On July 29, USISPF and the United States Association of Former Members of Congress (FMC) co-hosted a virtual roundtable featuring Congressman Ami Bera, Congressman George Holding, and Becca Gould, Senior Vice President for Public Affairs at American Tower Corporation, moderated by Ambassador Miriam Sapiro. The discussion touched on many areas of opportunity for US-India trade relations, how to address outstanding challenges, and the importance of cooperation between the two countries in light of deteriorating relations with China and the ongoing COVID-19 pandemic.
Congressman Ami Bera spoke on the “endless” opportunities for the US and India to work together in the midst of the COVID-19 pandemic, pointing in particular to the opportunities presented by India’s pharmaceutical and vaccine development sectors. Another area of opportunity that he discussed was the potential for partnerships between US and Indian universities and research institutions. He also noted that, while a trade agreement has not yet been reached, it seems “one step away from completion” and the fact that the dialogue on a trade agreement has continued despite distractions from geopolitical and public health crises is optimistic.
Congressman George Holding highlighted the bilateral nature of support for the US-India relationship in the US, and the strides that the two countries have made in deepening their economic ties and defense cooperation. In terms of the future of this relationship, he noted that deteriorating relations between the US and China present an opportunity to deepen ties with India, and spoke to the potential for a deeper partnership in areas such as education and telemedicine as the experience of COVID-19 has led to a greater ability and willingness to work online.
Becca Gould highlighted the importance of ‘mini-deals’ between the US and India that aren’t as widely publicized as a potential trade agreement but are “ongoing daily” as a result of continued dialogue between the two countries, noting recent success in defense synergy, connectivity, and maintaining pharmaceutical exports.
On July 24, USISPF and HSBC collaboratively hosted a webinar on “Global Supply chain Opportunities in India,” featuring NITI Aayog CEO Amitabh Kant, Invest India Managing Director and CEO Deepak Bagla, and USISPF President and CEO, Mukesh Aghi.
In his opening statements, Dr. Mukesh Aghi highlighted the shift in U.S. businesses towards a “China plus one” strategy and investment in high ESG (environmental, social, and governance) geographies. He also pointed to the energy and pharmaceutical sectors as areas where U.S. companies are interested in investing in India.
Amitabh Kant, CEO of think tank NITI Aayog, spoke on the opportunities for India to become a global manufacturing hub, as COVID-19 has accelerated a trend towards diversifying global supply chains. Although other countries have benefited from U.S. companies seeking alternatives to China-based supply chains, he argued that India is the only sustainable option in the long term, since it has the “capability for large-scale production of export-ready goods and a large-scale domestic market.” He also highlighted the efforts of the Government of India to enact reforms on the ease of doing business and opening automatic-route foreign direct investment (FDI) across sectors, and to pursue a strategy of “make in India for the world.”
Deepak Bagla, Managing Director and CEO of Invest India, spoke on India’s goal of achieving a $5 trillion economy by 2025 and its advantage as an investment destination. He provided insight into Government of India initiatives such as the Empowered Group of Secretaries and project development cells, as well as state-level reforms and ‘single window’ processes to improve the experience of setting up business in India. He also spoke on the “cluster approach” and shortening of supply chains, in response to which India has developed a “plug and play” model for industrial clusters and industrial townships.
On July 28, USISPF hosted a virtual roundtable on the current state of the Indian distressed market and related investment opportunities. Featured speakers included Ambassador Frank Wisner, International Affairs Advisor at Squire Patton Boggs; Sunil Mehta, former chairman of Punjab National Bank and currently, the non-executive chairman of Yes Bank; and Cyril Shroff, Managing Partner of Cyril Amarchand Mangaldas, as well as L Viswanathan and Dhananjay Kumar from Cyril Amarchand Mangaldas. Stephen Lerner, Global Chair of the Restructuring and Insolvency Practice Group at Squire Patton Boggs, moderated a panel discussion in which the speakers shared their insight on alternative mechanisms for insolvency and bankruptcy resolution, and opportunities these present for U.S. investors in India.
In his opening statements, Ambassador Wisner characterized distressed assets as “storehouses of great value and platforms for future growth,” and said that opportunities to restructure and refinance distressed assets in India could be a “fruitful endeavor” for U.S.-India cooperation.
Sunil Mehta discussed the improvements to India’s insolvency and bankruptcy policies since the creation of the Insolvency and Bankruptcy Code, 2016 (IBC) as well as some challenges that remain, particularly in light of the COVID-19 pandemic. He highlighted pre-packaged solutions, one-time restructuring, and asset reconstruction companies as potential resolution platforms that are being considered as alternatives to the IBC. Finally, he discussed the success of the bank-led resolution structure in the case of Yes Bank, which has been able to raise $2 million in capital through its public offering earlier this month.
Cyril Shroff also discussed the importance of the IBC, saying that the stressed assets environment has changed significantly as a result of having a rules-based system for resolution according to global best practices, and that its success has been supported by proactive legislative and executive action, as well as landmark judgements by the Supreme Court of India. While noting that the government’s decision to suspend the IBC in March was an appropriate policy response at that stage, he warned that the suspension may be abused by companies whose financial difficulties are not due to COVID- 19. Looking to the future, he predicts flexibility and open-mindedness on legislative reforms, new vehicles for private capital, meaningful action on pre-packaged regime, notification of a model code for cross-border insolvency, and a financial sector resolution code.
