Ladies and Gentlemen, I am delighted to be here amidst such a distinguished gathering of business leaders representing the entire gamut of our trade and economic relationship between our two countries. India and the US are natural allies and partners in progress. We are democratic countries, USA being the oldest democracy and India being the largest democracy with shared values such as respect for human rights, rule of law, a free and independent press and media, a strong civil society, separation of the powers between legislature, executive and judiciary and strong and independent institutions.
2. India, with its economy of nearly $2.6 trillion is one of the fastest growing economies in the world and ranked as a top investment destination. The Indian economy has been registering high rates of growth- well over 7%- in the past few years making it the fastest growing large economy of the world. With 100% FDI allowed in over 90% of sectors coupled with economic initiatives such as Bankruptcy Law, launch of Commercial Courts, launch of one-stop Government e-Marketplace portal we expect greater interest by investors in India. The Prime Minister of India has reiterated in all his interactions that the government has rolled out the red carpet and is removing red tape.
3. A large number of reforms have been initiated in India to make India business friendly. The efforts made by the Government of India have been acknowledged and on the World Bank ‘Ease of doing business’ report, India jumped from 100 in 2017 to 77 in 2018. The Goods and Services Tax (GST) is one such step aimed at the economic integration of the country which has started to yield positive results. Several major initiatives of the Indian government, such as Make in India, Start-up India, and Digital India, are aimed at infusion of technology in the process of development. All these initiatives need the strong backing of a robust IPR system and the government is committed to strengthening of the Intellectual Property (IP) eco-system in India. India’s IPR policy launched in May 2016 focuses on generating awareness and evolving a strong legal IP framework thereby encouraging innovation and creating an investor and business friendly environment in the country.
4. Infrastructure sector is a key driver for any economy and the Government has been following policies that ensure time-bound creation of world class infrastructure in the country. In the area of infrastructure development, considerable work is underway in roads, rails and aviation sectors. Several cities are being provided air connectivity. The first high speed rail project is coming up between Ahmedabad and Mumbai and 400 railway stations are being modernized. Ports and airports are also being modernized to cater to higher traffic. Projects such as Bharatmala and Sagarmala are being launched which will address the infrastructural weaknesses of the country. The Bharatmala project involves creation of 83,677 km (51,994 miles) of highways to cover large parts of India with special emphasis on providing connections to far-flung border and rural areas. The Sagarmala project entails setting up of new mega ports, modernization of India's existing ports, development of 14 Coastal Employment Zones and Coastal Employment Units. It is estimated that India will require over $1.5 Trillion into the infrastructure sector over the next 10 years and this offers a potential for investors in India. Over 1 billion people have been issued Aadhar, a unique biometric identity. This reflects the enormous scale of opportunities being created for businesses.
5. India is a young country and the median age will be 28.2 years in 2020. Education and adaptation of new age information skills and values will be key drivers of sustainable development. This is part of a striking trend. Indians are an increasing powerful presence online. We have close to 460 million internet users and more than 1 billion mobile phone connections and these numbers are increasing by the day. Even with an Internet penetration rate of less than 30 percent, India is the largest market for WhatsApp and its parent company, Facebook. It ranks third by users on Instagram and fourth on Twitter, according to eMarketer, a research firm. Four of Tinder’s top 10 cities by paying users are in India. And 1 in 10 Uber rides globally occurs in India, a proportion that is set to grow. Tech leaders look at these statistics with cartoon dollar signs on their eyes. Morgan Stanley expects smartphone penetration to more than double between 2017 and 2020. Mobile Internet connections grew from 346 million in late 2016 to 491 million by the end of 2018, according to India’s telecom regulator. In the same period, monthly data consumption jumped by a factor of more than 13, to 3.2 gigabytes per user.
6. On the energy front, improving access to electricity and enhancing grid efficiency is being actively pursued. We have set an ambitious target of adding 175 GW of renewable energy, including 100 GW of solar capacity by 2022. Efficiency of power consumption is being increased by large scale conversion of lighting bulbs to LED and as of 10 march 2019, 3.4 Billion LED bulbs have been distributed in India and the target is that all bulbs in India will be LED. We have also committed under our INDCs to achieve 40% of cumulative electric power installed capacity from non-fossil fuel based resources by 2030.
