US defence firms may gain from Pak standoff

Background: India-US trade and investment issue, US-India Business Council (USIBC), US-India Trade Policy Forum (TPF), Ease of doing business, FDI.

  • According to the US-India Business Council President, an expected increase in India’s defence spending due to the current stand-off with Pakistan has presented a tremendous opportunity to major US companies including Boeing, Lockheed Martin and Raytheon to expand their Indian operations.
  • The USIBC is a business advocacy organisation working to boost India-US ties. The US-India Trade Policy Forum is slated to meet next week. The TPF is the main bilateral forum for discussion and resolution of India-US trade and investment issues.
  • In June, the Centre had liberalised the defence sector by allowing foreign investment beyond 49 percent through government approval in cases where the country gets access to modern technology.
  • He said defence minister Manohar Parrikar had lauded a USIBC report on suggestions to improve ease of doing defence business in India, including proposals to maintain transparency, eliminate corruption and expediting government’s decisions on big defence purchases.
  • He said US firms across sectors did not perceive any risk to their Indian operations due to the India-Pakistan stand-off as they see maturity on the part of Indian and US leaderships as well as due to talks with China and Pakistan to ensure the situation doesn’t go out of control.

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