The Biden administration’s report to the US Congress dubbing Modi’s Make in India initiative a challenge for bilateral Indo-US relations is completely uninformed and incorrect. It is, instead, a call for global partnership that US companies are well poised to benefit from, writes India Inc Founder and CEO Manoj Ladwa.
The new Joe Biden administration has got it wrong. It has told the US Congress that the Narendra Modi government’s Make in India “epitomises” the challenges bedevilling bilateral relations.
"While India's large market, economic growth, and progress towards development make it an essential market for many US exporters, a general and consistent trend of trade-restrictive policies has inhibited the potential of the bilateral trade relationship. Recent Indian emphasis on import substitution through a 'Make in India' campaign has epitomised the challenges facing the bilateral trade relationship," the US Trade Representative (USTR) said in its report to Congress.
This is a complete misreading of the Indian Prime Minister’s vision. His ‘Make in India’ initiative is not a return to the failed import substitution of the past. Instead, it’s a call for the world to partner with India.
Addressing the US India Strategic Partnership Forum (USISPF) in September last year, Modi invited US companies to invest in India. “…Along with affordability of geography, companies are now also looking at reliability and policy stability. India is the location that has all of these qualities. As a result, India is also becoming one of the leading destinations of foreign investment… Atmanirbhar Bharat will transform India from a passive market to an active manufacturing hub,” he said.
This call for partnership is particularly important at a time when much of the world, including the US, is thinking of decoupling their economies, at least partially, from China. And remember, despite what some people in the US think, a job to India is not a job lost in the US.
Every tech major in the US depends in large or small measure on Indian talent, both in India and in the US, to maintain its global competitiveness. No less a person than Apple CEO Tim Cook said in an interview to an Indian newspaper last year: “We look at it (India) as an unbelievable source of talent for both our internal operations like R&D…, but also as a developer population with a lot of entrepreneurs who want to develop and create apps they want to offer to the world.”
Ironically, Biden himself acknowledged it. Addressing the NASA team for the success of Perseverance rover, he spoke to Dr Swati Mohan, the guidance and controls operations leader of the mission and said “Indian Americans are taking over the US” – his vice president (Kamala Harris) was (part) Indian American and his speech writer is Indian American. For good measure, Biden has selected at least 20 Indian Americans for various positions in his administration.
Already, major US companies like legacy and new age US companies such as GE, Google, Facebook, Amazon, etc., count India among their biggest markets. Apple has started making its iPhones and other products in India (through its contract manufacturers Foxconn, Pegatron and Wistron) under the Make in India scheme. These phones will be exported all over the world, including, I’m sure, to the US.
Thus, there is no inherent contradiction between closer bilateral relations and Make in India. Far from being a protectionist barrier to US companies (and those from other countries) it is an open invitation to them to set up factories in India, to benefit from India’s economic growth and to supply world class products to their customers across the globe from their Indian manufacturing facilities.
The USTR report is uninformed and incorrect and, I dare say, it is the mindset behind it, and not the Make in India initiative, that really epitomises the challenges faced by the Indo-US bilateral relationship.
At a time when the world is facing a concerted challenge from a rising new hegemon, I hope the Biden administration will avoid protectionism against India.
India is not China. It is not a competitor but a collaborator.