Business Economics & services Team (BEST)
Possible Takeaways from Modi-Obama Parleys Early Next Year
If reports have to be believed, the Modi administration is readying a bunch of policy and administrative decisions that will cheer President Obama, when he touches down in India in the coming month to be the chief guest at the Republic Day parade, the annual pageantry to showcase India's military strength along with her cultural richness and diversity.
Initially referred as a confidence boosting exercise, the first visit ever of a US president to attend the Republic day celebrations, is now increasingly talked about as a mission to seal many economic and defense deals with India. Almost all ministries, despite their hectic schedules in Parliament is working over time to hold discussions amongst themselves or with the representatives of the US companies to figure what are the irritants that have to be ironed out before Eagle touches down the Indian soil. There are some issues that top the pecking order and they are listed below.
1. The government expects that the logjam in Parliament may end in a day or two. By any chance, if it prolongs and affects the passage of the Bill seeking to increase foreign equity participation in insurance sector, the government may come out with an ordinance to that effect. Having regard to the fact that the main opposition- Congress party-is favorably disposed of with the bill, the government may not find difficulty in getting the nod of the house, when the bill finally will be introduced in the House.
2. A few US based e-commerce companies invested in India are pressing for allowing FDI in business to customer services (B2C)in the e-retail space to expand their foothold in India. They are willing to expand their operations and up their investment in India once that is allowed. Presently, FDI is allowed only in business to business (B2B) operations, which they point out is an irritant. While many of the Indian e-commerce companies, which are cash starved are pitching for allowing FDI in B2C format to shore up their bottom lines, there is a stiff resistance from brick and mortar retail companies not to do so, since it will afect tehir long term growth prospects. It is to be seen whether the government will display political courage to go against the powerful Indian lobby that is dead against the entry of foreign companies in B2C space.
3. Closely linked up is the issue connected with the retail opening up, which was allowed by the earlier government and the present government has put it in a limbo since it was a aprt of their manifesto not to allow multi-retail opening up. Will the government garner the strength to go against the dikat of allied organization of BJP is something to be seen?
4. Obama administration is pitching for strong legislation and administrative actions against violation of IPR and trade marks acts. They are also of the view that judicial pronouncements, particularly in the case of compulsory licensing, incremental innovation etc. in sectors like pharmaceuticals , electronics, telecom etc are harsh and go against the interest of the investing companies in India. It has to be seen whether the government has got any maneuverability to out do the opposition to bring them in line with the wishes of the US companies.
India is also likely to gain some brownie points from the discussions. The much debated visa problem will be coming up for discussion. The US reply and assurance will likely to be equivocal in the light of flak drawn by the Obama Administration for its relaxed visa and immigration policies. Also, India accounts for a major share in the H1B visas and all other categories of visas granted to foreign nationals. Analysts are of the view that not much can be gained on the visa front, since US will have to follow a tight policy on account of the general elections, which is not very far off from now.
Policy watchers opine that there can be some talks on totalization agreement, which India has been pressuring the US for quite some time. A positive decision on the issue will enable India to gain a lot of funds struck in the US by way of contribution towards social security by persons who are working on short term visas in that country. Going by the reactions emanating from some quarters, who have been actively lobbying for early conclusion of the agreement, the deal may not go through, since the revenue loss to the US will be considerable.
The other area that can come up for discussion is the transfer of state-of-the - art -technologies to India to facilitate India's Make in India program. It is reliably learnt that the US will be receptive to the idea, particularly in the field of environment, power and alternative sources of energy.
Possible Takeaways from Modi-Obama Parleys Early Next Year
If reports have to be believed, the Modi administration is readying a bunch of policy and administrative decisions that will cheer President Obama, when he touches down in India in the coming month to be the chief guest at the Republic Day parade, the annual pageantry to showcase India's military strength along with her cultural richness and diversity.
Initially referred as a confidence boosting exercise, the first visit ever of a US president to attend the Republic day celebrations, is now increasingly talked about as a mission to seal many economic and defense deals with India. Almost all ministries, despite their hectic schedules in Parliament is working over time to hold discussions amongst themselves or with the representatives of the US companies to figure what are the irritants that have to be ironed out before Eagle touches down the Indian soil. There are some issues that top the pecking order and they are listed below.
1. The government expects that the logjam in Parliament may end in a day or two. By any chance, if it prolongs and affects the passage of the Bill seeking to increase foreign equity participation in insurance sector, the government may come out with an ordinance to that effect. Having regard to the fact that the main opposition- Congress party-is favorably disposed of with the bill, the government may not find difficulty in getting the nod of the house, when the bill finally will be introduced in the House.
2. A few US based e-commerce companies invested in India are pressing for allowing FDI in business to customer services (B2C)in the e-retail space to expand their foothold in India. They are willing to expand their operations and up their investment in India once that is allowed. Presently, FDI is allowed only in business to business (B2B) operations, which they point out is an irritant. While many of the Indian e-commerce companies, which are cash starved are pitching for allowing FDI in B2C format to shore up their bottom lines, there is a stiff resistance from brick and mortar retail companies not to do so, since it will afect tehir long term growth prospects. It is to be seen whether the government will display political courage to go against the powerful Indian lobby that is dead against the entry of foreign companies in B2C space.
3. Closely linked up is the issue connected with the retail opening up, which was allowed by the earlier government and the present government has put it in a limbo since it was a aprt of their manifesto not to allow multi-retail opening up. Will the government garner the strength to go against the dikat of allied organization of BJP is something to be seen?
4. Obama administration is pitching for strong legislation and administrative actions against violation of IPR and trade marks acts. They are also of the view that judicial pronouncements, particularly in the case of compulsory licensing, incremental innovation etc. in sectors like pharmaceuticals , electronics, telecom etc are harsh and go against the interest of the investing companies in India. It has to be seen whether the government has got any maneuverability to out do the opposition to bring them in line with the wishes of the US companies.
India is also likely to gain some brownie points from the discussions. The much debated visa problem will be coming up for discussion. The US reply and assurance will likely to be equivocal in the light of flak drawn by the Obama Administration for its relaxed visa and immigration policies. Also, India accounts for a major share in the H1B visas and all other categories of visas granted to foreign nationals. Analysts are of the view that not much can be gained on the visa front, since US will have to follow a tight policy on account of the general elections, which is not very far off from now.
Policy watchers opine that there can be some talks on totalization agreement, which India has been pressuring the US for quite some time. A positive decision on the issue will enable India to gain a lot of funds struck in the US by way of contribution towards social security by persons who are working on short term visas in that country. Going by the reactions emanating from some quarters, who have been actively lobbying for early conclusion of the agreement, the deal may not go through, since the revenue loss to the US will be considerable.
The other area that can come up for discussion is the transfer of state-of-the - art -technologies to India to facilitate India's Make in India program. It is reliably learnt that the US will be receptive to the idea, particularly in the field of environment, power and alternative sources of energy.
