“The consequences of our actions are always so complicated, so diverse, that predicting the future is a very difficult business indeed.”
– Professor Albus Dumbledore, speaking to Harry Potter about the Time-Turner at the end of J K Rowling’s book Harry Potter and the Prisoner of Azkaban
Has Prime Minister Narendra Modi’s agenda of ‘Make in India’ taken a new turn? It may have – if I’m to believe what I hear: that US President Barack Obama has flown off yesterday with a whole lot of deals for American companies during his quick visit to India, while flaunting his own agenda of ‘Made in America’ exports to countries like ours.
Here’s a report from BBC News India which puts President Obama’s visit in a nutshell:
“Mr Obama’s three-day tour has been aimed at boosting economic ties between the two major allies. On Sunday, the first day of his visit, Mr Obama and Indian Prime Minister Narendra Modi announced a breakthrough on a pact that will allow US companies to supply India with civilian nuclear technology.
Analysts say the two governments have done “all they can do” and it is now up to the suppliers – or American firms wanting to sell reactor technology to India – to do business.
At the business event on Monday evening, both he and Mr Modi hailed the bilateral progress, with the Indian leader saying a stronger relationship “will make this world a better place for all”. Mr Obama said trade had grown by around 60% in the past few years which was a “win-win” situation. “We’re moving in the right direction,” he said. “That said, we all know that the US-India economic relationship is also defined by so much untapped potential.””
Another article in The Economic Times states that President Obama has pledged $4 billion to strengthen economic ties with India:
“US President Barack Obama on Monday announced $4 billion of new initiatives aimed at boosting trade and investment ties as well as jobs in India, and opened up a whole new source of financing for social development ventures in the country through a new Indian Diaspora Investment Initiative.
“Let’s make it possible for a young woman in rural India to start a business with a partner in America that will change both their lives,” Obama said, drawing huge applause at the US India Business Summit, where he called for more steps to help Delhi and Washington explore the ‘untapped potential’ of ties.
The $4-billion deals include $2 billion of leveraged financing for renewable energy investments in India through the US Trade & Development Agency and $1 billion in loans for small and medium businesses across India through the Overseas Private Investment Corporation, or OPIC. Separately, the US Export Import Bank would finance a billion dollars to support ‘Made in America’ exports to India over the next two years. Obama also announced that two US trade missions will be in India this year with a specific focus on infrastructure development in rail, roads, ports and airports.
Though US exports to India have grown by 35% since 2010 and support 1.7 lakh ‘well-paying American jobs’, they still constitute just 1% of US’ total exports and its imports from India account for just 2%, Obama pointed out.
“We do $100 billion a year of trade with India, which is a great improvement since I took office. But we do about $560 billion a year with China. That will give you some sense both of the potential growth that India might unleash and the potential for greater trade between our two countries,” he said. The initiative to route investments from the Indian diaspora in the US, the president said, would be a public-private partnership.
American companies can make sure that these accounts can help Indians in day-to-day lives by digitising retail transactions,” Obama suggested. He also called for growth to be more sustainable and inclusive.
“India’s growth in recent decades has lifted countless millions out of poverty and created the world’s largest middle class. There’s an important lesson in that. Growth can’t just be measured by GDP, can’t just be measured by a bottom line on a balance sheet. In the end, growth has to make people’s lives better in real ways,” he said.”
While President Obama has been busy trying to revive the failing US economy by winning business from countries like ours, a friend in a senior position in a leading telecom company in India called to reiterate the fact that the economic downturn has come down hard on his company and the telecom industry in general. Apparently, in his business, existing clients have delayed their renewals or renewed their contracts at substantially lower fees; prospects have either walked away or are delaying their decisions to purchase; and a few projects have been abandoned under a credit squeeze.
These scenarios are probably true for most businesses and countries around the world – India and the United States included. But, the heartbreak for most people is the fact that nobody seems to be able to predict an accurate picture of what lies ahead.
Globally, it seems, the demand for, and hence the value of, every type of asset (including intellectual property) is falling and it is uncertain if this trend will be reversed soon. This fall in demand is creating a downward pressure on incomes from those assets, leading to losses in businesses, jobs and demand for talent (an artist I met recently is selling his paintings at one-third of what similar paintings have fetched him two years ago)… which, in turn, are steering economies towards a world of unhappy minds and empty stomachs.
[Citation: Obama: US and India can be ‘best partners’, BBC News India, 27 January 2015; Obama in India: US president announces $4 billion of new initiatives, trade missions to help boost infrastructure, Economic Times, ET Bureau, 27 January 2015.]