On July 24, 2020, USISPF hosted a briefing with Under Secretary Mark Menezes of the Department of Energy to discuss the recent U.S.-India Strategic Energy Partnership (SEP) Ministerial as well as future energy collaborations with India. Moderated by Nolty Theriot, Senior Vice President of Government Affairs & Policy, the panel included partnerships from a variety of industry members, including companies like Chart Industries, Tesla, Exxon Mobile, Cheniere Energy, Air Products & Chemicals, Freeport Industries, Xcoal Energy & Resources, and JTI India Projects. The discussion offered insights into government and industry perspectives on opportunities and challenges in the U.S.-India energy relationship.
Under Secretary Menezes highlighted the industry perspective, especially pursuing an ‘all of the above’ approach as a means of advancing economic growth and energy security. Following the second iteration of the U.S.-India Strategic Energy Partnership Ministerial meeting, the Under Secretary pointed to energy trade as a critical point of the bilateral relationship. To that end, he emphasized recent growth in this partnership. The U.S.-India Gas Task Force has already seen success in expanding gas and oil trade, the U.S. is now India’s fifth largest supplier of natural gas, and there has been an increase in crude oil and coal imports in India from the U.S. Looking forward, the nuclear advancement discussions also represented one important avenue to advance the partnership. Thus, the abundant energy supplies from the U.S. have been well utilized in meeting Indian demand.
Energy technology exchanges were also featured as an important component of this relationship. The launch of the Public-Private Hydrogen Task Force, together with the Ministry of New and Renewable Energy, the USISPF and the Department of Energy focused on the production of hydrogen from both renewable and fossil fuel sources. Under PACE-R, efforts towards research and development on smart grids and biofuels were conducted by collaboration between American and Indian academics, national labs, and private players. Bloom Energy was spotlighted as a private player leading in the area of fuel cell use. These developments occurred in conjunction with workforce development benchmarks as well. The Under Secretary reiterated the Department of Energy’s commitment to gender diversity and skillset diversity, and the work of the South Asia Women in Energy platform to this end.
The panel offered space for industry members to share their work and feedback. Companies were in agreement on India’s critical role in future energy sector growth, both as a collaborator and as a significant market. To this end, the need for pilot projects and the acceleration of regulatory body certification was suggested as a means to speed up this development. The support for a hybrid model, where no one fuel source would ‘win out’, was reiterated, and hydrogen spotlighted as a big part of this future. India’s use of its deep-water territory as a source of domestic crude oil and potentially natural gas energy was suggested to reduce its dependence on imports. Companies expressed that it would be beneficial to both countries if it was an American IOC that assisted this transition. They also highlighted the need for India to update its investor protection regulations to facilitate this. Additionally, in terms of regulatory changes, the parity in India’s tax structure for LNG in comparison to other fuels was also suggested as the key to unlocking LNG demand in the country.
Participants also spoke of opportunities in new avenues, including reduced-emission sources of energy, Gasification technology, in addition to carbon capture utilization and storage, were discussed as opportunities for significantly cleaner uses of indigenous energy sources. The growing Indian steel industry also offered growing opportunities to export metallurgical coal to India, a critical input for the industry that India does not produce in the right grade abundantly. As a win-win situation, it offered the U.S. a huge opportunity as it is a 7-billion-dollar market. On India’s end, the quality of U.S. coal, both metallurgical and low-ash, low-moisture thermal coal, is among the world’s best.
Finally, participants highlighted some regulatory changes that would increase the ease of doing business bilaterally. While Indian clients typically preferred flexible short or medium-term contracts (particularly given the current economy), long-term contracts were seen as most beneficial to the relationship, and investments in infrastructure and shifting market dynamics would be useful to this end. Facilitating face-to-face meetings with a wider consortium of Indian companies was also suggested as a way to expand the buyer segment. Finally, achieving more clarity and consensus on tariffs, aligning safety standards to make sense for U.S. companies, and streamlining procedures for India-based operations would go a long way in boosting business.
Under Secretary Menezes concluded the call by commending the industry members for bringing in cutting edge technology to use. While India has a great future of growth in the energy sector, bringing technology across all fuel sources to meet this demand in a manner that will reduce emissions is essential. The Department of Energy is committed to working bilaterally through potential hurdles, from tax policy to regulations, and in collaboration with industry members across both nations to this end.
On Tuesday, July 21, the U.S.-India Strategic Partnership Forum hosted Ridham Desai, Managing Director of Morgan Stanley India, to talk about Indian equity market outlook for 2021. Mr. Desai’s expertise gave attendants an insight to the various factors at play in determining the Indian economy both pre and post COVID, as well as its potential for recovery.
Here are 5 key takeaways from the session:
Equity Market Downturn: While the government elected in 2014 created a lot of optimism, due to its sizeable mandate after decades of fractured coalition governments, the positive impact of this optimism in the equity markets took a downturn a year into their term. India began derailing and its stocks consistently underperformed in comparison to emerging market equities. So, while absolute gains of about 50% were seen in the stock markets since March this year, they mask the downs of the stock market for the preceding five years and do not reveal how Indian equities struggle to compete with emerging market cohorts. It also reveals a broader lack of confidence from the markets in India’s future growth prospects.
