U.S. and China flags at the 23rd Session of the U.S. China Joint Commission on Commerce and Trade (JCCT) press conference, at the Andrew W. Mellon Auditorium, Wednesday, December 19, 2012, in Washington, D.C.   The JCCT holds high-level plenary meetings on an annual basis to review progress made by working groups that focus on a wide variety of trade issues. These working groups meet throughout the year to address topics such as intellectual property rights, agriculture, pharmaceuticals and medical devices, information technology, tourism, commercial law, environment, and statistics.   Established in 1983, the JCCT is the main forum for addressing bilateral trade issues and promoting commercial opportunities between the United States and China. The2011 JCCT meeting was held in Chengdu, China, where China agreed, among other issues, to improve intellectual property enforcement, delink innovation policies to government procurement preferences, and provide a fair and level playing field in China’s Strategic Emerging Industries. USDA photo by Lance Cheung. 

Trade tensions between US-China not helping FDI in India

In the view of experts, India needs to go beyond its protectionist measures and boost FDI by eliminating red tapism.

There has been a constant decline in FDI in India, in spite of India being a heavily populated nation. The recent US-China trade wars should have opened doors for investment in India as it is a big market and is growing at a fast pace. The investors should have found India promising but sadly this has not been the case. There are two main reasons for this.

  1. The protection measures adopted by India.
  2. Pre-election tensions.

In the beginning of this year, the government had announced new rules and regulations for e-commerce companies like Amazon, Walmart, etc in order to safeguard the interests of small business people of India.

An oil refinery project which was backed by Saudi Arabia was proposed to be relocated to another region as there were protests against it by the farmers.

There was an announcement by the Foxconn Technology group, that Apple’s latest models would be produced in India. Looking at the recent trade tensions between US and China, this could be a golden opportunity for India and beneficial to Apple and Foxconn to move their production units to India.

There is a dire need for India to attract foreign investment in its territory if it wants to progress rapidly. They need to grab these opportunities as foreign companies are hesitant to invest in China and finding India a better proposition. But for this, India needs to provide a safe and attractive alternative. In order to boost its GDP ratio from 30% to 40% and attain double digit growth, India needs these kinds of investments. If this is made possible, we can also try to attain speedy growth rates like the Chinese and East Asian economies.

The major hurdles in India’s progress are obsolete Labour laws, tedious land acquisition processes, red tape and foreign exchange limitation, in spite of India achieving 77th spot in World Bank’s ease of doing business, in 2019.

As per an economist, even partial concessions in restrictions in large sectors like banking, and multi-brand retail, pave the way for elevating FDI in-flow to over 2% of GDP from the present 1.5%.


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