Monday, April 15, 2013

U.S. and INDIA: A Tighter Alliance

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There is an ever-increasing warmth between these two countries, which is economically and politically beneficial to both parties. While those of us who are readers of The Internationalist Page Blog or just categorically Internationalists, this is a bit ironic because India has been a substantial outsourcing destination for U.S. companies and is occasionally maligned for "taking jobs away from Americans." While in a sense this might be true, the savings (arbitraging the cost of Indian labor against the much higher cost of American labor) to certain U.S. companies has helped to keep them in business in a time of extraordinarily low capital availability, and has saved some employees by keeping their employers in business.

India is also becoming more of a consumer market, and some United States companies are offsetting the outflow of dollars to India by selling U.S.-produced products to the growing middle-class in India's confusing but nonetheless fast-emerging economy.

In terms of politics, both countries have their concerns about the spread of radical Islam and terrorism from Pakistan, Afghanistan and other nations in the region.

While the cultures are quite different, both countries have some serious security and economic concerns in common, making them wonderful international trade partners.

The's a definite warming up of relations on all fronts between the two nations.

This warmth is signified (in a monetary marriage) in an excerpt below from Chairman Fred Hochberg's Quarterly Ex-Im Newsletter Report:
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Ex-Im Bank Signs $500 Million Agreement with ICICI  Bank

Chairman Hochberg traveled  to India in January on a business-development mission. While in India, the  Chairman signed a $500 million Memorandum of Understanding (MoU) with ICICI  Bank pledging cooperation on financing projects beneficial to both India and  the United States. Up to $500 million in new transactions could be financed as  a result of the initiative.

ICICI Bank is  India's largest private sector Bank and this MoU will support the financing of  U.S. goods and services by ICICI Bank's customers. Ex-Im and ICICI Bank see  specific opportunities in air traffic control and infrastructure; railway;  urban metro and port development projects; power generation, including  renewable energy; oil and gas projects; and water treatment projects.

"India  is an emerging market that provides enormous opportunities for U.S. companies," said Chairman Hochberg. "This $500 million MoU represents a  partnership between our two countries and will help ensure that American  companies and workers help India meet its growing infrastructure needs, while  creating jobs here at home."

Speaking on the  occasion, Chanda Kochhar, MD & CEO, ICICI Bank said, "ICICI Bank is pleased  to be working with the U.S. Ex-Im Bank towards the growth of India-US trade.  This MoU combines the strengths and expertise of both our institutions, helping  U.S. Ex-Im to leverage ICICI Bank's strong corporate relationships and project  finance capabilities, and ICICI Bank to offer diverse funding options to its  clients."

Ex-Im Bank's  authorizations in India continue to increase dramatically, bringing the Bank's  total exposure to India to $8.5 billion as of the end of the first quarter in  FY 2013. India is currently the Bank's second largest market in terms of  overall exposure. Last year, US Ex-Im Bank financed 17 percent of all U.S.  exports to India.
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As a trend-spotter and the Author of The Global Futurist Blog, I would expect this warming trend to continue over the next several years. Personally, I am hoping it will. Both countries can help each other, and the U.S. needs to cultivate some genuine allies in the region.

As always, thank you for reading me, and thank you for sharing my articles with your colleagues through your vast, expansive social media networks.


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