The glass of business relations between the United States and India is less than half full. New Delhi is of the opinion that business ties have made significant strides and could make more if U.S. barriers to trade and technology transfers are properly looked at and tickled, whereas Washington believes U.S.-India business relations lag far behind because of the slow pace of economic reforms.

With this background, here is a review of the perception of India and the USA about business relations.

India facts

India is the largest democracy in the world. It has a potential of a $300 million middle-class market. It is the fifth largest GDP globally on purchasing power parity basis in the world. FDI approvals exceed US $47.7 billion and the USA accounts for the largest share of 26 percent.

It has a domestic savings of 24 percent. India also has the largest skilled work force and hence, having the second largest pool of scientists.

Information Technology and software exports are growing exponentially as are India's core competencies. The second largest producer of rice, wheat, groundnut and the largest producer of tea, butter, ghee, sugar, milk and two-wheelers. The country also processes the second largest number of coal reserves

USA facts

The USA has a diverse geographical splendor of forests, deserts, mountains, high flat lands and fertile plains. The fourth largest country in the world with 48 contiguous states, located in the central portion of North America, plus the states at Alaska and Hawaii with a population of 267 million. The USA has the largest GDP in the world on PPP basis. World No. 1 in imports of goods and services as a percent of GDP, conducive government policies, financial markets, infrastructure, science and technology and management. With less than 5 percent of the world's population, the United States in the early 2002 produced about 25 percent of the world's output. By conventional measures, the U.S. productivity and standard of living remain among the highest in the world.

Why strengthen

business ties?

Contextual realities demand that India should make a constructive reappraisal of its relations with the United States. These grassroot realities are:

It is each country for itself in the United Nations, without any sense of solidarity, identity or even common ground. Concepts such as capitalism, socialism, non-alignment, anti-colonialism and racism have become outdated. It is time for India to emerge from the hangovers of the complexes and reflexes of the days of Jawaharlal Nehru and Krishna Menon. Of course, regional groupings and trade pacts are seeking to establish a united front, but these again are willy-nilly driven by internal pulls in directions dictated by not-always-enlightened self-interest.

The United States is a country that has been India's largest trading partner. This help in terms of food grains and financial aid has also been unequaled and unstinting at the most critical times. India and the United States are two of the world's biggest democracies, sharing many values and attributes of an open society. The United States is a treasure house of new techniques, technologies and best practices. It certainly occupies a position of leadership and influence that cannot be matched by any other country of the world. Most of all, it is easy to deal with it on the basis of friendship and mutual trust, as both its government and its people are receptive to new ideas and approaches.

India's national interest demands developing the needed maturity and self-assurance for forging partnership with a strong ally in promoting its own commercial, trade and business interests. Economic relations and technological prowess are increasingly going to become the sheet-anchor of a solid, viable foreign policy framework, of which the centerpiece, like it or not, will have to be the United States. After all, for more than 50 years after independence, India went all out to kowtow to the Soviet Union in its perceived national interest. The justification for partnership with the United States is much greater in nature, size and need.

Indeed, the India-US synergy and convergence on the world stage can work and bring wonders. Once a beginning is made, both countries would realize how fruitful it is to get along with each other in a spirit of mutual cooperation and support which is the need of the day.

Quick improvement

U.S. Sen. Sam Brownback has called for a free trade agreement between India and the United States, even as he warned that a part of the foreign direct investment flowing into China might end up in modernizing its military and threatening global security. And as a result, India is the best destination for U.S. FDI.

Saying economic cooperation between India and United States "must improve and improve quickly," he said China continues to attract foreign direct investment several times more than India. "China continues with its reforms programmed. It is also further opening up its economy."

Since 1980, China has attracted FDI of about $386 billion, while India has attracted only $18 billion. And in 2000-01, the trade between China and the United States stood at $116 billion, while bilateral trade between India and America was a meager $14.4 billion.

Brownback stressed the need for more FDI into India, but said that to get Americans to invest in India, the government needs to quicken the pace of reforms, remove high tariffs and do away with other impediments.

He said the reforms process would benefit the Indian economy, create more jobs and help alleviate poverty, and also to garner more FDI. "But if the impediments remain, Americans will find other markets to invest in," and then can India afford it?

He gave a three-point suggestion for improving the Indian economy and attracting more investment from the United States.

Make more reforms to engage the global economy. Go out and bring trade investment. Start discussions of a free-trade agreement between India and the United States to jump-start bilateral economic relations.

Brownback, after whom the 1999 amendment to withdraw sanctions against India was named, said the United States continues to put pressure on Pakistan over abetting terrorism. He said he personally called up Pakistan President Pervez Musharraf asking to him put an end to cross-border terrorism.

The United States has "no better partner" than India in its fight against terrorism, he said. America's focus on Iraq is part of a "sequentially" planned U.S. war on terrorism, he added.

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