On Day 1 of India visit, Obama showcases trade deals with US firms
President Obama visited Mumbai, India, Saturday and made a forceful case for free trade. He announced deals totaling nearly $10 billion in new US exports that are expected to create 50,000 new jobs.
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Indian officials and executives also sought to reassure Americans that they were the good guys of international trade – unlike China. Speakers pointed out that India imports more than it exports and generally respects intellectual property rights.
"When you think about China, ask any US CEO or US citizen or Indian citizen – trust doesn't exist. What we have is trust between our two countries," said Mukesh Ambani, chairman of Reliance Industries in Mumbai.
To spur further business deals, Obama promised to loosen US export controls on sensitive technologies.
The details of that deal remain unclear, says William Blair, president of Raytheon India, but it has the potential to further business collaboration in defense, aerospace, and homeland security.
Mr. Sharma, meanwhile, promised in the next few months to announce a new manufacturing policy that will develop "mega-investment manufacturing zones."
But Sharma and several Indian CEOs reminded the at times gung-ho American business executives of India's limitations.
"We are also home to a very large number of poor people," said Sharma. "For us, the emphasis is on inclusive growth where wealth is created and redistributed."
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Building an educated workforce comes slowly
He noted that while India will add 200 million more people to its workforce in the next decade, only 20 to 25 percent of those workers will be skilled.
This is all to remind the US that India will pursue gradual reforms, says Teresita Schaffer, a former State Department specialist in South Asia and a trustee of the Asia Foundation.
"The Indian government is quite cautious when it comes to economic reform. The changes they introduce tend to be stable; they don't get revoked the next year," she says.
That slow approach clearly frustrates some US CEOs like GE's Mr. Immelt. After an Indian CEO said American popular opinion against globalization "scared" him, Immelt pounced.
"There's a trillion dollars of infrastructure investment that's supposed to happen in India that's not happening, and in some ways you guys haven't lived up to your side of the bargain," said Immelt.
If government reforms target infrastructure industries, he said, "there will be so much business for United Technologies, GE, Honeywell, and other companies that the outsourcing debate can take care of itself."