US ‘cautiously optimistic’ about ties with India


TFA linked to meeting Bali conditions: U.S. official

Visiting U.S. Trade Representative Michael Froman said here on Monday
that despite positive developments such as the easing of the foreign
direct investment cap in the Defence sector, the U.S. remained
“cautiously optimistic” about relations with India as the Modi
government had raised tariffs.

Mr. Froman said the “so-called Peace Clause,” proposed in the recently
concluded Indo-U.S. World Trade Organisation (WTO) agreement, would
depend on whether India’s foodgrain buffer programme met the conditions
set in Bali.
The WTO’s Bali package included onerous conditions on making public
details of food security programmes, which India has so far not complied
“We have already seen some positive signs: projects approved, foreign
equity caps in key sectors such as defence and railways lifted. But we
have also seen certain tariffs increased, and there is a long way to go
on reform. So we are optimistic, but we are cautiously optimistic,” Mr.
Froman said. He was addressing businessmen at a Federation of India
Chamber of Commerce and Industry event.
On the WTO agreement, Mr. Froman said: “As part of the deal to allow the
Trade Facilitation Agreement to be fully implemented, we agreed to
intensify efforts to find a permanent solution to the food stockpiling
issue and eliminate any ambiguity in the Bali package about the
availability of the ‘so-called Peace Clause’ in the meantime, provided
that food stockpiling programmes meet the conditions set in Bali.”
The breakthrough at the WTO, said Mr. Froman, would not have been
possible without the personal engagement of President Barack Obama and
Prime Minister Narendra Modi.
He said the two leaders gave the partnership a mantra: “Chalein Saath Saath: Forward Together We Go.”
Indo-U.S. Trade Policy Forum revived
Mr. Froman will meet Commerce and Industry Minister Nirmala Sitharaman
on Tuesday for the first Trade Policy Forum between the two countries in
more than four years.
“So it’s another historic moment in what has been an important year for
relations between the United States and India,” Mr. Froman said.
Having heard Prime Minister Modi speak eloquently of his “Make in
India,” “Digital India,” and “Smart Cities” initiatives, increasing
investment in India will be critical as well, Mr. Froman said. “Rigid
local content requirements are likely to spawn less competitive
industries, increase costs to producers and consumers and lower India’s
economic welfare.”
Mr. Froman said enforcing a world-class intellectual property rights
regime is in India’s interests. He said dealing directly with piracy,
counterfeiting and compulsory licensing will be critical if India is to
play a leadership role in the knowledge economy and becoming “Digital
“We have great interest in the ongoing review of India’s Intellectual Property Rights Policy,” said the U.S.T.R.
“Ultimately, the most important factor determining the future evolution
of our bilateral economic relationship is the quality of the business
environment based on transparency, consistency, predictability,” said
Mr. Froman.
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