sophisticated. Still, the autonomous vehicle industry faces challenges due to a stream of regulatory requirements that complicate the process of bringing a fully automated car to market. So far, Waymo, Aptiv and General Motors are industry leaders with regards to full automation. In India, the government has cited electric vehicle (EV) adoption as a key to lowering emissions and meeting development goals. Despite this goal, the inclusion of a five percent duty on EVs and EV components in the 2020-21 Budget is likely – if enacted – to raise the cost of EV manufacturing. This additional cost would make EVs more expensive for consumers, working against the government’s desire to orient the automotive industry towards more environmentally friendly vehicles.
The Way Forward: The automotive industry plays a critical role in driving economic growth and job creation across both India and the United States. With both countries likely to be leaders in the sector, participants agreed on the need for clearer regulation, logistics standards and policies that support growth and innovation in the sector. A future trade agreement between the countries could facilitate increased foreign direct investment (FDI) into India’s automotive industry, supporting both traditional auto manufacturers and easing the transition towards technology-enabled and lower emissions vehicles.
For more information about USIBC’s work in the automotive sector, please contact Jasjit Singh.
As part of the International Privacy Forum, the U.S. India Business Council organized a data privacy roundtable on November 15 with U.S., Japanese and Indian government officials to discuss India’s draft Personal Data Protection Bill (PDPB). The discussion, which focused on the effective creation of an Indian data protection authority, included U.S. Federal Trade Commission (FTC) Commissioner Christine Wilson, officials from the Japanese Personal Information Protection Commission (PIPC), Indian representatives from the Ministry of Electronics and Information Technology (MeitY) and the National Cyber Security Centre (NCCC), and a range of industry leaders.
The session coincided with the Indian Parliament’s decision to list the PDPB for introduction and debate in the current winter session – extremely timely and pertinent deliberations. International regulators offered insights and experience around best practices and pitfalls in privacy regulation, including the recent Japanese experience in creating new data protection authorities (DPAs), as well as building trust both between consumers and the government, and among international privacy regulators.
On July 23, the U.S.-India Business Council and Mahindra partnered on the Mumbai BIGathon, a launch event for the Lawrence Berkeley National Lab’s Building Innovation Guide (BIG). The Guide is the result of a unique bilateral effort between the United States and India, and focuses on the design, construction, and operations of smart, energy-efficient, high-performance buildings in the climate zones of India. The event brought together over 65 speakers & delegates, including high level Indian officials, civil society leaders, and executives from across industry – including infrastructure, finance, architecture, sustainability, energy efficiency, real estate and asset management – to discuss how to “decarbonize, digitize and democratize” next generation buildings and the smart infrastructure ecosystem. This blog post presents key takeaways and issues addressed during the day-long conference.
Indian leaders are focused on transforming the country into a $5 trillion economy by 2025. Over that time, India is also projected to become the world’s third largest consumer market. Longer term, urbanization in the next two decades will bring over a hundred million Indians from rural areas into cities, straining already overcrowded infrastructure in the transportation, telecommunications, energy, water, waste, and building sectors. Growth at this scale will require significant investment into next-generation infrastructure – buildings that are “smart” (configured to allow automatic control of building operations), sustainable, secure and safe.
The Government of India (GOI) cannot do this alone: Developing future-oriented infrastructure will require strong public private partnerships (PPPs), adoption of cutting-edge building techniques, and digitally-enabled collaboration between regulatory agencies and service providers. To mobilize private sector investment, the GOI will also need to identify innovative mechanisms for financing large-scale sustainable infrastructure projects.
In a global trade environment where a city’s quality of life increasingly determines its competitiveness, there is no time for India to wait. Smart choices on infrastructure can help Indian cities cut air pollution, reduce traffic congestion, improve energy efficiency, increase energy production, strengthen disaster resilience – all markers of a city’s ‘liveability.’ Technology can also help balance the need to develop new infrastructure while maintaining and integrating older buildings into a smart infrastructure ecosystem.
These recommendations are focused on improving livability for people in India’s cities and the sustainability of India’s existing and future infrastructure. These are areas that should be a priority for the Government of India as it seeks to engage on the world stage to bring best practices and increased FDI into India’s infrastructure sector.