Policy Environment— Restrictive or Enabling? The downturn in the equity market was attributed to a few policy decisions. First, there was a restrictive policy environment for the previous five years, which may have long term benefits, but caused a near term tax on growth. These include the comprehensive Goods and Services Tax reform, the new bankruptcy code, as well as more restrictive real estate regulations. While sustainable overall, these policies created a near term skepticism in the market about India’s prospects. There were also some policy missteps that compounded the issue. For instance, the 2014 administration inherited public sector banks with balance sheets that were in need of government aid. However, the administration did not believe at first that these loans deserved public taxpayer help, which hurt growth, and it was only in 2017 that the banks were recapitalized following a change in the government’s mind. Another decision was demonetization, which served some overall purpose, but dropped monetary aggregates and currency in circulation to huge lows, which were not recovered for about three years. Additionally, corporate decision making on unviable infrastructure projects that created strain on bank balances through loan-taking had an impact. All these factors, in unison, meant that the Indian economy was experiencing some bumps in the road. The market lost confidence that India’s growth rate was trending at 7-8 percent, pegging it at about 5 percent instead.
Covid-19 Hit Economy: Even as the policy environment began stabilizing by early in 2020, COVID unfortunately hit and stalled their effects. India’s financial sector was not yet out of the woods, with banks just exiting one non-performing loan cycle and now at risk of another. It is thus important that this does not lead to risk aversion in the banks, leading to low impact loans that slow growth. While COVID has not had the outrageous impact predicted for India, the near-term risk factor remains until the vaccine is available. Prior to the lockdown, India’s PMIs had hit all-time highs in February, offering a glimpse at India’s growth potential sans COVID and reflected changes in corporate tax rates and other government reforms.
What can speed up recovery? Externally, there is a push to diversify the supply chain by multinational corporations, and India is being considered a viable option by many. This creates an impetus for Indian governments, and both at the state and central level, to create more investor-friendly reforms. We’re already seeing a surge in services investments, from banks to tech companies who have vested interests in India as a marketplace & India offers strong growth potential to various aspects of tech value chain. Additionally, it was suggested that the government make strategic sales of its assets, through a transparent and confidence-boosting process following the example set in the early 2000s.This has already begun with the government’s announcement of privatizing 5 percent of the railways — a small percentage change representing a huge shift in thinking. Other suggested avenues would be the healthcare sector, where private-public partnerships have been seen to work well in the past. Finally, other reforms updating labor laws and liberating the farmer economy from middlemen will have domino impacts on the economy, boding well for a strong Indian recovery from the current economic crisis.
Optimism in India’s growth story: While the session offered insight into the policy background behind India’s equity market underperformance, and pathways for its emergence from this crisis, there was also a great confidence in India’s ability to emerge from the crisis stronger. This optimism was driven from a world-wide V shaped recovery thanks to enormous stimulus, which would certainly buoy India’s recovery as well. Without risk aversion on the part of Indian banks, India’s strong demographics and growth prior to the lockdown created a positive vision for its future.
On July 23, USISPF hosted a roundtable with Dr. Guruprasad Mohapatra, Secretary of the Department for Promotion of Industry and Industrial Trade (DPIIT). In discussion with USISPF members, Secretary Mohapatra shared insight and updates on the ongoing work of the DPIIT to improve ease of doing business in India.
In his opening statements, Secretary Mohapatra discussed the challenges and opportunities presented by the COVID-19 pandemic, which has caused companies to rethink their strategic plans, accelerated the adoption of digital technologies, and highlighted the need to diversify supply chains by demonstrating the risks of overreliance on a single geography for sourcing essential inputs. He also discussed recent efforts by the Government of India to attract investment, including the establishment of Empowered Groups of Secretaries and project development cells to assist investors in specific sectors, the March stimulus package, and reforms.
Finally, Secretary Mohapatra discussed India’s success in accelerating the domestic production of goods such as personal protective equipment (PPEs), N95 masks, and ventilators, which were necessary to the country’s COVID-19 response. Before March 2020, no PPEs or N95 masks were manufactured in India, and demand for ventilators far outstripped the in-country production capabilities. As of July, Indian manufacturers are not only producing enough PPEs, masks, and ventilators to meet domestic demand but exporting them.
Representatives from USISPF member companies – industry leaders from many sectors, including technology, energy, aerospace, logistics, and more – had the opportunity to highlight or recommend policies beneficial to their sector, or raise concerns about challenges that the DPIIT could help to address.
On July 14th, 2020, the U.S.-India Strategic Partnership hosted a panel by representatives of the state government of Chhattisgarh featuring Mr. R P Mandal, Chief Secretary; Mr. Manoj Kumar Pingua, Principal Secretary, Department of Commerce & Industries; Mr. Amitabh Jain, Additional Chief Secretary, Finance; Mr. Rakesh Chaturvedi, Principal Chief Conservator of Forest who offered insights to the capabilities and potential of the state, as well as opportunities for collaboration with the United States.
