India, United States Want to Quadruple Trade: Biden

The vice president sees opportunities to expand trade, but recognizes that impediments remain.

American vice president Joe Biden, the first to visit India in three decades, spoke of the two countries’ mutual desire to quadruple bilateral trade at a speech given in Delhi last week.

“Our bilateral trade has increased fivefold to $100 billion over the past thirteen years. We see tremendous opportunities (in India) and there is no reason that if our two countries make the right choices, trade cannot grow fivefold or more,” Biden said.

However, he acknowledged a lot needed to be done to remove trade barriers and that India needed to address its “inconsistent” tax system and barriers to market access.

Biden also stated that India has the full support of the United States for securing a seat on the United Nations Security Council and that Indian prime minister Manmohan Singh has been invited to the White House to meet with President Barack Obama at the end of September to discuss this particular topic, on top of other trade related issues.

In terms of immigration and education, Biden announced that the United States Congress is considering increasing the number of temporary visas available to skilled Indian nationals to come to the United States to live, study and work.

Biden later spoke at the Bombay Stock Exchange where he again stressed the need for Indian and American businessmen to work more closely together. Focusing on the need for greater ease in doing business with India, he called for further economic reforms, highlighting the frustrations many American businesses have had as they seek to tap into India’s potentially huge consumer market.

“India is no longer an economic island and will continue to rise as an economic power,” Biden said as he extolled the economic growth of the country. “However, significant challenges and problems persist. It is time we take this relationship to a new level to achieve our shared vision.”

“Imagine what our two countries can achieve together, not only for one another but for the economic and political stability of the region,” Biden added, while stressing the shared common values between the United States and India — democracy, human rights and an independent judiciary.

In the course of Biden’s two day visit, he was expected to meet with leading Indian industrialists and business people and to attend an event at the Indian Institute of Technology before flying on to Singapore.

The United States and India have a double tax treaty in place and although it dates back to 1991, it is still a useful tool to examine for tax benefits that American companies may enjoy when considering business in India.

“I have raised the issue of updating the Indo-American DTA with the American commercial attaché in Delhi and we understand that this is something that is being considered. American trade and investment in India is significantly increasing and we have already seen the likes of Ford commit to manufacturing vehicles in India for both the domestic market and export,” comments Chris Devonshire-Ellis, managing partner for Dezan Shira & Associates in India. “India remains a huge potential target for American investors both looking for market access and for export manufacturing. We welcome Vice President Biden’s comments and look forward to the development of American trade and investment with India.”

This story first appeared at India Briefing, July 25, 2013.