Develop and use distributed renewables, including the range of systems designed to generate renewable electricity for direct consumption or to feed into the grid. New technologies include rooftop photovoltaic power stations, battery energy storage systems, and building-integrated photovoltaic systems. Prioritize energy efficiency, and recognize energy efficiency as a component of infrastructure. For example, smart LED lighting provides a step change improvement in efficiency and performance from existing lighting technologies. The latest generation LED bulbs use 50-80% less energy, can last up to six times longer and provide better and more controllable lighting. Similarly, energy efficient HVAC retrofits for commercial and public buildings are relatively simple to implement and provide proven benefits. Energy efficient systems can typically be adopted in office buildings, retail offices and warehouses, shops, industrial units, hospitals, schools and universities.
Adopt a waste treatment process that converts organic material such as food or garden waste into biogas and biofertilizers. Biogas can be fed into the grid or burned on-site to produce electricity or other types of energy, while biofertilizers can be used in agricultural production. This minimizes waste and maximizes the efficient use of resources.
Convert India’s public transportation fleet and light commercial vehicles to low carbon alternatives. This helps reduce air pollution in cities and cuts operating costs for both government and the private sector. Current forms of transportation are a major source of greenhouse gas emissions, so given deteriorating urban air quality this transition should be a priority for the Modi administration. The Government of India can also designate low emission zones (LEZs), where access by some polluting vehicles is restricted or deterred.
Increase the use of electric vehicles (EVs), which can help cities deliver air quality improvements by limiting or eliminating tailpipe emissions. In some cities establishing LEZs will encourage this transition.
Create a public Electric Vehicle Supply Equipment (EVSE, “charging station”) system, with built-in battery storage technology rechargeable via the grid or solar. During peak times, this technology could reduce demand on the grid for electricity by serving as a distributed energy resource (DER), or even feed power back into the grid. It would also improve power quality, forecasting and scheduling. While the rising prevalence of EVs presents a new infrastructure challenge for cities, a network of charging points with standardized charging protocol and plugs would limit these issues and maximize the benefits of electric-based transportation.
Adopt and integrate digital infrastructure for new and retrofitted buildings. Weather, usage and performance data can be integrated with a building’s controls systems to optimise demand in real time, balance complementary needs and enhance energy efficiency. In the long term, changes to energy demand patterns can inform city planning and investment decisions around energy production, water, waste management and network infrastructure.
Highlight the convergence between the benefits of sustainable infrastructure and other social benefits, as well as the United Nations’ Sustainable Development Goals. (SDGs). Cities should also invest in building human capital and capabilities around smart infrastructure.
Shift from an incremental to a more structural approach to sustainable infrastructure. Current efforts tend to be fragmented and unstructured, and require coordination by too many GOI agencies and departments. This inhibits planning, execution and compliance certification efforts.
Link sustainable infrastructure to reduced macroeconomic risk for industry and investors. Government can help develop incentives that will generate the market signals needed to prompt a shift towards next-generation infrastructure within institutions
Develop government incentives for developers to comply with sustainability, water, waste management and energy efficiency targets as buildings are designed and constructed. This will promote the adoption of effective energy efficient and sustainable infrastructure incorporating technology backed by proven data. The GOI can also help develop incentives that will generate the market signals needed to prompt a shift towards next-generation infrastructure within institutions.
The Government of India has gotten serious about mandated Corporate Social Responsibility (CSR) by corporates. After floating regulatory changes in November 2018, India’s upper house passed a bill last week that cemented major amendments to the CSR framework. While the level of required contributions – 2% of average net profits – remains the same, the revision introduced significant new penalties for both companies and executives who fail to meet this target.
Previously, companies that missed the 2% threshold were simply required to disclose the reasons for their non-compliance in the annual directors’ report. The lack of any real penalties limited compliance, which five years after the law’s passage still hovers around 60% for Indian companies. It also frustrated GOI officials like Finance Minister Nirmala Sitharaman, who saw the law as facilitating companies seeking to “give an explanation and get away with [spending less than 2%].”
The revised law now mandates fines for both companies and executives who fail to meet both the 2% threshold and subsequent spending requirements, although the severity of the penalty – INR 50,000 ($725) to INR 2.5 million ($36,250) – could vary significantly. More concerning for Indian corporates is the specter of jail terms of up to three years.