Since its creation in 2000, its industry has grown exponentially, and the state has achieved a leading position in the start-up and ease of doing business rankings for the nation. As a consequence of its shared borders with seven other states, it enjoys market access to a population of 510 million people, facilitated by its robust transportation systems.
What makes Chhattisgarh an attractive investment destination?
Abundance of raw materials: Chhattisgarh also has many raw materials as a consequence of its geography. It is abundant in 28 minerals, making it an ideal destination in India for companies in iron, steel, and power industries. It also is home to many forest products, due to its 44% forest cover. This segment has seen a lot of growth with the export of forest produce across the globe, and is assisted by the fact that it is inherently organic, although full certification is yet to be acquired. Tribal families acting in a federation in the industry receive the Minimum Support Price and ensure the benefits of value addition reach the tribes. It is an area with great investment potential, and the federation is considering creating a BBB board to increase visibility of these raw materials.
Human Capital: On the human capital side, its education ecosystem is well established. With 3000 vocational training institutes, it is home to the largest skill development effort in India. It also has a variety of public and private universities and colleges, as well as ITIs, to meet various educational needs.
Geographical Connectivity: The state has also invested in its connectivity to increase ease of transport for industries, with national highways connecting Chhattisgarh to other major cities, as well as railways connecting remote regions of the state. Its ‘Smart City’, Nava Raipur, has state-of-the-art infrastructure as well as dedicated sectors for housing and non-polluting industries, making it an ideal location for technology-based industries.
Industrial growth: Currently, industries in the state are in sector-specific industrial parks to facilitate cluster-based development in the state and all districts. Industries can be grouped by type: from ‘core strengths’ like steel, power and aluminum, to ‘sunrise sectors’ like food processing and biofuels, and ‘growth potentials’ like pharmaceuticals and textiles. This overview, along with Chhattisgarh’s ‘single window’ system and cost-efficient business opportunities, make it an ideal location for foreign capital.
Opportunities for collaboration with US Industry:
Manufacturing in varied sectors, electronics, food processing, energy, and others. Some specific policies encourage the United States to consider Chhattisgarh as a location for capital. A highlight would be the Chhattisgarh Industrial Policy, which offers special bespoke incentives and subsidies for investments above $13 million and similar incentives in electronics and ITEs for fixed capital investments.
Panelists pointed out that Chhattisgarh had fortunately fared quite well with COVID, with traceable contact of patients and no community spread. While the lockdown led industries to shut temporarily, processing industries and industries with continuous processes had continued to function. Currently, since most industries have opened to function at over 80% capacity and migratory laborers have returned to the state increasing labor supply, the moment is opportune to invest in the supply chain of the state. Given the natural resources of the state and policy reforms to attract and favor investment, Chhattisgarh has committed itself to growing into its full industrial potential.
Tech Collaboration: Spurring Innovation for Global Good.
Nik Deogun, CEO of the Americas and U.S. Senior Partner at the Brunswick Group, moderated a panel on U.S.-India technology collaboration and innovation at India Incorporated’s ‘India Global Week’. The panel featured Shri Ravi Shankar Prasad, Minister for Communications, Electronics & IT and Law & Justice, Government of India, joined by Surya Kant, President, North America, UK and Europe, Tata Consultancy Services (TCS), as well as Rajen Vagadia, Vice President and President, Qualcomm India & SAARC.
The conversation highlighted India’s present initiatives in several significant areas of technological innovation, as well as the potential for industry members to support India’s growth in these. Minister Prasad highlighted the advances made to support India’s growing importance in the global digital supply chain, from ease of doing business measures to digitizing outdated business regulations. Mr. Deogun followed this with a question regarding 5G’s relevance to these advances, and the danger of India potentially ‘missing the bus’ on that front. In response, Minister Prasad quipped, “India is too big a country to miss any bus, and our technological background confirms that.” He went on to speak of the importance of 5G, as well as robust security apparatus to support 5G trials, being developed in partnership with IIT Madras. Mr. Vagadia detailed Qualcomm’s role in 5G, explaining that it had already arrived in India and the focus was now on identifying relevant applications for India through 5G Hackathons. Surya Kant spoke of how TCS was able to assist its clients return to a ‘business-as-usual’ model in the COVID period, and how its community first approach to job creation facilitated this success.
Energy Collaboration: Mission Mode for Security & Diversity
As part of India Incorporated’s ‘India Global Week’, USISPF Senior Vice President, Government Affairs & Policy, Nolty Theriot moderated a panel on U.S.-India energy collaboration. The webinar featured Mahmoud Jardeaneh, Energy Attaché at the U.S. Embassy in New Delhi, in conversation with Sujoy Ghosh, Vice President for APAC & India at First Solar; and Robert Fee, Vice President, International Affairs and Commercial Development, at Cheniere Energy.
The virtual conversation was an insight to the progress made in bilateral energy trade between the U.S. and India over the past few years. Mr. Jardeaneh called energy the centerpiece of the bilateral relationship, exemplified by the increases in oil, LNG, liquified gas, and other exports. Panelists acknowledged the impact of COVID on the growth of cooperation. However, Mr. Fee also highlighted how COVID had shown the resiliency of natural gas and LNG thanks to long-term contracts and a portfolio approach. Mr. Ghosh also appreciated how the current period had created an economic case for moving to renewable energy. This is a goal outlined by U.S.-India Gas Task Force as well, focused on supporting innovative solutions in India’s transition to natural gas.
