U.S.-India Relationship in Testing Times

Amidst the U.S. Commerce Secretary, John Bryson’s visit to India, there looms a growing pandemonium in the Indian Government’s thought and action. It could also result in severe and dire consequences with an impact on the U.S.-India economic partnership. The U.S has been vociferous to condemn that the Indian import duties were rather high. John Bryson addressed the need to relieve the steep duties on products such as medical equipment, capital goods, and fruits. At an FICCI (Federation of Indian Chamber of Commerce & Industry) event, he suggested, “It would be a miss, if I would not mention about the barriers which still exist in building our economic relationship. For example, there are many tariffs on American products which are still too high.” He also talked about the steep import duties on IT, electronics, and solar energy. He gave the audience a thought to ponder over.

However Anand Sharma, Union Commerce and Industry Minister raised his concern about the growing number of visa rejections on Indians by the U.S. and added that the U.S. was very aware of the Indian import duties and restrictions.

In this muddle, when the American economy is on its way to recovery, the Indian Government needs to ascertain a middle path. Business is two-sided and so is strategic economic partnership. It is not an act of coercion from anywhere either. It is about implementing a fresh set of rules and easing restrictions on duties so that mutual economic interests are addressed. That is one side of the coin.

Recently ASSOCHAM (The Associated Chambers of Commerce and Industry of India) urged the Indian Government to raise the import duties of steel products so that local manufactures of such products could battle the imports from China and other countries. It reveals the motive behind the high-rise import duties; however, the Indian government needs to prepare the ground for solutions. Economic relations could be at stake.

The Overweight Maharaja Needs A Diet

At 35,000 feet on board a 747, I have an amusing choice.  For $25 I can buy a bottle of Napa Valley Cabernet from the inflight shopping catalog, or buy 10% of the airline I’m flying.

Okay not quite.  But a functional and sustainable civil aviation system is critical for any nation’s economic security, and both the United States and India have aviation industries in severe financial distress.  In the past 20 years there have been over 100 bankruptcies by US airliners, with losses of over $30 billion and recent layoffs in the tens of thousands.  India’s airliners are under a similar specter.  Air India, once regarded as one of the best airlines in the world, is continuing a 30 year run of sad decline as annual losses grow alongside management scandals and customer dissatisfaction.  Most of India’s private sector counterparts are doing no better.

Both India’s and America’s airline industries have a lot to learn from each other, mostly on what doesn’t work, but that’s a good place to begin.  One, American legacy carriers attempting to attract passengers by offering the lowest fares while monetizing dining, entertainment, baggage, and other service lines has been a failing strategy.  Airlines not marketing themselves as no frills carriers should be setting the highest industry standards for service and not resorting to penny pinching as a means of safeguarding financial health.  Two, ground time of aircraft in the U.S. and India is unacceptably prolonged and capital intensive assets must be utilized far more productively.  Three, develop financing strategies for execution of fleet renewal that allows for deferment of deliveries or leasing out of aircraft in the event of a downturn.  Many labor disputes in India and America have arisen as a result of pay cuts stemming from cash flow issues related to fleet renewal costs.  Four, developing a long-haul network and abandoning revenue diluting hubs in London, Paris, and Frankfurt, used for America-to-Asia air-traffic.

Regulatory reforms however are no less urgent.  Recognizing the importance to national security of civil aviation infrastructure, rationalizing the taxes on aviation fuel is a must, particularly for India which has some of the highest jet fuel taxes in the world.  Two, raising limits on FDI and allow foreign players to help recapitalize airlines.  Three, investment in modernizing national air traffic control systems to help lower fuel and labor costs.

Lastly, no more commissions which meet amid big fanfare but pass reports onto regulators who sit on the files.  The problems of both India’s and America’s airline industries are no big secret, and there are no shortages of talented management and turnaround plans.  Regulators ought to listen more, and explore what other nations facing similar crises have tried.  The Maharaja badly needs a diet.

Obama’s opposition to Outsourcing: How are Indian-Americans & U.S. businesses viewing this?

There is a taste of threat in the air for some and may not be for the rest. President Obama’s opposition to outsourcing has raked enough controversy and a certain note of uncertainty seems to lurk about. He has voiced it time and again that his policy aimed at making the lives of middle-class Americans more secure; thereby ensuring that jobs were not sent overseas. His views have given rise to several perceptions among Indian-Americans.

