SAN FRANCISCO, Calif. — The San Francisco, Calif., Bay Area and India are two dynamic, young entities that have vast opportunities for collaborative growth, said India’s Ambassador to the U.S. Harsh Vardhan Shringla here June 21, at the launch of the Bay Area Council’s new report on the convergence between the two economies.
The Bay Area Council Economic Institute’s report — ‘The Bay Area and India: Convergence and Alignment in the Innovation Age’ — presents an overview of the Indian economy, expected to be the fourth largest in the world by the end of this year. It is expected to grow to $5 trillion over the next five years, and to $10 trillion over the next 13 years.
The report also identifies several areas of economic opportunity between the Bay Area and India, including information technology, health care and biotechnology, clean energy, India’s ‘smart cities’ initiative and financial technology.
“The report is a foundation upon which policy makers and young entrepreneurs can build their future with India,” stated Shringla.
U.S. goods and services trade with India totaled an estimated $142.1 billion in 2018. Exports were $58.9 billion; imports were $83.2 billion. The U.S. goods and services trade deficit with India was $24.2 billion in 2018, according to the Office of the U.S. Trade Representative.
Earlier in the day, Shringla met with California Governor Gavin Newsom, who pledged to the ambassador to launch a trade office in India to spur economic ties between the state and the country. As the mayor of San Francisco, Newsom in 2009 led a delegation to Bangalore to establish a sister-city relationship.
California’s former governor Jerry Brown in 2015 signed a Memorandum of Understanding with the government of Telangana to establish a formal partnership between California’s Innovation Hubs — I-Hubs — and Telangana's T-Hub to spur entrepreneurs in both states.
Between the years 2003 to 2016, California and India had a $23 billion trade relationship, two-thirds of which came from Northern California: about $18.5 billion, according to the Bay Area Council’s report. Interestingly, California’s largest export to India were edible fruits and nuts, which accounted for about $589 million in exports during that time period.
Indian American farmers in the Yuba City/Marysville region grow almost all of the nation’s almonds and walnuts, and a large percentage of its stone fruit, including canned peaches. India, seemingly unerringly, hurt the pocketbooks of Indian American farmers last month when it slapped a 20 percent tariff on 47 products, including walnuts and almonds.
The tariffs came as a retaliatory measure to the U.S.’s imposition of 25 percent tariffs on Indian aluminum and steel in 2018.
Earlier this year, the U.S. ended its generalized system of preferences for India, a program that allowed for duty-free exports of certain products. In May, the U.S. ended waivers of sanctions for seven countries who purchase oil from Iran, including India.
The report was released three days ahead of U.S. Secretary of State Mike Pompeo’s visit to India amid the tense trade relations. In briefings with the Indian press, Pompeo characterized the relationship between the two countries as “two great friends” who are currently facing disagreements. He noted that the U.S.’s partnership with India was an extremely important relationship for both countries.
Sean Randolph, senior director of the Bay Area Council Economic Institute and author of the report, noted at the launch that India has an extremely young population, and must grow its economy to meet the needs of its rapidly-growing workforce.
Several hundred million people in India have moved into the middle class due to the innovations of India’s young entrepreneurs, said Randolph. But the report quoted former Reserve Bank of India Governor Raghuram Rajan, who said that per capita income must grow at four times its present rate, over the next 20 years, to lift people out of extreme poverty.
The entire report can be read online at: https://bit.ly/305k2fM