Partners in Revival: Time for Action
USISPF President and CEO, Dr. Mukesh Aghi moderated a conversation between Ambassador Taranjit Singh Sandhu, Ambassador of India to the United States, and Ambassador Kenneth I. Juster, U.S. Ambassador to India, discussing the history, current relevance, and potential growth of the U.S.-India partnership in the current period. This conversation was conducted as part of India Incorporated’s ‘India Global Week’.
The Ambassadors both spoke warmly of the shared values of democracy, social justice, as well as the large people-to-people connect that formed the bedrock of the U.S.-India relationship. They also spoke favorably of the prospect of a free trade deal between the two nations to solidify the trade relationship, already growing at 10% each year, and create mutually favorable trade opportunities in defense, investments, and even healthcare. Particularly in the COVID period, both Ambassadors highlighted the importance of India-U.S. partnership in medical research and production. Finally, the energy sector was identified as the component of the trade basket with a lot of potential moving forward, and an area where both sides would see a win-win situation through collaboration.
United States and India: Unlocking the Full Potential of Major Defense Partner
An insightful discussion on U.S.-India defense partnerships was moderated by Vikram J. Singh, USISPF Senior Advisor for Defense & Aerospace, and featured Dr. Joe Felter, William J. Perry Fellow at the Center for International Security and Cooperation and Research Fellow, Hoover Institution; William Blair, Vice President and Chief Executive at Lockheed Martin India; Salil Gupte, President of Boeing India; N Raveeswaran, Head of Strategic Business Partnerships, Aerospace & Defense, at Mahindra Defense; and strategic and foreign policy analyst Dr. Harinder Sekhon.
Mr. Blair and Mr. Gupte highlighted major ongoing programs by Lockheed Martin and Boeing respectively in collaboration with the Indian government and other private players as examples of the current defense partnership and its potential for growth. Panelists also spoke of opportunities for the U.S. and India to collaborate in defense and aerospace raw materials, for which they recommended a government-to-government and consortium approach. Dr. Sekhon discussed the importance of defense in the current political climate, and the pertinence of information sharing through systematic security classifications on either side for ease of access. This underscored Mr. Felter’s pertinent final point, that the greatest strength to this defense relationship would be trust, which both sides could shore up by putting ‘meat on the bones’ of information and technology sharing initiatives. The panel offered a peek into the future and strategy of the U.S.-India defense relationship, as well as the pertinent role played by the arms and aerospace industry in facilitating growth. While strategic partnerships were concluded as an important path to take this relationship further, panelists emphasized the importance of mutual trust in creating the most mutually beneficial policies.
A Conversation on Enabling Startups in the US-India Corridor
Anil Advani, Managing Partner at Inventus Law, moderated a panel hosted by India Incorporated as part of their ‘India Global Week’ on enabling start-ups in the U.S.-India corridor. The webinar featured Umesh Sachdev, Co-founder & CEO of Uniphore; Bipul Sinha, Co-founder & CEO of Rubrik; and Praveen Akkiraju, Board Advisor at Team8.
Panelists discussed the state of play in the U.S.-India tech corridor. Bipul Sinha highlighted the transition of India from a technology and production hub, to a major producer of entrepreneurs today leading to the proliferation of Indian-owned business ventures. Praveen Akkiraju also commended the rapid digitization of Indian infrastructure, speaking highly of the sophistication of the Indian market in adapting to new technologies as well. He spoke of healthcare tech and unconventional ventures outside traditional business-to-business or business-to-consumer areas as major investment opportunities in the future. The panelists also highlighted the potential of the dynamic US-India startup corridor to create well-paying jobs in the both countries- a win-win opportunity for both economies.
On July 16, USISPF hosted a virtual roundtable with Ambassador Nicholas Burns, senior counselor at the Cohen Group and former U.S. Under Secretary of State for Political Affairs. Speaking with members of USISPF’s Board of Directors, Ambassador Burns shared his insights on the shifts in the U.S.’s foreign policy frameworks, the role of global institutions in the post-COVID world, and the importance of deepening U.S.-India relations.
Speaking with USISPF President and CEO Mukesh Aghi, Ambassador Burns outlined the challenges faced by the U.S. and India as a result of the ongoing pandemic, global economic crisis, and the actions of an increasingly aggressive China. He emphasized the importance of the U.S.-India relationship to addressing these challenges, both in a bilateral and multilateral context.
During a period of discussion with USISPF’s Board of Directors and other participants, discussion focused on U.S.-India relations in the context of broader regional dynamics and opportunities for defense and economic cooperation with Japan and Australia through the ‘Quad’ framework. Ambassador Burns also assessed the impact of turning points in the bilateral relationship, such as the Civil Nuclear Deal and 2017 declaration of strategic defense partner status.
On July 7, Kishore Mahbubani and Ambassador Tim Roemer joined USISPF members on a webinar to discuss the insights shared in Mahbubani’s new book, Has China Won?, which was released on March 31, 2020. Mahbubani is the former Singaporean Permanent Representative to the United Nations and current Distinguished Fellow at the Asia Research Institute, while Ambassador Tim Roemer is the former U.S. Ambassador to India and, currently, Executive Director and Senior Counselor at APCO Worldwide, as well as a member of the USISPF Board of Directors. Both speakers brought extensive experience and expertise to their discussion of the “contest” between the U.S. and China, and the impact of this contest on India’s relationship with both countries.
