University Club of Washington, DC, hosts panel discussion.
WASHINGTON, DC: The economic relations between the United States and India are set to scale greater heights in the coming years, in spite of several impediments, according to a panel of experts who dissected the bilateral economic ties between the two largest democracies in the world.
Richard M. Rossow, Wadhwani Chair in U.S. India Policy Studies at the Center for Strategic and International Studies, Sanjeev Joshipura, founder and president of SJ Consulting, Marcia Wiss, Of Counsel at Hogan Lovells US LLP, and T.D. Sivakumar, chief North America representative of Export-Import Bank of India, also agreed that businesses will continue to play a huge role in driving the bilateral relations.
They were speaking on a panel discussion, titled “Future outlook for the U.S.-India economic partnership,” hosted by the International Committee of the University Club of Washington, DC, on July 14.
“India is shaping up to be the economic success story of 2015,” moderator Rokas Beresniovas, a vice president of Business Development at State Bank of India (California), pointed out. “Its economy is growing faster than China’s, as well as the most of any major economy in the world. It will surpass Russia’s this year in size and nearly equal Brazil’s in 2016, according to new data from the IMF.”
Joshipura, who is also an advisor to iSPIRT, the Indian Software Product Industry Round Table, a think tank and market catalyst, said there is tremendous excitement and activity in India’s technology startup sector, which is often under-appreciated outside India.
“India is home to the 5th largest number of startups in the world, at over 3,100,” he said. “Many of these startups are looking for exits by way of M&As or JVs with larger corporations, especially in the United States. American companies, for their part, are interested in incorporating and integrating startups into their business models, because they want to keep their offerings fresh and relevant to their customer base, which is continuously getting more technologically adept.”
According to Rossow, US immigration, which is “a big issue for the Indian IT service companies,” the two countries need to find a common ground.
“The United States does not want to look at visa issue as a trade issue, we look at it as a homeland security [issue],” he said. “[On the other hand, Indian companies want an increased use of H1 visas, they want an increased use of L1 visas, which are intra-company transfers, and they want reduced fees.”
Joshipura argued that U.S. companies establishing a presence in India need to understand India’s complexity, with its multitude of languages, cultures, attitudes and cuisines.” India is a continent masquerading as a country,” he said.
Export-Import Bank of India’s Sivakumar said India is focused on improving its “The Ease of Doing Business in India” and “Global Competitive Index” rankings. “There is a significant realization that a lot of work has to be done on [improving ranking in the Ease of Doing Business in India ranking]. The present government has taken a lot of initiatives in terms of easing procedures.”
India is ranked 142nd by the World Bank on ease of doing business. The target is to reach within 50 in the next couple of years, Sivakumar said, adding, “There is a clear evidence that things have improved.”
Hogan Lovells’ Wiss said there are many challenges US companies doing business in Indian and Indian firms investing in the United States face.
One of the main challenges for the American companies in India is to get around the centralized nature of decision-making in India, while for Indian businesses in the United States the problem is the opposite, she said.
“The United States is such a huge decentralized country in many ways, with state taxes, state rules and state regulations that have major impact on where an Indian company should be located,” Wiss said. “There are many different concerns that Indian companies doing business in the US have and it requires some sophisticated knowledge to help guide the Indian companies.”