Context: 

India and America need each other more than ever before today, both are united by powerful mutual interests.

India’s Statistics:

• Growth & GDP: India is estimated to reach $25 trillion by 2047 (according to Pricewaterhouse Coopers), 100 years after Independence.
  • In 1700, India accounted for over 35% of global GDP, making it the world’s biggest, and by the time of the economic crisis in 1991, it was down to almost 1%. 
  • Today, it is at around 4%-5% and rising. 
  • The United States needs this market desperately, and India needs America’s capital and its technology — military and non-military, both.
• Population: By 2030, India will have a working population of one billion, which is more than the entire G-8 population.
• Internet Coverage & Consumption: Today, India has very vast Internet coverage. 
  • India’s per capita mobile data consumption is ranked at one, more than that of the U.S. and China combined.

Trade and Economic Relations: 

• The U.S. has emerged as India’s biggest trading partner in 2022-23.
  • The bilateral trade between India and the U.S. has increased by 7.65% to USD 128.55 in 2022-23 as against USD 119.5 billion in 2021-22.
  • Exports to the U.S. rose by 2.81% to USD 78.31 billion in 2022-23 as against USD 76.18 billion in 2021-22, while imports grew by about 16% to USD 50.24 billion.
• Multilateral Engagements: India and the US collaborate closely at various multilateral organizations, including the United Nations, G20, ASEAN, IMF, WTO, World Bank, Quad, and ISA. 

Challenges between India-US Ties:

• Tariff Imposition: Earlier the US imposed tariffs on Indian products and India retaliated back by increasing tariffs on the US imports.
• Self-Reliance vs. Protectionism: The Atmanirbhar Bharat Campaign presented that India is increasingly becoming a protectionist closed market economy, while it’s a step towards self-reliance.
• Exemption from US’ Generalised System of Preferences (GSP): GSP is the largest and oldest US trade preference programme which was designed to promote economic development by allowing duty-free entry of products from the designated beneficiary countries (developing countries).
  • In June 2019, the US decided to withdraw Indian exporters under the GSP programme, affecting India’s export-oriented sectors such as pharmaceuticals, textiles, agricultural products and automotive parts.
• US’ Issues with Other Countries: Some differences are not direct between India and the US, but are due to third countries like Iran and Russia.
  • Example: US used sanctions on the countries purchasing S-400 from Russia.

What does India need to do?

It’s time to work upon the following points to get advantage in this World Scenario and upgrade for self-betterment:

• Greater Digitalisation of Internal Processes
• Better Services Delivery using India Stack
• Revive stalled Agriculture Reforms
• Build up Supply Chain Capability 
• Move Manufacturing to India as Companies Look for Other Homes outside China
• Carry out Deeper Judicial Reforms

Conclusion:

Experts believe that India and the U.S. are friends, but not allies and this is the time where the journey from friendship to ally is a short one and needs to be walked by both sides as both mutually need each other.

News Source: The Hindu