First and foremost, a lot of individuals believe that due to President Obama’s opposition to outsourcing, several IT professionals lost their jobs in 2009. He had promised at almost eradicating the unemployment problem in the U.S., thereby providing a tax rebate to all those American firms who sought for labor and employment within the country. That was a time when people were grappling with the loss of jobs and the future seemed bleak and Obama felt the need to reinstate the U.S. as the financial superpower. However the intent of the government to recover $ 700 billion went kaput and now the end game with the elections draws close. The entire notion of this opposition to outsourcing appears ‘discriminatory’ to some.

However there are several others who think otherwise. Wipro has reiterated its presence in the U.S. having partnered and collaborated with other businesses. It holds a different view of the outsourcing controversy. Infosys believes in the same. Some have of course dismissed the outsourcing chaos as something that is mere ‘political rhetoric’ and political hogwash. Well, one has reasons to believe so and this is it. While the unemployment rate in the U.S. is at a high, the political leaders also need to ponder about the repercussions in terms of profit that American conglomerates would face if they had no outlet to outsourcing. It is about time for them to think and create and draft ideas that work towards the better of all.

Indian-American Youth: A Present Focus on the Future

Guest post by Ravi Jha and Kush Desai

The 21st century is so far playing out to be a rather eventful time in human history, especially in the progression of our Modern Era. While society enjoys the fruits of past generations’ labors – from the stability of the former Marshall Plan-aid receiving Europe to the entrepreneurial zeal of the baby-boomers – society is also lamenting the former pitfalls of their parents’ generations, like the baleful re-emergence of the formerly American-outfitted Taliban and the crash of a regulation-free Wall Street. But amidst terrorist attacks, Middle-Eastern conflicts, diplomatic showdowns, crippling economic meltdowns, and ‘interesting’ political candidacies, any meaningful discussion about contemporary youth appears to have been marginalized. Policy-makers are especially apathetic to Indian-American students and youngsters; after all, why worry about a demographic often epitomized as the impeccable paragon of overachieving students?

But in modern America, issues exist which will not only affect today but also continue to drag down tomorrow, the foremost among them being education, political discontentment, and social discord. Thus the writers of this blog, a college undergrad and a high school junior, hope to reinvigorate serious debate revolving on issues related to youth affairs with a particular focus in on Indian-American youngsters.

But why?

Consider South Korea. In the aftermath of the devastating Korean War, South Korea was devastated; there was no economy to speak of, and social and governmental institutions outside of an American-fitted army were non-existent. It was a Stakhanovite work ethic and an almost absurdly stressed education system that transformed the nation into the modern high-tech hub that politicians, businessmen, and economists gawk at. In essence, continual public awareness and attention to the state of Korean youth, particularly on anything concerning education, quintessentially transformed South Korea within a span of a few decades.

The quintessential importance of the youth flows out of the classroom and workplace and into political, social, and economic realms as well. Frustrated youngsters in countries like Egypt, Tunisia, Libya, and Morocco were able to induce entire national uprisings to create what we now call the Arab Spring. Household Cold War autocrats like Hosni Mubarak and Muammar Qaddafi were swept out of office, despite hiding behind violent police and military forces. The main point: while Korea’s paragon of education allowed its children to develop their nation, politically frustrated youth in the Middle East were forced to coerce their governments radically, demonstrative of the need for a politically contented youth. Public policy for social change, on the other hand, is no worse.

Public education and awareness programs that target racism at elementary schools across the United States have been omnipresent ever since the successes of the Civil Rights Movement. In this case, public attention and action over children has translated into a more socially cohesive society. Institutions like the Ku Klux Klan no longer scare African-American children to sleep; an African-American has been able to capture the support of an entire nation in a landmark presidential election. Indeed, many negative aspects of American culture and society were bettered not just by de jure legislation, but by teaching about the past in order to pass on the lessons of yesterday.

In all of these cases, renewed focuses on youth were able to transform entire societies economically, politically, and socially, positively, might we add. Indian-American youth, a demographic quickly filling the shoes of American (and global) business, government, and scientific leaders, will undoubtedly play an important role in the coming decades of global integration. What we feel, know, do not know, and face is imperative to the very future; it is time that youth affairs from education to social cohesion get a center role in the arena of public policy debate. We hope to jump-start this message of a renewed youth focus by routinely informing about and taking sides on issues and events relevant to us.