These more stringent penalties attracted the notice of industry, and have already generated some pushback, including a representation to the government from the Confederation for Indian Industry (CII). The rules are most likely to create challenges for small and medium enterprises (SMEs), who typically lack the CSR-focused staff or structures that support efficient distribution of social impact funds.
But for most large companies – 2/3 of whom already meet the 2% threshold, with many more committed to using the funds within a year – the revised law should require only tweaks to existing CSR practices. The new law allows companies to roll over funds, as long as those funds are used within three years for ongoing CSR projects. Alternately, companies with no ongoing CSR projects at the end of a fiscal year can transfer unspent money to funds set up by the central government. These provisions make the law’s “bite” far less significant.
Ultimately, the new law is strongest as a signal of the Government of India’s focus on CSR and the role it expects the private sector to play. While it will undoubtedly accelerate a move towards compliance by some companies, it’s not clear whether it will have a broader impact on the private sector’s approach to engaging India’s social issues. Will it accelerate giving? Or simply convince companies to spend extra time and energy focused solely on legal compliance?
For more detailed information on revisions to the Companies Act 2019 and India’s CSR framework, read the latest analysis by Khaitan and Co: https://www.lexology.com/library/detail.aspx?g=78ea6b60-2ca3-4400-9b0e-42eb7792112e
The U.S.-India Business Council works with both a select group of non-profit organizations and the corporate partners who support and fund impactful programs across India. We help our members connect to develop new initiatives and funding sources, and use USIBC events and social media platforms to highlight members’ CSR-focused work. For more information about USIBC’s work on CSR, please contact Carolyn Posner.
On July 30, the U.S.-India Business Council team was in Denver, Colorado for a series of business focused engagements. We kicked off the morning with an invitation-only breakfast at the SIDO Best Practices and Training Forum, headlined by Ambassador of India to the United States Harsh Shringla, USIBC President Nisha Biswal, and Wipro VP of Government and Public Affairs Kapil Sharma. The breakfast, moderated by SIDO President and MD of the Maryland Office of International Investment and Trade, drew representatives from 45 U.S. state development offices for a discussion on strengthening trade and investment with India.
Discussion focused on three key points:
Ambassador Shringla encouraged U.S. companies considering investments in India to participate in delegation trips or establish a permanent presence in India to get an on-the-ground perspective and develop a network of local partners, associations and government leaders. He noted that 14 U.S. states and counties have permanent representatives/offices across India. Participants also heard about the US.-India State Spotlight Webinar Series, a joint webinar series by the U.S. and Indian governments designed to teach companies more about the investment environment.
USIBC partnered with the Colorado Office of Economic Development and International Trade to host the first Colorado-India Business Roundtable. The event featured remarks by Governor of Colorado Jared Polis and Indian Ambassador to the United States Harsh Shringla. Participants at event, hosted by Amazon at the company’s offices in Denver, included Dr. Anupam Ray, Consul General of India in Houston, senior officials from of the Houston Consulate and Indian Embassy, and over 40 senior business leaders from U.S. and Indian companies. Discussion touched on sectors like cybersecurity, energy, aerospace and defense, mobile accessories, and financial services, and as well as how Colorado companies can access business development opportunities in India.
For more information on the Colorado Delegation to India in November, please contact Laura Blomquist, Senior Manager, OEDIT. For more information on the U.S.-India Business Council’s city and state engagement work, please contact Sid Mehra, USIBC Head of States Engagement.
On July 8 and 9, 2019, the Atlantic Council Global Energy Center hosted the 13th Meeting of the International Energy Agency’s Gas & Oil Technology Collaboration Program Executive Committee, bringing together energy policy experts from across the world. The first panel session focused on Indian energy system choices, moderated by International Energy Agency Gas and Oil Technology Collaboration Program president and CEO Jostein Dahl Karlsen. Panelists included Embassy of India economic counsellor Nilkanth Avhad, U.S.-India Business Council senior director for energy, environment, and infrastructure Lauren Diekman, and Society of Petroleum Engineers president Sami Al-Nuaim.
