United States President George W. Bush's visit to India and Pakistan this week could help clear major hurdles to American expansion of investment and trade ties with the South Asian nations.
Bush, who departs Washington on Tuesday for New Delhi, is scheduled to meet the chief executives of top American and Indian firms in the Indian capital to hear from them directly the bottlenecks impeding business ties.
The "US-India CEO Forum," launched during Indian Prime Minister Manmohan Singh's visit to Washington last July, has prepared a set of reform proposals to be handed over to the two governments during Bush's visit, officials said.
"This will give the President an opportunity to hear from these business leaders in India, and they will provide to the two leaders and to their governments ideas on how to further expand trade and investment between the US and India," said Bush's National Security Advisor Steve Hadley.
US-India economic ties are growing rapidly. Last year, US exports to India jumped by more than 30 percent compared with 20 percent growth in Indian exports to the US.
Bilateral merchandise trade amounted to nearly 27 billion dollars, seen by officials as way below the potential of the two large economies.
A civilian nuclear deal, which Bush wanted sealed with India, was expected to open up potential deals worth 20 billion dollars, said Rick Rossow, Director of the US-India Business Council in Washington.
While the US expands economies ties, it is cautious at home where unemployed Americans are frustrated over the rapid outflow of jobs to India, which is attracting US industries with its low costs and highly educated, English-speaking workforce.
Bush emphasised the point while previewing his South Asian trip last week. "Losing a job is traumatic. But rather than respond with protectionist policies, I believe it makes sense to respond with educational polices to make sure that our workers are skilled for the jobs of the 21st century," he said.
Bush then urged Americans to also recognise that India's rapid economic growth was creating new opportunities for US businesses and farmers and workers.
"India's middle class is now estimated at 300 million people. Think about that. That's greater than the entire population of the US," he said, pointing out that the Indians were buying air-conditioners, kitchen appliances, and washing machines mostly from American companies.
In Islamabad, Bush would discuss with President Pervez Musharraf a key bilateral investment treaty aimed largely at protecting US investors establishing businesses in Pakistan, officials said.
"They would also be discussing how we can cooperate to support Pakistan's important role in encouraging greater economic integration in South and Central Asia," Hadley said.
The US is Pakistan's largest trade and investment partner.
Bush said the bilateral investment treaty "would establish clear and transparent rules to provide greater certainty and encourage foreign direct investment."
The treaty would be a "high standard" one and create "a framework of stability" for investments, said Josette Shiner, US Under Secretary of state for economic and business affairs.
Musharraf has made economic reform a priority for his administration and the reforms have been attributed to the 8.4 percent growth chalked up last year by Pakistan to become Asia's second most rapidly growing economy after China.
The US is keen to open up business and trade ties with Pakistan as they could act as an effective antidote to Islamic radicalism. Pakistan is a key ally in the US "war on terror."
"By fostering economic development and opportunity, we will reduce the appeal of radical Islam, and demonstrate that America is a steadfast friend and partner of the Pakistani people," Bush said.
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