Will President Trump Clash with India’s Prime Minister on Trade?

June 26, 2017  |  No Comments  |  by Nicole àBeckett  |  Blog

Today, President Donald Trump will meet with India Prime Minister Narendra Modi. Leading up to the meeting, U.S. lawmakers on either side of the aisle have urged the President to press Modi on the removal of barriers to U.S. trade and investment in India (The New York Times). According to these lawmakers, despite the high-level engagement with India, the country has not eliminated major barriers to trade and investment and has not been prevented from imposing new barriers. These barriers include high tariffs, poor protection of intellectual property rights, and inconsistent and non-transparent licensing and regulatory practices.

In a letter to the President, lawmakers claimed that a wide range of sectors from India’s economy remain “highly and unjustifiably” protected, making India a very difficult place for U.S. companies to do business (Reuters). their opinion, the bilateral economic relationship does not perform efficiently due to India’s hesitance in enacting vital market-based reforms.

Major sectors affected are solar and information technology products, telecommunications equipment and biotech products. Further, there are limitations on foreign participation professional services, in addition to numerous restrictive foreign equity caps. The lawmakers’ list of grievances is long and growing.

Currently, Prime Minister Modi is running a “Make in India” campaign as an attempt to boost domestic manufacturing and create jobs (Bloomberg). This may make it difficult for he and the President to reach an agreement, as President Trump’s “America First” agenda creates a clash of economic nationalisms. However, President Trump has called Modi a “true friend” on Twitter, and Modi has expressed excitement in anticipation of the meeting.

For updates on the meeting and information on other relevant trade issues, follow Mercatura Global on Twitter.

India: 4th Quarter Economic Growth Drives Global Trade

November 18, 2016  |  No Comments  |  by Nicole àBeckett  |  Blog

The WTO World Trade Outlook Indicator expects global trade to pick up slightly in the fourth quarter of 2016, as air freight in particular has shown strong recent growth. These projections positively benefit India, whose exports are starting to recover after they fell from December 2014 until May 2016. Indian outbound shipments grew by over 4% in September to reach $22.9 billion, and global trade improvements are expected to sustain this increase in India during November and December (The Economic Times). 

WTO trade increase projections coincide with a recent announcement from Indian Prime Minister Narendra Modi about the demonetization of the two most valuable notes: 500 and 1000 rupees. Indians will have one year to exchange cash for newly printed notes at banks or to deposit it in their accounts (The Economist).  The new directive addresses the problem of “black money” in India, which includes cash that is unaccounted for and outside the formal financial system. The government will focus on deposits of greater than 250,000 rupees to target “black money” hoarders and force them to present or renounce their savings. As the 500 and 1000 rupee notes represent 86% of all cash in circulation, many cite this change as a path to smartphone apps and card-based payments for the country. India recently introduced the Unified Payments Interface, a system that makes mobile phone payments easier for individuals and businesses, to accompany the shift in currency. 

As India’s economy continues growing, it is now the perfect time to begin investing in India. If you are interested in entering the Indian market and growing your exports, contact us today. 

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