This is why retail is such a sore point in India-US trade relations

India 2019_

(Pavan Gupta, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Katharine Rooney, Senior Writer, Formative Content


The relationship between India and the United States has been described as one of the most important of the 21st century.

India is predicted to be the world’s second-largest economy by 2030, with the US the third-largest, giving it strong purchasing power. But cultural and policy barriers remain obstacles to a cohesive trade partnership, as highlighted in “Trading Against the Tide”, a discussion at the World Economic Forum’s India Economic Summit.

 

Piyush Goyal, Minister of Commerce and Industry, said India was committed to protecting the needs of its many small retailers, with 50-60 million small retail shops providing employment and working opportunities to around 120 million people. But the US is far from convinced that that is in either country’s interest.

India has introduced changes to its Foreign Direct Investment policy which still allow foreign-owned e-commerce companies to provide a marketplace for buyers and sellers, but stop them selling their own goods – a business model that can mean lower retail prices that undercut smaller retailers.

Bricks and mortar or global online retail?

We cannot let small retail die, and therefore we have restricted foreign direct investment in the multi-brand retail sector at 49%,” Goyal said at the Summit – adding that e-commerce should not provide a platform for predatory pricing.

But his American counterpart, US Secretary of Commerce Wilbur Ross, argued that protecting small bricks-and-mortar retailers would ultimately penalize all of India.

“If a hundred years from now, India still has as many small retailers as now, it will have held back the growth of the country immensely,” he said.

Ross pointed to the news this week that Amazon announced it was spending a third less this year on capital expenditure in India – the first time its annual investment in India has come down since it moved into the market in 2012.

“It probably would have spent a lot more in India if didn’t feel that there was a diminution in growth due to some of [India’s] policies,” Ross told the Summit. “So there is also that cost to India by the policy.”

India

What is the World Economic Forum’s India Economic Summit 2019?

Under the theme, Innovating for India: Strengthening South Asia, Impacting the World, the World Economic Forum’s India Economic Summit 2019 will convene key leaders from government, the private sector, academia and civil society on 3-4 October to accelerate the adoption of Fourth Industrial Revolution technologies and boost the region’s dynamism.

Hosted in collaboration with the Confederation of Indian Industry (CII), the aim of the Summit is to enhance global growth by promoting collaboration among South Asian countries and the ASEAN economic bloc.

The meeting will address strategic issues of regional significance under four thematic pillars:

• The New Geopolitical Reality – Geopolitical shifts and the complexity of our global system

• The New Social System – Inequality, inclusive growth, health and nutrition

• The New Ecological System – Environment, pollution and climate change

• The New Technological System – The Fourth Industrial Revolution, science, innovation and entrepreneurship

Discover a few ways the Forum is creating impact across India.

Read our guide to how to follow #ies19 across our digital channels. We encourage followers to post, share, and retweet by tagging our accounts and by using our official hashtag.

Become a Member or Partner to participate in the Forum’s year-round annual and regional events. Contact us now.

The road to New Delhi

While recent India-US talks failed to result in a new trade deal, commercial interaction between India and the US is growing quickly.

Trade in goods and services grew at an average annual rate of 7.59% from 2008 to 2018, more than doubling in value from $68.4 billion to $142.1 billion. The US was the second-largest trading partner for India in goods in 2018, and its single largest export destination.

Bilateral trade and investment between India and the US continues to grow.
Image: Trade at a Crossroads: A Vision for the US-India Trade Relationship

At the Summit, Ross noted that the US intends to increase total trade and reduce its trade deficit, and expressed concern about what he called “artificial and protectionist” trade barriers.

But he was optimistic about the future India-US trade relationship, saying that now elections are over, Prime Minister Narendra Modi has a “clear, strong position in the parliament, it should be a lot easier to take decisive action.”

