US may seek more market access
India is America’s 11th largest merchandise trading partner
US President Barack Obama is expected to ask Prime Minister Narendra Modi to provide greater market access for BJP led government’s flagship programmes including Make in India, Smart Cities, sanitation ( Swachch Bharat) and renewable energy, especially the solar energy.
The Union government’s target to provide round the clock electricity to all aloe is expected to provide an investment opportunity of $250 billion in next four to five years. Most of the investment is expected to come from the private sector.
The government is targeting $100 billion investment in renewables and $50 billion in transmission and distribution to create a national grid where power can seamlessly flow.
The smart cities on which India and US are expected to sign an agreement during mr Obama’s visit will entail an investment of $1.5 trillion by 2020.
The US and India are also expected to push towards an agreement on transfer pricing which has emerged as an irritant in business relations.
According to some estimates there are around 250 cases filed by tax department against US companies on transfer pricing. Some of these cases are as old as 2004.
However, the Indian industry, on its part, wants Prime minister Mr Modi to take up the problem faced by Indian IT industry in the US.
“For a large number of Indian professionals going on short-term visits to the US is the issue of the absence of totalisation agreement which results in billions of dollars of their hard earned wages being deducted in the US for the social security which they are not able to utilise,” ASSOCHAM said .
It pointed out that the moment the word outsourcing is uttered in the US, a wrong impression is sought to be created as if it is India which is taking away their jobs.
“But the fact is that a large number of Indian IT companies are investing heavily in the US, creating job opportunities for the Americans. The back-end setups in India are parts of supply chains of the US companies,” it added.