Some of the key takeaways of the discussion – and Mahbubani’s book – were the need for a “comprehensive, thoughtful, and long-term strategy” in the U.S.’s approach to China and for the two countries to balance competition with cooperation. Mahbubani also points to China’s strategic mistake in alienating the U.S. business community through forced technology transfers and intellectual property violations. In terms of how tense relations between the two countries impact their respective relations with other countries in the Indo-Pacific region, including India and the ASEAN bloc, Mahbubani highlighted that no country wants to be forced to choose between the U.S. and China, but there is a “huge reservoir” of goodwill to the U.S., particularly in ASEAN, which the U.S. can cultivate through a nuanced diplomatic approach.
Speaking on India, Mahbubani described India as occupying a “geopolitical sweet spot” as the “most courted” country in the world, with many opportunities. In terms of U.S.-India relations, he highlighted the benefit to the U.S. of having “a close, trusted relationship with an independent India,” and pointed to the number of influential Indian-born leaders in the U.S. business community.
On June 23, USISPF hosted a virtual briefing with Congressman Ami Bera on the challenges faced by U.S. biopharmaceutical and health care companies in India, as well as opportunities for collaboration between U.S. and India in these sectors. Many USISPF member companies who are leaders in the pharmaceutical, medical device, and health care sectors participated in the discussion.
In his opening statements, Rep. Bera highlighted the need for countries to work together rather than turn to protectionism in the face of COVID-19 and the global economic downturn. He also pointed to the current situation as an opportunity for the U.S. to deepen its relationship with India, both through investments as the U.S. – alongside many other countries – seeks to diversify its supply chain in light of the COVID-19 pandemic’s disruptions to existing supply chains and critical infrastructure, and through collaboration on a COVID-19 vaccine and research.
The key issues raised by USISPF member companies regarding the challenges they face in India include barriers to market entry, weak intellectual property (IP) protections, and product pricing controls. Kate Beale, Associate Vice President of PhRMA, who moderated the discussion, also identified the bilateral trade dynamic, pro-innovation policy, and the broader health care access discussion as priorities for the U.S.-India relationship in the pharmaceutical sector. Participants also highlighted opportunities for the two countries to deepen ties through research collaboration and vaccine development.
The US-India Strategic Partnership Forum kicked off its “Startup Connect Program” at its virtually held West Coast Summit. Focused on strengthening US-India bilateral ties through startups, the summit brought together over 300 executives including 100 startups, 100 Fortune 500 companies, and senior officials from both governments.
Speakers at the launch included: Ambassador Taranjit Singh Sandhu, Ambassador of India to the United States; Keith Krach, Under Secretary of State for Economic Growth, Energy, and the Environment, U.S. Department of State; John Chambers, Founder and CEO, JC2 Ventures & Chairman of USISPF; Shantanu Narayen, Chairman, President, and CEO, Adobe; Raj Subramaniam, President & COO, FedEx Corporation; and several startup founders.
In a virtual ‘fireside chat’ with John Chambers, Ambassador Taranjit Sandhu, the Ambassador of India to the U.S., highlighted the importance of technology to both countries’ ability to respond and adapt to the COVID-19 pandemic. He pointed to U.S.-India’s long-standing partnership in critical sectors, such as health care, life sciences, and technology, as critical to addressing current challenges, and categorized young innovators and their startups as a key driver of economic growth that will continue to bring the countries together. Finally, he outlined his priorities as the Indian ambassador to the U.S., including addressing U.S. visa issues, deepening trade relations, and attracting investment on both sides. He also expressed his optimism about the possibility of finalizing a smaller trade agreement in the near future.
Economic Diplomacy Enabling Startups
In conversation with John Chambers, Keith Krach, the Under Secretary of State for Economic Growth, Energy, and the Environment at the U.S. Department of State, outlined his three priorities as economic security, economic competitiveness, and building an Economic Prosperity Network of trusted partners. He pointed to India as an important partner in achieving these goals and highlighted the importance of cooperation between the U.S. and India in safeguarding intellectual property and global economic security, particularly in light of the challenges presented by China.
Leadership in a Post COVID-19 World
In a discussion moderated by Uniphore Founder and CEO Umesh Sachdev, Shantanu Narayen, the Chairman, President, and CEO of Adobe, and Raj Subramaniam, the President and COO of FedEx Corporation, shared their insight as business leaders into the opportunities and challenges presented by the COVID-19 pandemic, to startups and large corporations alike. They both emphasized the importance of approaching the current crisis as an opportunity for innovation, and highlighted technology, digitization, and data as key assets for companies to adapt to the “new normal.” Another point emphasized by both leaders is the importance of corporate culture.
On May 12, Rahul Ghosh, Senior Vice President of Global Emerging Markets, Credit Strategy & Research, at Moody’s, joined USISPF members on a webinar to share high-level views on the credit outlook of emerging markets.
