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

35th ACP-EU Assembly: migration and demographics will dominate the debate

EU adopts rebalancing measures in reaction to US steel and aluminium tariffs

80 adolescents a day will still die of AIDS by 2030, despite slowdown in epidemic

UN General Assembly President defends ‘landmark’ migration compact

European Institute of Innovation and Technology: Commission welcomes political agreement on strategy for 2021-2027

Cancer is a growing global threat and prevention is key, UN study shows

Unemployment and immigrants haunt the EU; who can offer relief?

Coronavirus: Commission presents practical guidance on implementing the temporary restriction on non-essential travel to the EU

Behind the firewall: a discussion on the evolution of cybersecurity in the utility industry

Meet the robot fighting back against coral reef destruction

Female doctors throughout times

Aung San Suu Kyi appears at ICJ as UN rights expert urges greater protection for Myanmar activists

AI could be a silver bullet for healthcare in ASEAN

Member States’ compliance with EU law in 2019: more work needed

UN forum to bring ‘big space data’ benefits to disaster response in Africa

Galileo and EGNOS programmes back in orbit powered with €70 billion

Harmonised Unemployment Rates (HURs), OECD – Updated: February 2020

DR Congo: efforts to control Ebola epidemic continue, UN food relief agency doubles assistance to affected people

‘New tech’ business model threatens decent work conditions, warns UN

In polarized America, a new divide looms

MEPs adopt greener funds for regional development and cooperation

Friday’s Daily Brief: hunger in North Korea, human rights in Iran, updates on DR Congo and Benin

How youth and technology can drive Africa’s COVID-19 response

Around 52 million in Near East, North Africa, suffering chronic undernourishment, new UN food agency report reveals

‘Historic moment’ for people on the move, as UN agrees first-ever Global Compact on migration

Home-office, HQ, hybrid or work-from-anywhere? This is what businesses are planning

Drones are saving lives in Tanzania’s remote communities

EU-Singapore free trade deal gets green light in Trade Committee

Hatred ‘a threat to everyone’, urges Guterres calling for global effort to end xenophobia and ‘loathsome rhetoric’

Brexit: the time has come for the UK to clarify its position

Libya detention centre airstrike could amount to a war crime says UN, as Guterres calls for independent investigation

5G is here: PT Expo China 2019 will be held October 31 – November 3, in association with The European Sting

UN rights experts call on Philippines Government to halt ‘unacceptable attacks’ on Victoria Tauli-Corpuz

‘Worst devastation I have seen,’ says UN refugee envoy Angelina Jolie, as she visits West Mosul

Armed groups threaten every child in Central African Republic, UNICEF warns

Czech PM should resolve his conflict of interest as a matter of urgency say MEPs

Why global collaboration is needed to protect against a new generation of cyber threats

Human rights breaches in Eritrea, Nicaragua and Saudi Arabia

GSMA announces first speakers for Mobile 360 Series-Middle East and North Africa

Ethiopia is Africa’s fastest-growing economy

How to change the world at Davos

Why diversity is critical to media and entertainment – and how to achieve it

West Africa ‘shaken by unprecedented violence’, UN envoy tells Security Council

‘Historic’ new Syria talks should focus on relief for war-weary civilians, says UN negotiator

State aid: the Commission launches an in-depth investigation into the regulation mechanism for natural gas storage in France

ECB steadily continues monetary easing policy as EU economy gains momentum

How revealing the cost of coal makes us all better off

European Youth Forum celebrates 20 years of fighting for youth rights

Energy: EU priority projects should be aligned with 2050 climate objectives

Independent UN rights experts call for ‘immediate investigation’ into alleged Bezos phone hack by Saudi Arabia

Mozambique pledging conference hopes to soften devastating blow of back-to-back cyclones

Estonian Prime Minister Ratas: Europe is a thought that must become a feeling

Catalan Pro-Independence vote: how many hits can Brussels sustain at the same time?

Coronavirus: Commission proposes €4.5 million to support over 5,000 dismissed tourism workers or self-employed in Estonia

Embrace ‘people-centered multilateralism,’ UN-civil society forum urges

EU is not only obsessed with Facebook but also blaims now innocent websites using social plugins to serve democratic dialogues?

The pandemic has damaged youth employment: Here’s how we can help

Same-sex marriages and partnerships should be recognised across the EU

Planetary health and environment for poor populations: how can health professionals help?

Taxation: Commission refers Poland to Court for failing to remove certain tax exemptions on the use of energy products by highly polluting businesses

More Stings?

Comments

  1. butterflytomatomars23293 says:

    That is right, US Secretary of Commerce Wilbur Ross, argued that protecting small bricks-and-mortar retailers would ultimately penalize all of India.

  2. butterflytomatomars23293 says:

    That is right, US Secretary of Commerce Wilbur Ross, argued that protecting small bricks-and-mortar retailers would ultimately penalize all of India.

    https://fdassociates.net/

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

%d bloggers like this: