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.

Douglas E. Castle

Sponsored By:
ICS - International Connection Services
CFI - CrowdFunding Incubator LLC
Global Edge Technologies Group LLC

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THE OPENING AFRICAN MARKET - AN INVITATION.

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Dear Friends:

A recent bulletin from EX-IM Bank made it clear that the Bank, in its wisdom, has elected to renew and expand its Nigerian bank facilities (i.e., its credit insurance and loan repayment guarantee capacity through other banks in order to foster U.S. exports to Nigeria, and to the African nations in general), making it easier and safer for U.S. firms to export goods to Nigeria and to its geographical neighbors. The original bank facility, initiated in June of 2006, was for $300 million. The renewed and expanded facility is, as of this month, $405 million, representing a significant rate of increase over a very short time frame.



As we know (but dislike to admit in polite company), Ex-Im, just like the IMF or Worldbank, is a U.S. sensory organ. It reacts to trends and in response to certain political objectives handed down to it from above. On a much more positive note, Ex-Im is a genuine resource for U.S. exporters and is a facilitator, in its limited fashion, to international trade, as well as to a fortificaion of the United States domestic economy in terms of domestic employment, Balance Of Trade and Balance Of Payments.

At present, Africa represents a rapidly emerging consumer economy, as well as a source of labor (for outsourcing and for establishing production/assembly facilities and business). While Nigeria and numerous other African nations (Zimbabwe, Liberia, and a host of others) are dicey places within which to conduct business, having the support of a local partner as well as that of the local government in power can make the prospect very, very profitable. A terrific place to start is, perhaps in Ghana, because of its seaport and airport access, its strategic position on the continent, its educated population, and its many government financial incentives to Ghana-owned or controlled businesses engaged in international trade. Logistically, Ghana is a good distribution point for the remarketing of goods and products to the rest of Africa with a minimum of complexity or trouble. The city of Accra, for example, has become a very internationalist trade center and economic development zone. English and French are prevalent languages there. And now, back from this commercial break into a brief geopolitical analysis. Ghana also provides a good launchpad for the exportation and importation of goods into and out of the middle east.



In my interpretation, this aggressive move by Ex-Im toward making trade easier with Nigeria symbolizes the wider opening of a door between the U.S. and Africa. Whether it has to do with Darfur guilt, an oil patch or two reputed to be in Nigeria, or a compensatory strategic move toward offsettting some of the growing enmity between the U.S. and the Muslim and European Markets, it does signal a good time to initiate commercial trade and citizen ambassadorship into Africa, which is becoming a more potent, technologically-geared consumer economy, as well as a growing possibility for outsourcing of certain functions now being handled for U.S. companies through India and other countries where costs are increasing as a result of the natural forces of supply and demand.

The Chinese are the pre-eminent vendors and providers to Ghana and some of the other more readily navigable parts of Africa. They have made, and continue to make, a tremendous investment in opening up markets and promoting products. Some pundits even predict that the ultimate economic trade battle between China and the United States will actually take place on the African continent.

If you choose to conduct business with any African country, here are a few pointers:

• Get Ex-Im's help;


• Use OPIC and other credit and political risk insurance;


• Always find a good local partner to ease your way into the African economy and the appropriate social conventions;


• Retain the services of a local accounting firm and a solicitor (lawyer);


• Listen first; speak later;


• Try to be paid in stable, hard currencies (the Euro, USD);


• Open an account with a local bank, as well as with a larger, international one.

And remember...do some detailed research first!

Here are some interesting links: http://www.africaguide.com/, www.wikipedia.org/wiki/Africa, www.nytimes.com/pages/world/africa.

Business with Africa presents some incredible opportunities...this despite the constant turmoil portrayed by the western media. I do not deny that there is a great deal of trouble on the Continent -- but there are, as in all pioneering efforts, riches to be claimed. I wish you good fortune and interesting times. As always, I can be reached at FreeDECastle001@yahoo.com with any questions, or to share and enjoy reports of your successes.

Faithfully,

Douglas Castle, Internationalist