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Indian middle class has economic potential: US official

PTI | Washington |

India’s middle class offers major opportunities for US exports, a senior American diplomat has said, highlighting the extraordinary economic potential of the Indian market.
Acting Assistant Secretary of State for South and Central Asia Alice Wells said rising standards of living in India will drive demand for US products, services and energy in the country.
The emergence of 350 million middle class consumers will drive Indian growth and will also offer major opportunities for US exports, she said addressing a gathering of US India Business Council.
“Emerging middle-class consumers will have new demands in areas such as education, health care, and financial and professional services — fields where US companies have much to offer. And US agricultural technology and projects can contribute to a diversified nutritional profile that can do much to advance public health in India,” she said.
Wells said there is extraordinary economic potential in the Indian market.
Recent purchases by SpiceJet and Jet Airways of Boeing aircraft underscore that aviation and its related industries are always areas of massive potential, she said, adding that another area of great promise is the energy sector.
India is the third largest energy consumer in the world after China and the US and will remain one of the largest energy consumers for decades to come, she noted.
Just last month, Indian companies began increasing their purchases of US crude oil, and Indian firms are also turning to US liquefied natural gas to meet demands to diversify supplies.
And India’s state gas utility, for example, signed a 20-year supply agreement with US’ LNG producer Cheniere Energy which has already taken delivery of multiple shipments of gas, she said.
“Many have questioned how ‘Make America Great’ here and Made in India can be compatible, and indeed, we do need to do more to balance the US trade deficit with India, which totalled nearly USD 30 billion last year,” Wells said.
“Yet the developments I cited are powerful examples of the vast complementarity of our economy. Rising standards of living in India will drive demand for US products, services, and energy that can help Indians live healthier and more productive lives. And that will in turn create more growth in India,” Wells told the audience.
“We know this is a lot of work to get this done right, and we’re willing to rely on the counsel and the partnership of the business community as we work with our Indian counterparts to realise the promise of this economic relationship,” she said.
The State Department is now working closely with USTR and the Commerce Department to address their concerns, including tariff and non-tariff barriers, subsidies, liberalisation policies, restrictions on investment, and intellectual property concerns that limit market access.
“Were committed to a trade relationship that promotes prosperity in both our countries by ensuring that its fair and reciprocal,” she said.