Overall, Mr. Ghosh highlighted that the pandemic’s economic and financial fallout will heighten credit risks for emerging market issuers. While external and fiscal buffers vary across regions, low-rated sovereigns with large external repayments are most vulnerable to prolonged stress. Additionally, the fallout from the pandemic will increase the corporate default rate in emerging markets over the coming year. Finally, he noted that future challenges, as the world recovers from COVID-19, include lower rates and higher government debt, changing consumer habits, climate risks, protectionism, tech disruption, and income inequality.
His presentation focused on emerging markets more broadly, but during the Q&A session with USISPF members, Mr. Ghosh evaluated India’s ongoing fiscal response to the economic impact of COVID-19, including the RBI’s measures to increase liquidity, as well as some proposed or hypothetical steps the Government of India could take in the future. He also provided his insight on the impact the current global economic challenges could have on India’s banking and non-banking financial company (NBFC) sectors.
On May 5, Javier Piedra, Deputy Assistant Administrator of the Bureau for Asia, USAID, and Ramona El Hamzaoui, Deputy Mission Director for India, USAID, joined USISPF members on a webinar to discuss USAID’s COVID-19 response in India. Other colleagues from USAID were also on the webinar including Public Health Program Specialist Sangita Patel and Nahel Sanghavi, Senior Advisor for Innovation & Partnership, to share insights into efforts related to their specific expertise.
Javier Piedra began the discussion by highlighting that, since the outbreak of COVID-19, the U.S. government has committed more than $775 million to aid in more than 120 countries. In India, he pointed to the importance of addressing ‘second order effects’ of COVID-19, such as supply chain issues, as well as its immediate impact.
Ms. El Hamzaoui spoke on shift in USAID’s relationship with India, highlighting the agency’s current partnership-based initiatives to support not just India’s development but India’s role in the region and globally. So far, to address COVID-19 in India, USAID has provided $6 million in aid to support the Government of India’s response efforts. Interagency teams have supported initiatives ranging from helping female textile workers shift to mask production to training health care workers in contact tracing. USAID has also been assisting with initiatives to ensure that other health issues are not ignored during the COVID-19 crisis, from developing an app to support mother and infant health to facilitating the export of vital HIV/AIDS medication from India to Laos.
During a Q&A period with USISPF members moderated by USISPF Senior Advisor Vikram J. Singh, Ms. El Hamzaoui, Mr. Piedra, Ms. Patel, and Mr. Sanghavi spoke on topics ranging from India’s health care infrastructure and medical supply and pharmaceutical industries, to innovative solutions from the Indian technology sector and the CSR contributions of private-sector partners.
On May 5, Mugdha Sinha, Secretary of Science & Technology for the Government of Rajasthan, joined USISPF members through USISPF’s ongoing webinar series. In a discussion moderated by USISPF Chief Operating Officer Gaurav Verma, Ms. Sinha spoke on the Government of Rajasthan’s COVID-19 response and relief efforts, and the role that technology has played in this response.
Speaking on the Government of Rajasthan’s response to the COVID-19 outbreak, Ms. Sinha highlighted the proactive creation of two committees shortly after the first lockdown was announced, to address the needs of people from other states stranded in Rajasthan during the lockdown and to develop a post-COVID-19 economic strategy. Now that the lockdown is in its third stage, relaxing restrictions on movements in some district and allowing businesses and factories to resume activities, the Government of Rajasthan is now working to help people from Rajasthan who have been stranded elsewhere, domestically or abroad. Ms. Sinha identified new challenges related to these efforts, such as screening and quarantine measures to prevent new outbreaks of COVID-19 and increased demand for rural jobs as migrant workers return to their homes, but highlighted that so far, Rajasthan’s containment efforts have been efficient, effective, and proactive. She also highlighted that these efforts have been calibrated to save lives without risking livelihoods.
In terms of how Rajasthan has leveraged technology in its COVID-19 response, Ms. Sinha noted that ‘e-governance’ measures were already in place prior to the lockdown, which eased the transition to working from home for government officials. As well as contact tracing apps and processes virtually connecting the Government of Rajasthan to its constituents, the state has leveraged technological solutions to continue providing public access to cultural activities such as museums, which also provides continued employment to artists and artisans.
On April 29, Sunjeev Sanyal, principal economic advisor to the Government of India’s Ministry of Finance, briefed USISPF members on the state of the Indian economy and what is in store as the country reopens from its COVID-19 lockdown.
In a discussion moderated by Kaku Nakhate, President and Country Head, India, for Bank of America, Sanyal highlighted that India – and the rest of the world – should not imagine that economic recovery will mean a return to the pre-coronavirus world, but a ‘fundamental reset.’ He also said that India will play an active role in this post-coronavirus round of ‘rule-setting,’ pointing to the recent G20 endorsement of an action plan formed by the framework working group co-chaired by India and the UK. On the possibility of India playing a larger role in the restructuring of global supply chains, he said that the country has to be flexible and work with industry and partners as the situation continues to evolve.
