x Abu Dhabi, UAESaturday 22 July 2017

US-India trade ties improving but could be better, Clinton says

Mrs Clinton said two-way trade and investment has grown 40 per cent since 2009 and is set to exceed $100 billion this year, but there is "a lot of room for further growth".

Indian Minister of External Affairs S.M. Krishna with US secretary of state Hillary Clinton on June 13. They were seeking to boost relations that have blossomed in recent years but have yet to meet US hopes for greater market access for American companies.
Indian Minister of External Affairs S.M. Krishna with US secretary of state Hillary Clinton on June 13. They were seeking to boost relations that have blossomed in recent years but have yet to meet US hopes for greater market access for American companies.

WASHINGTON // The US secretary of state Hillary Clinton has welcomed progress in US efforts to invest in India's civilian nuclear power industry.

But she said more action was needed to translate improving ties into economic benefits.

The two governments held their annual strategic dialogue in Washington on Wednesday. They were seeking to boost relations that have blossomed in recent years but have yet to meet US hopes for greater market access for American companies.

"It's not enough just to talk about cooperation on issues ranging from civil nuclear energy, attracting US investment to India or defending human rights or promoting women's empowerment," said Mrs Clinton, speaking beside India's foreign minister, S M Krishna.

"We have to follow through so that our people, citizens of two, great pluralistic democracies, can see and feel the benefits," she said.

Mr Krishna said India plans to invest US$1 trillion (Dh3.7tn) in infrastructure development over the coming five years, offering enormous business opportunities for US companies. He offered assurances to prospective investors that there will be "a level playing field and total transparency."

Two years ago, Barack Obama, the US president, declared that the US-India relationship would be a defining partnership of the 21st century.

Security cooperation and defence sales have grown rapidly, and Washington looks to New Delhi as a partner in the economic development of Afghanistan. But some analysts say the relationship is being oversold.

Mrs Clinton said two-way trade and investment has grown 40 per cent since 2009 and is set to exceed $100 billion this year, but there is "a lot of room for further growth".

The two sides agreed this week to expedite negotiations on a bilateral investment treaty to reduce barriers.

Mrs Clinton welcomed the signing, announced Wednesday, of an agreement between Westinghouse Electric and the Nuclear Power Company of India allowing preliminary site development for construction of nuclear power plants in western India.

Mrs Clinton said it was a significant step towards the fulfilment of a 2008 India-US civil nuclear agreement. That pact, negotiated by the administration of the former US president George W Bush, allowed India access to technology from international suppliers it had been denied since it conducted its first nuclear test explosion in 1974.

Mr Krishna said it should "put at rest" confusion surrounding the agreement.

"I'm glad that nuclear commerce is now beginning to expand," he said, expressing hopes that more Indian and US companies would become involved in the months ahead.

Mrs Clinton said she looked forward to additional deals with other American companies, including General Electric. But she said there was still a lot of work to be done to address the implications of Indian nuclear liability legislation that effectively has blocked US suppliers from capitalising on the agreement.

Scott Shaw, a spokesman for Westinghouse, said that those issues will need to be addressed before signing any final agreements.

The Obama administration has invested considerable diplomatic capital in pushing ties with India.

But New Delhi has struggled to deliver on the kinds of economic changes that Washington wants. In November, prime minister Manmohan Singh's government backtracked on plans to allow foreign investment by such companies as Wal-Mart in its supermarket retail sector after domestic opposition.

Another area of intense commercial interest to the US is India's defence sector, with sales exceeding $8bn in the past five years, reflecting growing ties between the two militaries. Mrs Clinton said the US was convinced that in the future, it can conduct with India joint research, development and co-production of defence systems.

One obstacle to improving ties was lifted ahead of the Washington session when the United States on Monday dropped the threat of penalties against India for its large yet declining oil imports from Iran.

That is one of various diplomatic issues on which the US and India have not always seen eye to eye, despite their shared strategic interests in areas such as fighting Islamic militancy and managing the rise of China.