India Trip: Geithner’s Missed Opportunities

This month, U.S. Treasury Secretary Timothy Geithner became the latest of President Barack Obama’s cabinet members to make a quick trip to India.

The trip could have served as an effective precursor to Obama’s planned visit to India’s capital this summer.

This month, U.S. Treasury Secretary Timothy Geithner became the latest of President Barack Obama’s cabinet members to make a quick trip to India.

This month, U.S. Treasury Secretary Timothy Geithner became the latest of President Barack Obama’s cabinet members to make a quick trip to India.

The trip could have served as an effective precursor to Obama’s planned visit to India’s capital this summer.

This month, U.S. Treasury Secretary Timothy Geithner became the latest of President Barack Obama’s cabinet members to make a quick trip to India.

The trip could have served as an effective precursor to Obama’s planned visit to India’s capital this summer.

By most measures, however, Geithner’s trip did not appear to have much impact and won’t be remembered for long. [br]

The new U.S.-India Economic and Financial Partnership launched during Geithner’s visit is vague and unspecific. The only real commitment made public is to meet again.

This is not enough if India is to rise from being America’s 14th-largest trading partner to the top 10.

Instead of taking the time to focus on the Indians’ specific, detailed needs and concerns, Geithner’s cookie-cutter approach was superficial and may even have seemed insincere to some in India, according to this provocative opinion piece in Bloomberg Business Week.

In this sense, the Treasury Secretary missed an opportunity to help U.S. businesses in India.

In March, Standard Chartered Bank announced intentions to raise $500 million to $750 million from Indian investors via the newly created Indian Depositary Receipts (IDRs). 

A few years ago the India affiliate of Edinburgh-based Cairn Energy raised a billion dollars on India’s stock market.

Geithner could have pressed for ways for U.S. companies to participate more vigorously in such opportunities.

The statement Geithner issued in Delhi spoke warmly of India’s commitment to “quality higher education.”

While this is true, the global reputation of the Indian Institutes of Technology and the Indian Institutes of Management is not new news.

He could instead have mentioned India’s hot-off-the-press landmark law that guarantees the right to free education for any child between the ages of 6 and 14.

Visiting a branchless mobile-banking service site affiliated with Eko and the State Bank of India, the Treasury Secretary was shown how 42,000 customers are served via 350 store outlets where the small retail store owners serve as “human ATMs” and use cell phones to help with transactions.

According to Reuters, Geithner said “I don’t think that India needs any help in this area.”

That’s wrong. [br]

With a potentially huge base of cell-phone customers in India, it’s not hard to visualize how U.S. sensor and semiconductor technology could create a special mobile phone that could authenticate both “banker” and “customer” using fingerprint recognition or other robust, secure means.

It would be a loss for the U.S. if innovations from Nokia, Siemens or Samsung fulfill such breakthrough opportunities in India.

U.S. engineering companies such as Bechtel have helped build Reliance India’s ultramodern oil refinery near Jamnagar.

But U.S. government encouragement might lead to more active participation for American companies in building Indian roads, bridges, and airports.

The government of Japan, through its Japan International Corporation Agency, has been cooperating with India’s Railway Ministry since 2008 in planning the Mumbai- Delhi freight corridor to connect the busiest port in India by modern rail to the markets of northern India.

Japanese companies such as Mitsubishi Heavy Industries, Toshiba and Hitachi will benefit from lucrative construction contracts. Japanese companies will locate new manufacturing sites along key sections of this corridor.

India would be receptive to a bold U.S. initiative, say, to modernize Mumbai or Bangalore…

Two sectors where U.S. exports could skyrocket are defense and entertainment.

U.S. companies are generally free to sell defense hardware in India, but not in China.

While India could certainly streamline its defense-acquisition processes, the more immediate bottlenecks are U.S. export-control procedures that have lagged the visions of U.S. political leaders.

For example, some of the most modern defense technologies that set U.S. suppliers apart from others are not approved for sale to India.

This has created opportunities for newcomers: Israel, which was not even a player in the Indian defense market 10 years ago, has now supplanted Russia as India’s major defense supplier.

While Google pulls out of China and Hollywood releases are tightly controlled by Beijing, India places no such limitations of censorship or trade on U.S. companies.

Collaboration between Hollywood and Bollywood is skyrocketing. Steven Spielberg, the king of American cinema has accepted Indian capital for DreamWorks from Anil Ambani’s Reliance ADAG.

Geithner would have done well to acknowledge the growing two-way alignment around entertainment during his visit to Mumbai, the center for both entertainment and finance in India.

Success in India is about both nuance and intent.

Geithner’s trip fell short on both counts.

India is too important to U.S. interests to be treated casually.

President Obama needs to direct his cabinet to take India seriously and get beyond talk of democracy and a free press.