7. The India-US relationship has evolved into a truly comprehensive partnership of mutual trust and confidence. Visits by Prime Minister Modi in June 2016 and June 2017 highlighted the huge bipartisan support for this relationship. He received an overwhelming welcome from the US Congress and the business community. In his meeting with President Trump both leaders spoke about convergence in values, priorities, concerns, and interests. Both leaders committed to further expand the trade relationship with focus on job creation and to develop an understanding of each other’s priorities. Government of India is committed to building on this relationship with the US. There is a convergence of views of the two countries not only on international issues but also in the economic vision.
8. The most recent political level engagement at the bilateral Commercial Dialogue held in Delhi on 14 February also took note that Annual bilateral trade in goods and services between the United States and India more than doubled over the last decade, from $58 billion in 2007 to $126 billion in 2017. Both sides resolved to remain engaged and take measures for further enhancement of bilateral trade. The sides agreed to continue to find ways to improve bilateral trade and increase market access in our countries as was agreed upon in the United States and India: Prosperity Through Partnership joint statement of June 2017 and the Commercial Dialogue Joint Statement of October 2017.
9. Trade and commercial ties between the two countries are strong. Two-way trade has grown exponentially and was worth $126 billion in goods and services in 2017. In 2018, it is expected to cross $140 Billion more than 11% increase over 2017. Total bilateral merchandise trade in 2018 was more than $87.5 Billion. US exports to India in 2018 have grown at nearly 30% to over $33 Billion while Indian exports have grown at about 12% to over $54 Billion. This growth has ensured that bilateral trade deficit has reduced by over 7% in 2018 alone.
10. Our bilateral defence relations have grown manifold and we are happy that India has been designated as a Major Defence Partner of the US. The inclusion of India in the License Exception Strategic Trade Authorization (STA-1) will further give a fillip to the defence trade between the two countries and integrate India into the international supply chains. High level engagement like the 2+2 dialogue has once again thrown focus on the importance that both sides attach to the relationship. It has brought into light the shared commitment to a forward-looking vision for the India-US strategic partnership which is putting our relations on an upward trajectory.
11. Our people to people relations form the bedrock of our bilateral relations. The presence of a large and vibrant Indian American community is a bonding factor between the two countries. More than 227,000 Indian students are studying in the US who contribute over $6.5 billion to the US education system each year. Tourism plays a big role in enhancing people to people contacts. United States has continued to be among the largest tourist generating market for India during the last few years with over 1.3 million tourists visiting India in 2017. A similar number of Indian nationals also visited the US. India is the sixth largest market for international visitor spending in the United States. Both countries look forward to further enhancing potential of the sector to support economic growth, create jobs, and foster closer relationships between our people.
12. During the visit of the Prime Minister of India to DC in June 2017, a roundtable with CEOs of American companies across various sectors including IT, Retail, Infrastructure, Financial Services, Pharma, etc was held. The participating CEOs applauded India’s reform initiatives and expressed their keenness to further strengthen their collaboration with India. I wish to further reiterate the message by inviting US business to look at India as a destination for their investment and for them to forge mutually beneficial relations with Indian business.
13. As vibrant democracies, India and the US share many common values and aspirations. As you can imagine, in a democratic society, it is not always easy to implement far reaching reforms. They require consensus building; investment of considerable resources; restructuring and management of upheavals resulting from new policies and systems. You might find things moving slowly at times or encounter certain challenges in the policy environment, however, as many of you may have experienced, the government has an open mind, and is willing to engage with the industry to address their concerns. I would like to assure you that the government is determined to move forward with its reform agenda with the objective of building a modern and efficient economy where businesses feel confident to invest and do business.
14. We recognize the industry on both sides as a valuable partner in our shared objective of promoting bilateral commercial ties, and helping India achieve its development goals. I look forward to hearing about your priorities and challenges, and how we can work together to boost the bilateral economic and commercial relationship for mutual benefit.