CII identifies major areas for Indo-U.S. cooperation

By Our Special Correspondent

NEW DELHI, AUG. 29. The Confederation of Indian Industry (CII) has identified 10 major sectors for Indo-U.S. cooperation to boost trade and investment between the two countries. These include financial services, energy, environment, small sector, biotechnology, information technology, drugs and pharmaceuticals, telecommunications, infrastructure and research and development.

India, according to CII, should at least touch $15 billion of exports to the U.S. within in the next five years and $25 billion within the next ten years. This will need a big push from industry and Government especially in the services sector where India has an advantage.

It says today economy drives relationship among nations and Indo- U.S. trade will have to be used to build a lasting alliance among the two nations. Market access holds the key and the faster the two countries realise this the quicker will they reach the road to higher cooperation.

According to a CII statement, what is of concern to India is that the volume of Indo-U.S. bilateral trade remains a small fraction of U.S.'s global trade. While U.S. exports to India account for nearly 12 per cent of non-oil imports and it is the destination of 18.9 per cent of India's exports, U.S. trade turnover with India constitutes less than one per cent of its global trade. However, India's share in U.S. imports has been rising gradually and increased from 0.84 per cent in 1997 to 0.90 per cent in 1998. Two-way trade, which now stands at over $12.5 billion, reflects an increase of nearly 100 per cent since 1992.

However, the CII points out that when compared to the overall U.S. trade of over $1,750 billion for merchandise trade and $435 billion of service trade in 1999, the Indian performance is dismal. U.S. merchandise imports in 1999 are at $1,059 billion and service imports at $182.3 billion. Even if India aims at a 10 per cent share of the U.S. market in the next 10 years, it will achieve a total export of $120 billion of merchandise and service exports. This translates into over $80 billlion increase in exports to just one large market.

On the investment front from 1991-99 total inflows of U.S. investments are at $2.5 billion from an actual approval of $13.5 billion. Compare this with China, the CII says, the total approvals or what is described as ``contracted FDI'' from the U.S. to China from 1991-98 amounts to about $40 billion. The total amount utilised from this is about $21 billion. India should also target to get at least $15 billion of U.S. FDI in the next five years and $25 billion in the next 10 years.

The composition of India's exports has undergone a change over the years, it is pointed out. Exports to the U.S. have been rising mainly on account of significant increases in export of diamonds, textiles and ready-made garments, machinery, carpets, footwear and leather products, dyes, iron and steel products, chemicals, edible fruit and nuts and spices, coffee and tea. Six items, namely, textiles and clothing, cut and polished non- industrial diamonds, carpets, shrimps and prawns, footwear, leather goods and cashew nuts, account for about 75 per cent of total Indian exports to the U.S.

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