In terms of the Government of India’s policy response to the economic impacts of COVID-19, he characterized this approach as having three steps. The initial step was to cushion the economic impact of COVID-19 through efforts such as the stimulus package targeting India’s most vulnerable citizens and pushing back financial deadlines. It is now shifting into the ‘opening up’ stage, as the staggered relaxation of India’s lockdown has allowed many areas to resume manufacturing and the movement of goods. At some point, the approach will ramp up for the ‘rebuild’ stage. Sanyal also noted that India has been successful in not expending its resources too quickly, giving it the monetary and fiscal space needed to respond as recovery efforts continue.
In a Q&A session with USISPF members, Sanyal provided updates on and insight into topics such as India’s new FDI rules, the current low oil prices, India’s fiscal deficit post COVID-19, and calls for increased spending on medical infrastructure, which he warned must include funding for public health and sanitation as well as hospitals. When asked on what economic reforms India should prioritize as it reopens, Sanyal noted that it depends on feedback from companies, but a lot of action will have to happen at the state, rather than the federal, level— pointing to Uttar Pradesh as a state which has already risen to the occasion.
USISPF and Squire Patton Boggs co-hosted a webinar briefing members on the latest policy responses to COVID-19 from a U.S., European, and Indian perspective. Speakers included Frank Samolis, Partner at Squire Patton Boggs; Ambassador Frank Wisner, International Affairs Advisor at Squire Patton Boggs; former U.S. Representative Joe Crowley; Matthew Kirk, International Affairs Advisor at Squire Patton Boggs; David Stewart, Principal at Squire Patton Boggs; and Dharmakirti Joshi, Chief Economist at CRISIL.
David Stewart, Matthew Kirk, and Dharmakirti Joshi spoke on the respective government efforts of the U.S., Europe, and India to reopen their economies while continuing to contain the spread of the COVID-19 virus. David Stewart opened the discussion by highlighting the U.S. government’s economic stimulus efforts in response to COVID-19, including the CARES Act, the Paycheck Protection Program, and the Main Street Lending program. In Europe, different countries have different in their impact and response to the COVID-19 pandemic, but across countries, efforts to reopen the economy largely involve adhering to social distancing measures, using track-and-trace systems to contain the further spread of the coronavirus, and financial packages. Dharmakirti Joshi stated that, while India has a limited fiscal space in which to organize its response, the country has several options to finance its response. He also noted that India has not “front-loaded” its response, and the next phase of its policy response should be aimed at support for small and medium businesses.
In a Q&A session with USISPF President and CEO Mukesh Aghi, Joe Crowley, Frank Wisner, and Frank Samolis shared their perspectives on the relationship between the U.S. and India. Rep. Crowley shared his insight into how the relationship between the U.S. and India has grown over the past few decades, and Frank Samolis spoke on the possibility of future trade negotiations between the U.S. and India. Amb. Wisner stated that cooperation between the U.S., Europe, and India is vital to containing COVID-19 and bringing back their economies, especially given the shifts occurring in the global economy as a result of COVID-19. He also highlighted the importance of India presenting a competitive and attractive market for foreign investment, to take advantage of global interest in diversifying supply chains.
On April 9, Amb. Taranjit Sandhu, the Ambassador of India to the United States, joined USISPF members on a webinar to provide updates on India’s COVID-19 response and what the Embassy of India is doing to assist citizens and businesses at this difficult time.
In terms of India’s response to COVID-19, Ambassador Sandhu emphasized that India’s goal is to minimize the human cost of the pandemic and to contain the virus. He highlighted the $22.5 billion stimulus package the Government of India announced in March, which provides targeted aid to India’s most vulnerable citizens. He also noted the Government of India’s recent decisions to extend tax deadlines and the visas of foreign nationals unable to leave India due to the national lockdown. He spoke of the opportunities for the U.S. and India to collaborate on issues related to COVID-19 in areas ranging from technological transfers to vaccine development, pointing to the recent teleconference and Twitter exchanges between Indian Prime Minister Narendra Modi and U.S. President Donald Trump in which the two leaders reiterate their commitment to working together at this time. He also stated that there will be many opportunities for India and the U.S. to strengthen economic ties in the post-pandemic future, particularly in the energy sector.
Ambassador Sandhu also answered questions from USISPF members related to lockdown exemptions for essential goods and services, the Government of India’s recent decision to ease restrictions on pharmaceutical exports, and where to find updates on pandemic-related policy decisions. The Ambassador encouraged U.S. companies with a presence in India to reach out to the Embassy’s commerce wing for assistance on specific issues.
On April 16, Sanjay Chadha, Additional Secretary of the Ministry of Commerce and Industry, joined USISPF members on a webinar to provide updates on the Ministry of Commerce & Industry’s response to the ongoing COVID-19 pandemic. In discussion with USISPF CEO & President Dr. Mukesh Aghi, Secretary Chadha provided insight into the Government of India’s next steps, and highlighted opportunities for the U.S. and India to deepen their economic partnership in the future.
Secretary Chadha stated that the government of India has two priorities right now, to contain the coronavirus and to address the impact of COVID-19 on the economy. He spoke optimistically about the future of U.S.-India trade, highlighting U.S. companies as playing an important role in reopening India’s economy after the lockdown is lifted. He advised USISPF member companies on procedures for seeking assistance on logistic and operational issues as a result of the national lockdown and, noting that Ministry of Home Affairs (MHA) guidelines are interpreted on a state-by-state basis, reiterated the importance of communicating with local authorities.
