As bilateral relations between India and the U.S. deepen, American firms in India have expanded from retail and information technology to many new, strategic sectors such as defense and energy. The current climate offers immense opportunities for India, the United States, and the private sector, but harnessing this opportunity requires strategic policy choices and actions. Getting these policy choices right demands a multi-actor and multi-sectoral approach.
On December 16th, ORF America, in partnership with the U.S. India Business Council (USIBC), hosted a closed-door, virtual roundtable on India's integration in global value chains (GVCs). The session brought together executives from some of the most prominent multinational companies present in India today. The purpose of this session was to collate and document the experiences and views of American multinational firms operating in India to help inform policy options for India’s integration into GVCs. Participants discussed constraints and solutions for integration into India’s domestic market and exporting from India to the world.
Several key insights were illuminated through the discussion. Including that while it is clear that the Indian government is saying the right things vis-a-vis business and trade, there is still a significant gap between what is being said and the impact on the ground. The primary concerns on the part of businesses discussed during the session include: (1) import restrictions and local content requirements (without local suppliers) are strangling exports and export potential, (2) regulatory uncertainty and overregulation are making India less competitive compared to other manufacturing centers, and (3) there are still significant costs associated with inadequate infrastructure and logistics in India.
The session is a part of a larger project undertaken by ORF on India's GVC integration. The project will convene other stakeholders, including policymakers and businesses over the coming months, to glean insights on what policy choices are available to India and what they will mean for India’s GVC integration. ORF’s research will culminate in a report in 2022.