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.”

the sting Milestones

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

5 creative alternatives to plastic packaging

UN chief condemns student abductions in north-west Cameroon

How the gender commuting gap could be harming women’s careers

These 11 companies are leading the way to a circular economy

Here’s how we get businesses to harmonize on climate change

A Sting Exclusive: “Regional Policy: a fully-fledged investment policy”, Commissioner Cretu reveals live from European Business Summit 2015

How the mobile industry is driving climate progress on the scale of a major economy

These countries are leading the way in green finance

Movius @ MWC14: Discussing novel Communications Applications over a “CAFÉ”

International Day of the Midwife: 5 things you should know

UN Security Council welcomes results of Mali’s presidential elections

UNICEF warns of ‘lost generation’ of Rohingya youth, one year after Myanmar exodus

Residents and visitors to this Dutch neighborhood could share a pool of cars and bikes

Rising insecurity in Central Africa Republic threatens wider region, Security Council told

Medical education during COVID-19 pandemic

Horn of Africa: UN chief welcomes Djibouti agreement between Eritrea, Ethiopia and Somalia

Trump’s withdrawal from the Paris climate deal is bad for US business. Here’s why.

Mental distress during the pandemic: is there a way out?

Social, cultural diversity ‘an enormous richness, not a threat’ Guterres declares calling on investment for a harmonious future

Commission reaches agreement with collaborative economy platforms to publish key data on tourism accommodation

European Commission presents comprehensive approach for the modernisation of the World Trade Organisation

Migration crisis, a human crisis after all

EU consumers will soon be able to defend their rights collectively

A Sting Exclusive: “Climate Change needs to be demystified”, Anneli Jättenmäki Vice President of European Parliament underscores from Brussels

Commission statement on the European Remembrance Day for Victims of Terrorism

Ηealth’s foundation is falling apart: what can we do about it?

MWC19 Wrap Up, in association with The European Sting, GSMA’s Brussels Media Partner for the 6th Consecutive Year

Does hosting a World Cup make economic sense?

Cyprus tragedy reveals Eurozone’s arbitrary functioning

5 inventions that could transform the health of our ocean

Yemen: ‘A great first step’ UN declares as aid team accesses grain silo which can feed millions

It’s time to end our ‘separate but unequal’ approach to mental health

Education remains an impossible dream for many refugees and migrants

iSting: Change Europe with your Writing

Now doctors can manipulate genetics to modify babies, is it ethical?

One more country to test the EU project: Kaczynski’s Poland

4 ways leaders are driving innovation in the public sector and revolutionising governance

10 of Albert Einstein’s best quotes

Will Boris Johnson’s victory lead to a no-deal Brexit or is there still time?

How 2020 taught businesses to place empathy before profit

Coronavirus COVID-19 wipes $50 billion off global exports in February alone, as IMF pledges support for vulnerable nations

Korea should improve the quality of employment for older workers

These companies can recycle nearly anything, from cigarette butts to fax machines

Cancer research put at risk by General Data Protection Regulation? The possible dangers of a data privacy EU mania

75 years after Auschwitz liberation, antisemitism still threatens ‘foundations of democratic societies’

This new form of currency could transform the way we see money

The Japanese have a word to help them be less wasteful – ‘mottainai’

Look no hands: self-driving vehicles’ public trust problem

Why Eurozone can afford spending for growth

Lack of involvement, or lack of opportunities?

3 reasons why responsibly-deployed technology is key to the COVID recovery

As Saudi women take the wheel, UN chief hopes end of driving ban creates more opportunities for kingdom’s women and girls

This is what the world’s CEOs think about the global outlook

EU Budget 2019: no deal before the end of the conciliation period

Sudan Partnership Conference: EU mobilises more support for Sudan’s transition

MWC 2016 LIVE: T-Mobile US reveals 5G trial plans

Parliament cuts own spending to facilitate agreement on EU budget

Foreign Affairs Council (Trade) of 22/05/2018: EU relations with key trading partners

EU mobilises €21 million to support Palestine refugees via the UN Relief and Works Agency

These photos show some of the world’s smallest things massively magnified

More Stings?

Advertising

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