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India Mission a “Success on Every Level” A business development mission to India, led by Under Secretary of Commerce Franklin L. Lavin, gave more than 250 U.S. businesspeople the opportunity to learn about India’s business potential. by John Ward More than 250 executives from 200 U.S. companies joined Franklin L. Lavin, under secretary of commerce for international trade, this past December on a business development mission to India. The mission began with a two-day business summit in Mumbai on November 29 and 30. On December 4 and 5, 2006, the summit continued with spin-off missions in Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi. In addition to export promotion activities, the trip also involved trade policy meetings with Indian government officials. (Story continues below.)
The mission was the largest of its kind ever organized by the U.S. government, and it gave participating companies the chance to fully explore business opportunities in India. Lavin noted in remarks made to the Indo-American Chamber of Commerce in New Delhi on December 5, 2006, “With an open and growing economy, and a billion potential customers, the Department of Commerce believes [that] in order for American companies to be globally competitive, they need to be thinking about India.” Fulfillment of Presidential Visit The mission to India came as a significant step in fulfilling a mandate given to the U.S. Department of Commerce and the Indian Ministry of Commerce and Industry in March 2006, when President George W. Bush met with Indian Prime Minister Manmohan Singh in New Delhi during a state visit. In the course of their talks, the two leaders charged their respective ministries with promoting commercial and business ties and improving the policy framework between the two countries. A Growing Economy The business mission took place at a propitious time for U.S.–Indian commercial relations. India has the 10th-largest economy in the world and has been enjoying high rates of economic growth during the past several years—about 8 percent per year from 2002 to 2005. Two-way trade between the United States and India has also been growing. In 2005, total bilateral trade was $26.77 billion. That same year, U.S. exports to India were $7.96 billion, a 30.3 percent increase over 2004. Also in 2005, imports from India were $18.81 billion, a 20.8 percent increase over the previous year. India now ranks as the 22nd-largest export market for the United States. Matchmaker Events Help First-Time Business Visitors The trade mission was an opportunity to build on the existing trade relationship, and mission participants were clearly pleased with the results. Jennifer Thompson, director of international relations for Oshkosh Truck Corporation of Oshkosh, Wisconsin (a manufacturer of fire trucks, cement mixer trucks, and specialty airport vehicles), noted that before coming to India, her company “thought there were opportunities … but now we know there are opportunities here.” She summed up the business environment in India as “a very warm climate for U.S. businesses.” Among the highlights of the five-day mission were the 600 matchmaker events organized by U.S. and Foreign Commercial Service staff members in the spin-off cities. Those events were nearly identical to the Commercial Service’s Gold Key Service, which arranges one-to-one meetings with prescreened distributors, professional associations, government contacts, and licensing or joint venture partners. According to participants, the matchmaker events were especially fruitful in establishing business contacts in India. Malcolm Butters of Butters Construction and Development (an industrial developer in Coconut Creek, Florida) participated in one such event held in Hyderabad on December 4. He noted, “[I] couldn't have gotten a better meeting schedule if I had been here for 30 years." Civilian Nuclear Technology The participation of a number of U.S. civilian nuclear technology companies in the trade mission marked a historic first. Representatives of 18 U.S. firms and organizations in that sector met with potential Indian buyers, such as power authorities and government officials, to lay the groundwork for future sales. Their participation in the trade mission came because of an agreement reached in July 2005 by President Bush and Prime Minister Singh to allow the sale of civilian nuclear technology to India. Congress subsequently passed legislation allowing those sales to proceed, and President Bush signed the law on December 18, thus completing the first steps toward ending a 30-year moratorium on such sales. A number of safeguards remain as well as regulatory and compliance issues that must be resolved before any sales to India can be made. Challenges Although India clearly presents many opportunities to U.S. businesses, significant hurdles need to be resolved if the U.S.–India trade relationship is to grow. Oshkosh Truck’s Thompson noted that U.S. companies looking to enter India must be extremely patient when taking a long-term approach to business in India. Under Secretary Lavin spoke about several of the systemic and policy challenges during his visit, noting that they were being addressed in negotiations held under the auspices of the U.S.–India Commercial Dialogue, the main mechanism for negotiating trade policy matters. Those challenges include the following:
“What I would like to see,” said Lavin in a speech on December 19, 2006, to the Asia Society about prospects for commercial reform in India, “is for every Indian company to have as much access to the American market as possible, and for every American company to have access to [the Indian] market as possible.” Next Steps Participants agreed that many good business contacts were made during the mission. The Department of Commerce will be tracking the results and following up with the participating companies. According to Lavin, “This mission was a success on every level, and I believe its dividends will be paid with an expanded economic relationship long into the future.” John Ward is a senior editor in the International Trade Administration’s Office of Public Affairs.
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