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 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

Measles claims more than twice as many lives than Ebola in DR Congo

COP21 Breaking News: Conference of Youth Focuses on Hard Skills to Drive Greater Climate Action

Bolivia: UN underlines support for ‘credible, transparent and inclusive’ election

On Youth Education: “Just a normal day in the life of a medical student”

Investment Plan for Europe: European Investment Bank to provide BioNTech with up to €100 million in debt financing for COVID-19 vaccine development and manufacturing

Wars have rules: 5 things the UN humanitarian chief wants countries to tackle so human suffering in conflict can be minimized

Continue ‘their mission’ urges UN chief, as the victims of the Baghdad bombing are remembered, 15 years on

Global public-private collaboration tackles cybersecurity skills gap

Mobility package: Transport Committee backs deal with EU Ministers

Can the EU really make Google and Facebook pay publishers and media?

Eurozone guarantees all banks with…taxpayers’ money

Nauru President warns of possible climate change ‘economic Armageddon’

Trump aims trade offensive solely to China, renews truce with EU

UN underlines need for dialogue to resolve Israel-Palestine conflict

Security Council extends mandate of UN Interim Force in Lebanon for a year

5G and the growing need for national CTOs

FROM THE FIELD: Enslaved Guatemalan indigenous women wait for reparations

COVID-19 reminds us of the crucial role nurses play

Coronavirus: Member States agree on an interoperability solution for mobile tracing and warning apps

‘Transformational benefits’ of ending outdoor defecation: Why toilets matter

UN health agency to gauge global threat, as China confirms coronavirus transmission between humans

20 years on from landmark Mine Ban Treaty, dangers on the rise to life and limb

UN health agency launches week of action to ban lead paint

These countries have some of the highest voter turnout in the world

Property regimes for international couples in Europe: new rules apply in 18 Member States as of today

MEPs condemn attacks on civilians, including children, in Yemen

Germany may prove right rejecting Commission’s bank resolution scheme

Do we judge robots on their colour? This study says we do

The European Parliament rewrites the EU budget in a bright day for the Union

President David Sassoli to visit Skopje: “Remain on the European track”

Brexit negotiations: Can May’s Britain bounce back?

Eurozone: Despite anemic growth and shaky banks marks record trade surplus

UN investigates systematic sexual violence across South Sudan

Mobile 360 Africa 11-13 July 2017

This start-up is making a palm oil alternative from used coffee grounds

Deeper reforms in Germany will ensure more inclusive and sustainable growth

EU Facility for Refugees in Turkey: EUR 400 million Special Measure on education adopted

European Defence Fund: €205 million to boost the EU’s strategic autonomy and industrial competitiveness

State aid: Commission approves €3 billion Portuguese guarantee schemes for SMEs and midcaps affected by Coronavirus outbreak

How COVID-19 is making companies act for the long term

How can the EU hit net-zero emissions?

Here’s why the world’s recovery from COVID-19 could be doughnut shaped

Antitrust: Commission consults stakeholders on guidance for national courts when handling disclosure information

IMF: All you want to know about Argentina

The issues of practicing medicine in Pakistan

Resolving Israel-Palestinian conflict, ‘key to sustainable peace’ in the Middle East: Guterres

European Fund for Transition to support more workers made redundant

These are the most desirable cities for overseas workers

Syria: UN chief warns Idlib offensive may set off ‘humanitarian catastrophe’

Peace operations benefit from improved cooperation between the UN and troop-providing countries, says peacekeeping chief

At epicentre of Indonesia disaster, Guterres praises resilience of Sulawesi people

The ethical dilemmas of medicine

MWC 2016 LIVE: The top 5 themes of this year’s Mobile World Congress

Nuclear testing has ‘disastrous consequences’ for people and planet, General Assembly told

Security Council welcomes Yemen breakthrough, but lasting peace remains a ‘daunting task’

Jeroen Dijsselbloem new Eurogroup president

At last some rules on banks

Most leaders are missing this crucial character trait

Parliament backs measures to cut e-commerce VAT fraud

5 ways to break down the barriers for women to access leadership roles

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