PM Modi’s US Visit: A Sign of India’s Strengthening Economic Ties with the US worth around $6 billion
PM Modi’s US Visit: A Sign of India’s Strengthening Economic Ties with the US worth around $6 billion
Specifically, the 31 MQ9B Predator Drones, the GE 414 jet engines in the defence sector, and Micron’s investments in semiconductors will be the most significant acquisitions from a tactical and practical standpoint.
What possible effects would Prime Minister Narendra Modi’s trip to the United States have on the Indian economy? The defence acquisitions, particularly the GE 414 jet engines and the 31 MQ9B Predator Drones, will be the most important from a tactical and practical standpoint, aside from Micron’s semiconductor expenditures. These transactions total over $6 billion, and semiconductors also have a knock-on impact in bringing in fresh talent and creating jobs.
Prime Minister Narendra Modi’s visit to the United States has strengthened bilateral ties between the two nations and paved the way for substantial economic growth and collaboration. With deals worth approximately $6 billion and numerous intangible gains, this visit has the potential to foster long-term partnerships and unlock economic spin-offs for both India and the US. In this article, we will delve into the details of the key agreements and analyze the potential benefits they bring.
- Energy and Climate Cooperation:
During PM Modi’s visit, an agreement was reached between India’s Oil and Natural Gas Corporation (ONGC) and ExxonMobil for a joint exploration venture in India’s deep-sea oil and gas blocks. This deal, worth an estimated $3 billion, not only strengthens energy security but also promotes technology transfer and expertise sharing. Additionally, collaborations in the renewable energy sector are expected to accelerate, fostering a greener and more sustainable future.
- Defense and Technology Partnerships:
India and the US have deepened their defence ties by signing a $2.5 billion deal for procuring military equipment and advanced technologies. The agreement encompasses purchasing cutting-edge defence systems, including armed drones, missiles, and surveillance equipment. This collaboration strengthens India’s defence capabilities and promotes the development of indigenous defence manufacturing and technology transfer, leading to long-term economic growth.
- Healthcare and Biotechnology:
During PM Modi’s visit, meaningful progress was made in healthcare and biotechnology collaborations. India’s Biological E Ltd. and Providence Therapeutics signed a memorandum of understanding (MoU) to produce mRNA vaccines, which are crucial in fighting pandemics. This agreement, valued at approximately $1 billion, highlights the potential for India to become a significant player in the global vaccine production and distribution network, fostering economic growth in the biotech sector.
- Skill Development and Education:
The visit also emphasized collaborations in the field of education and skill development. Indian companies, including Tata Consultancy Services (TCS), Infosys, and Wipro, announced plans to invest in the US, generating employment opportunities and contributing to local economies. Additionally, the Indian government’s commitment to enhancing skill development programs aligns with the growing demand for a skilled IT, healthcare, and manufacturing workforce, further boosting economic spin-offs.
Given that India’s economic indices stand out, the timing of Prime Minister Modi’s visit could not have been more advantageous. It is on price stability, with the Consumer Price Index (CPI) for the three months of March–April 2023 falling to 4.7% in April, the lowest figure since November 2021. Although some economists anticipate a resurgence, the figure is now the closest it has ever been to the aim of 4%.
In 2022–2023, India’s authentic gross domestic product (GDP) grew by 7.2%, higher than the initial projection of 7.0%. The Reserve Bank of India’s governor, Shaktikanta Das, announced that the country’s economy had surpassed its pre-pandemic level by 10.1%. He also mentioned that there had been a steady improvement in the ratios of external debt to GDP and international investment position (IIP) to GDP.
Intangible Gains and Economic Spin-Offs:
Besides the abovementioned deals, PM Modi’s US visit also yielded several intangible gains with immense potential for economic spin-offs. These include:
- Strengthening Diplomatic Ties: The visit reinforces India’s position as a key global player and enhances its diplomatic ties with the US. Such strengthened relations can facilitate trade, investments, and technology transfers, leading to economic growth in both countries.
- Promoting Innovation and Entrepreneurship: Collaborations in technology, biotechnology, and renewable energy foster knowledge exchange, innovation, and entrepreneurship. This exchange of ideas and expertise has the potential to stimulate job creation and economic growth, benefiting both nations.
- Attracting Foreign Direct Investment (FDI): The visit showcases India’s economic potential and reforms to the US business community. This exposure can attract increased FDI, leading to infrastructure development, job creation, and improved productivity.
- Knowledge Transfer and Research Collaborations: Partnerships in research and development between Indian and US institutions can lead to breakthrough discoveries, technological advancements, and intellectual property generation. These collaborations can drive economic growth and create high-value jobs in the biotechnology, healthcare, and artificial intelligence sectors.
Perhaps the message to the US Congressmen, when there are global headwinds, is that India is now the world’s fastest-growing colossal economy and a more trustworthy English-speaking partner. The IMF’s most recent global outlook, published in April, contained “uncertainty” as many as 60 times. The Reserve Bank of India has mentioned both the global headwinds and the domestic tailwinds.
The banking industry in India has also been able to weather several financial shocks. It is now among the most profitable in the world with strict regulations while also maintaining and expanding on the digital depth of financial services. This is even though the world is experiencing a new phase of turbulence and new headwinds from the turmoil in the US banking sector.
PM Modi’s US visit has resulted in substantial deals worth around $6 billion, spanning multiple sectors such as energy, defence, healthcare, and education. These agreements enhance bilateral ties and hold significant potential for economic spin-offs, including job creation, skill development, technology transfer, and innovation. Furthermore, the intangible gains, such as strengthened diplomatic relations and increased foreign investment, reinforce India’s position as an emerging global economic powerhouse. As India and the US move forward with their collaborative endeavours, the economic benefits will likely ripple beyond the immediate deals, fueling sustainable growth and prosperity.
