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Monday, January 18, 2021

With Biden at helm, Delhi and Washington can enhance economic, commercial ties

The Biden administration’s tone of engagement may be different from that of the Trump regime, but one must expect continuity in major trade goals

New Delhi | Updated: January 6, 2021 6:21:44 pm
Domestically in the US, and in India, healthcare and job creation need to be priorities. (File)

Written by Arun Kumar

When Joe Biden takes the oath of office as the US’s 46th president later this month, he would be taking charge of a nation embroiled in a health crisis, economic crisis and race crisis. The priorities induced by these crises will dictate that the new administration’s initial focus be on domestic matters. Foreign policy will have to play second fiddle, and this could inform the Biden administration’s stance on India in the economic and commercial domain.

A major geopolitical reality that will shape the Biden administration’s approach to India will be its position towards China. There is a bipartisan change in the US’s attitude to China. The Biden administration’s tone of engagement may be different from that of the Trump regime, but one must expect continuity in major trade goals — reducing the trade deficit, ensuring a level-playing field, reducing market distortions created by the dominance of state-owned enterprises and keeping a keen eye on technology rivalry.

One can thus see immediate parallels in the concerns of the two countries — invigorating the domestic economy and dealing with a rising rival. These concerns can translate into opportunities for both countries.

Domestically in the US, and in India, healthcare and job creation need to be priorities. Healthcare is clearly an area that India can play up in bilateral relations, with its vaccine and pharma manufacturing capacity. The COVID-19 pandemic offers significant opportunities for the new administration to strengthen global health leadership. The two countries can also work with multilateral agencies across the spectrum of vaccine development, logistics and distribution.

India produces around 20 per cent of the global requirement for generic drugs by volume and every third tablet of generics consumed in the US. The President-elect has indicated his commitment to providing better and affordable healthcare. This could be an opportunity for the Indian pharma sector to play a role in reducing health costs of the American consumer. And, India can benefit from advancements in medical technologies, devices, new medicines and R&D capabilities, presenting opportunities for American companies.

Trade and exports are critical for the expansion of job creation. Biden has set an ambitious target for US-India trade and there’s quite a distance to go in this respect. Some sectors could be natural focus areas. Businesses in both countries are also aligned to diversify their manufacturing supply chains. This portends well for the creation of employment in manufacturing. An area where strategic considerations and imperatives of job creation converge is defence, especially since India has been designated a Major Defence Partner of the US.

Infrastructure will need to become an increased area of focus in both countries. For the US, this can mean opportunities in India in transportation, power and other urban amenities. The US’s renewed focus on climate change should lead to greater cooperation with India in energy-related areas, from more efficient energy dissemination and management (such as smart grids) to renewable energy technologies. There is potential to enhance mutual opportunities in the 5G tech sector. Increased partnership between the two nations can accelerate the development of technology solutions, promote vendors in the 5G open ecosystem and drive economic growth. The two countries should engage in shaping the rules of a new order in this space. This also has an important strategic element related to infrastructure and connectivity, when seen in the light of developments in the Indo-Pacific as well as China’s Belt and Road Initiative.

We should expect a return to multilateralism once the Biden administration assumes office. The Trans-Pacific Partnership aimed to create a rules-based order that all parties could subscribe to. With the ascendancy of the Indo-Pacific paradigm and the Quad and Quad Plus, a successor to the TPP could include a wider canvas. For India, this could mean cooperation beyond defence and security, including economics, technology and developments pertaining to the regional order.

Finally, I would hope that the economic and commercial dimension is treated with as much priority as the strategic dimension. Both governments should embrace the prosperity-creating potential of such an approach.

This article first appeared in the print edition on January 5, 2021 under the title ‘A wider canvas for India-US’. The writer is chairman & CEO of KPMG in India. He was formerly Assistant Secretary of Commerce for Global Markets in the administration of President Barack Obama. Views are personal

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