Avhad mentioned that achieving energy growth in India is key to increasing gross domestic product (GDP) per capita in the country. Diekman stressed both that India is projected to account for a quarter of global energy growth for the next two decades and the importance of the mutually beneficial energy cooperation between the United States and India. Al-Nuaim noted that while oil and gas will remain an integral part of the energy mix for a long time, it will be crucial to make these sources cleaner. He also said that increased use of natural gas, more renewables in the power generation, and an increased use of non-combusted oil are all essential in the path towards reducing carbon emissions.
You can read the full overview of the “Addressing Energy System Choices and Responses: The Case of India” panel, as well as a readout of other public sessions held during the 13th Meeting of the International Energy Agency Gas & Oil Technology Collaboration Program Executive Committee, on the Atlantic Council website.
The Summit also featured the 2nd annual USIBC startup pitch competition, designed to connect under-represented entrepreneurs with investment and mentorship.
If you would like to re-watch portions of the event, we have posted video from the main hall of the Summit. You can also watch selected streamed sessions:
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Few cities in the United States can match Los Angeles as a hub for trade and investment partnerships capable of driving forward new growth for the U.S.-India commercial relationship. With nearly 13 million residents across the L.A. Basin and an economy as large as the country of Mexico, L.A. is an exciting and dynamic global city. With the country’s second largest port nearby in the Port of Long Beach and the Port of L.A. as a global modal for sustainability, L.A. is home to a rapidly growing technology and clean energy scene along with a new dawn for advanced manufacturing. In addition to its crown jewel– the media and entertainment industry, which continues to lead the world in content creation, deal-flow and innovation, Los Angeles has showcased a depth of commercial opportunity across sectors.
On April 26, USIBC President Nisha Biswal traveled to L.A. for a series of engagements that highlighted the breadth of area’s dynamic business scene. Along with Indian Ambassador to the United States Harsh Vardan Shringla and Counsel General of San Francisco Sanjay Panda, Biswal met with AECOM Chief Operating Officer Randy Wotring and Executive Vice President and General Counsel Carla Christofferson; Paramount TV President Nicole Clemons along with her executive team; leaders from new USIBC member RSM, and Mayor Eric Garcetti, who has shown tremendous vision in positioning Los Angeles to thrive amid changing models of business in the 21st century.
USIBC also hosted a cocktail reception at historic RedBird in honor of Ambassador Shringla. USIBC members and industry thought leaders joined together for a conversation on India’s technology, trade and investment landscape amid contentious national elections.
The event highlighted several key themes:
As part of the U.S. Chamber of Commerce, USIBC focused this trip on driving two-way business, investment, and people-to-people ties between Los Angeles and India. Looking more broadly, we see the West Coast as a leader for growing the economic power of partnership between cities and states. To reach the goal of $500 billion in trade between the U.S. and India, both countries must support more active engagement between our innovation hubs, manufacturing centers, and creative capitals. On June 12-13, USIBC will explore the power of connecting cities and states at our 2019 India Ideas Summit & Annual Meeting. The Summit will bring together in leaders across industry, government and society for two days of conversations on topics like the future of work, artificial intelligence, sustainable supply chains, last mile financial connectivity, the Indo-U.S. strategic partnership, new healthcare models and more.
The U.S. Chamber of Commerce’s U.S. India Business Council (USIBC) and humble ventures are partnering to launch a pitch competition to highlight diverse entrepreneurs and connect them with potential mentors and funders.
Entrepreneurs invited to the semi-final round will present their pitches to leaders from entrepreneurship incubators, accelerators, and VCs on June 11. The top 5 will move on to a live pitch round at the India Ideas Summit on June 13 — presenting to executives from several hundred executives from tech, e-commerce, finance, healthcare, and a variety of other industries.
• Diverse founders who own or co-own early-stage startups; Business teams must have a minimum of two members, with at least one team member available to present at our semi-final (early June) and final (June 13) rounds.
• Early-stage startups: Startups registered after January 2015
• Demonstrated engagement with a paying customer base and some level of market traction
• Demonstrated plan for expanding/scaling operations
BEFORE YOU SUBMIT! We encourage you to read more about the competition here: https://bit.ly/2JQkhYS
Applications will be accepted until 11:59 PM EST on May 16, 2019. If you have technical difficulties submitting your application, please reach out to Carolyn Posner at email@example.com.
SUBMIT YOUR PITCH HERE!: https://goo.gl/forms/gwC9aq4seXc2e0ft2