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Teamgum @ TheNextWeb 2014

From fishing village to futuristic metropolis: Dubai’s remarkable transformation

Bangladesh, South Africa and Bolivia all beat the US for women’s representation in politics

Banks, insurance giants are free again to abuse the real economy

Commission Work Programme 2019: Delivering on promises and preparing for the future

Young and unemployed the perfect victims of ‘vultures’

Trump wants to implicate China in US attacks against global order

Higher education becoming again a privilege of the wealthy?

From coca to cocoa: three lessons from Peru on how farmers can leave the drug trade behind

European Citizens’ Initiative: Commission registers ‘Mandatory food labelling Non-Vegetarian / Vegetarian / Vegan’ initiative’

Jo Cox’s murderer believed the ‘leave’ campaign leaders that the ‘remain’ vote is treason

A Europe that Protects: Commission calls for continued action to eradicate trafficking in human beings

‘Brutal weather’ continues as Rohingya refugee children endure devastating rainfall in Bangladesh

Humanity ‘at a crossroads’ as damage to planet poses growing risk to health, UN environment agency warns

Why rich countries are seeing more poverty

Secretary-General condemns attacks on UN peacekeepers in Mali

Climate change is destroying a barrier that protects the US from hurricanes

We need a new Operating System for the Fourth Industrial Revolution

Retirees will outlive their savings by a decade

Have Europe’s Ukrainian wounds begun to heal?

Can ECB’s €60 billion a month save Eurozone?

EU to fail 2050 Green targets due to lack of European citizens’ engagement

Why the Greeks forgave Tsipras’ pirouettes around austerity and voted again for SYRIZA

Global Leaders Take The Stage At MWC Shanghai 2019, in association with The European Sting

China is now heavily endorsing its big investment flow in the Central Eastern European (CEE) countries

A day in the life of a refugee: the role of nations and citizens of the world

European financial values on the rise

“Leaked” TTIP document breaks post 8th negotiations round silence and opens door to critics

Countering illegal hate speech online – EU Code of Conduct ensures swift response

As Dubai switches on its first 5G, what is all the fuss about?

These are the 3 key skill sets workers will need to learn by 2030

Charlie’s tragedy energized deeper feelings amongst Europeans; back to basics?

International trade statistics: trends in first quarter 2019

Drastic deterioration in security across Burkina Faso as 70,000 flee their homes in past two months, UN warns

European Solidarity Corps: three years on

CLIMATE CHANGE FOCUS: Cutting emissions, one bog at a time

An FTA between EU-US to hurt South Korea

Collaboration and connectivity at ITU Telecom World 2019

The US banks drive the developing world to a catastrophe

Future of EU farming: MEPs push for modern common policy with fair funding

Refugee crisis: Commission proposes a new plan urging EU countries to help Italy

Will the EU be condemned by the International Criminal Court for violating migrants’ human rights?

EU and US close to an agreement on data sharing amid European citizens’ concerns

Reinforcing EU border security: Visa-exempt travelers will be pre-screened

The next start-up cities that will transform the global economy

‘Terminator’ warlord Bosco Ntaganda sentenced to 30 years in prison for DR Congo atrocities

ECB: Euro area should smooth out the consumption and income shocks of its members

The current devaluation of primary health care professionals

Youth Internationalization: part of everyday life in JADE

Building social good – lessons from an Asian giant

Why the 21st century’s biggest health challenge is our shared responsibility

Norway has successfully enforced its foreign bribery laws but faces potential obstacles

New EU rules to boost crowdfunding platforms and protect investors

Why people with disabilities are your company’s untapped resource

Haiti stands ‘at the crossroads’ between peacekeeping, development – Bachelet urges strengthened ‘human rights protection’

Step up action to protect the planet during wartime: UN environment chief

Guterres says justice must be done following deadly Burkina Faso convoy attack

Monsanto lawsuit ruling a ‘significant recognition’ of victims’ human rights, say UN rights experts

Nordic companies prove doing good is good for the bottom line

Suffering of thousands of war-affected Syrian children ‘unprecedented and unacceptable’

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s