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Policy framework Governing Hi-Tech trade between India and the US Presentation by Dr. Amit Mitra Secretary General, FICCI 18 th Nov 2004 Washington DC.

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Presentation on theme: "Policy framework Governing Hi-Tech trade between India and the US Presentation by Dr. Amit Mitra Secretary General, FICCI 18 th Nov 2004 Washington DC."— Presentation transcript:

1 Policy framework Governing Hi-Tech trade between India and the US Presentation by Dr. Amit Mitra Secretary General, FICCI 18 th Nov 2004 Washington DC USA

2 US India Trade Characterised by trade surplus in favour of India. US trade deficit is likely to be in the range of $ 10 billion in the current fiscal year 2004 vis-à-vis India Characterised by trade surplus in favour of India. US trade deficit is likely to be in the range of $ 10 billion in the current fiscal year 2004 vis-à-vis India Recent trend in surge of US exports to India – increased by 21 % in 2003 and by 21 % in the first 3 quarters of 2004. Recent trend in surge of US exports to India – increased by 21 % in 2003 and by 21 % in the first 3 quarters of 2004. Trade deficit of USA can be bridged by High Tech exports Trade deficit of USA can be bridged by High Tech exports

3 Through HTCG … Hi-tech trade has been identified as an area of natural synergy with special focus on liberalizing the policies and regulations governing the processes Hi-tech trade has been identified as an area of natural synergy with special focus on liberalizing the policies and regulations governing the processes The positive outcomes /case studies in this endeavor can stimulate and can serve as the benchmark for progress elsewhere The positive outcomes /case studies in this endeavor can stimulate and can serve as the benchmark for progress elsewhere We are exploiting a vast untapped area of High-Tech commerce which would surely impact our trade statistics positively We are exploiting a vast untapped area of High-Tech commerce which would surely impact our trade statistics positively

4 In the Indian Context High-Tech trade and investment is an area of mutual interest and advantage, Research and Development a big thrust area High-Tech trade and investment is an area of mutual interest and advantage, Research and Development a big thrust area Indian economy is in a high growth trajectory and has the human capital advantage and the competitive edge in industries such as manufacturing, defense, biotech, software, design etc. Indian economy is in a high growth trajectory and has the human capital advantage and the competitive edge in industries such as manufacturing, defense, biotech, software, design etc.

5 Constraints faced by the Indian Industry The US Licensing Regime The US Licensing Regime Lack of transparency Lack of transparency Urgent need for outreach Urgent need for outreach

6 Issues in Defense Despite reduction in licenses by the US Govt in practice there are road blocks that still exist for US Industries discouraging them to interact freely with Indian companies and establish joint co-operation. Despite reduction in licenses by the US Govt in practice there are road blocks that still exist for US Industries discouraging them to interact freely with Indian companies and establish joint co-operation. The US Export licensing system for India should allow other countries using US made products to easily export their products and technologies to India The US Export licensing system for India should allow other countries using US made products to easily export their products and technologies to India

7 Issues in Defense Sector Opportunities exist in this sector which can be harnessed through public private partnership in areas such as: Opportunities exist in this sector which can be harnessed through public private partnership in areas such as: advanced photonics,advanced photonics, munitions guidance,munitions guidance, special armor alloys,special armor alloys, specialized EM Wave absorbent/ low radar signature materialsspecialized EM Wave absorbent/ low radar signature materials etcetc

8 Review the list of items presently listed in the negative list Several of the items are outdated items Several of the items are outdated items Example 1: on the one hand, presently there is a ban on imports of computers of more than 190mega processing cycles but on the other hand you can independently buy a chip which is faster upto 12000mega flops Example 1: on the one hand, presently there is a ban on imports of computers of more than 190mega processing cycles but on the other hand you can independently buy a chip which is faster upto 12000mega flops Example 2: in many cases there are provisions where complete sub-systems can be imported, especially in case of super-computers and equipments for the space and defense industry, but there is a ban on the import of spare parts. Example 2: in many cases there are provisions where complete sub-systems can be imported, especially in case of super-computers and equipments for the space and defense industry, but there is a ban on the import of spare parts.

9 Restrictive policies for Foreign Companies in the US There are active restrictions on buying of American companies in the industries with strategic role and sensitivities in the context of national interests: like civil aviation, telecom, etc There are active restrictions on buying of American companies in the industries with strategic role and sensitivities in the context of national interests: like civil aviation, telecom, etc Yet there is a demand to open all strategic sectors in India Yet there is a demand to open all strategic sectors in India There should be similar reciprocity in regulations and policies as applicable to companies in both the destinations. There should be similar reciprocity in regulations and policies as applicable to companies in both the destinations.

10 Issues in Biotechnology Free flow of biological materials between India and the US when used for pure research purposes Free flow of biological materials between India and the US when used for pure research purposes USFDA to recognize the clinical trials conducted in India USFDA to recognize the clinical trials conducted in India ATCC should set up their subsidiary office in India ATCC should set up their subsidiary office in India

11 Need of the hour is to leverage the New Era in US-India Relations Through a growing process of confidence building and consultation Through a growing process of confidence building and consultation Partnership in strategic industries which are dual in nature like military and intelligence, services etc. Partnership in strategic industries which are dual in nature like military and intelligence, services etc. Constant realization of the need to work with each other to foster understanding and partnerships to promote and maintain peace, liberty and prosperity Constant realization of the need to work with each other to foster understanding and partnerships to promote and maintain peace, liberty and prosperity

12 Road Ahead Need for greater transparency Need for greater transparency Dept of Commerce has returned licenses worth USD 230,000 for exports as they were not requiredDept of Commerce has returned licenses worth USD 230,000 for exports as they were not required Out reach programs Out reach programs In the US to create more awareness about hi Tech export possibilities to India and the reducing control regimesIn the US to create more awareness about hi Tech export possibilities to India and the reducing control regimes In India to create awaress about the easy availability of technologies and the reducing control regimesIn India to create awaress about the easy availability of technologies and the reducing control regimes FICCI has proposed doing seminars in various cities in India jointly with the US Embassy and has also made available the use of its website to extensively disseminate developments FICCI has proposed doing seminars in various cities in India jointly with the US Embassy and has also made available the use of its website to extensively disseminate developments

13 THE NEED OF THE HOUR IS TRANSPARENCY AND OPENNESS


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