President Barack Obama’s state visit to India this week underscores the delicate balance in US–Indian economic relations: that is both the opportunity and competition that arises when advancing economic, trade, and business relations between the two countries. This paradoxical relationship is apparent in the pharmaceutical industry, where India is an important cog in pharmaceutical companies’ strategies for growth in emerging markets, but also a competitive force for suppliers, contract manufacturing organizations (CMOs), and contract research organizations (CROs) serving the pharmaceutical industry. Is this simply a natural byproduct of a global economy or is there a better resolution?
From a US policy perspective, Obama is emphasizing the opportunity while recognizing the challenges. “…We are two free-market economies where people have the freedom to pursue ideas and innovation that can change the world,” said Obama in remarks to a joint session of the Indian Parliament this week. “And that’s why I believe that India and America are indispensable partners in meeting the challenges of our time….In short, with India assuming its rightful place in the world, we have an historic opportunity to make the relationship between the two countries a defining partnership of the century ahead.”
The President outlined three major areas for economic cooperation: developing partnerships for creating high-technology and high-wage jobs in areas such as defense and civil space, pursuing joint research and development for a green economy, and reducing barriers to trade and innovation. He also emphasized the need for working collaboratively on regional and global security issues and strengthening the foundation of democratic governance in India.
But while speaking of the opportunity between the two countries, he also acknowledged the difficulties inherent in forging US–Indian relations. “The United States sees Asia–especially India—as a market of the future…And I am here because I believe that in our interconnected world, increased commerce between the United States and India can and will be a win–win proposition for both countries,” said the President in remarks before the US–India Business Council and Entrepreneurship Summit. “I realize that for some, this truth may not be apparent. I want to be honest. There are many Americans whose only experience with trade and globalization has been a shuttered factory or job that was shipped overseas … In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic two-way relationship that is creating jobs, growth, and higher living standards in both our countries.”
The President’s challenge and also the task facing businesses is and will continue to be how to truly create and maintain a two-way economic relationship between the two countries. The bio/pharmaceutical industry’s experience to date is a microcosm of this larger challenge. So far, the industry has seen both the opportunity in India as a pharmaceutical market, but also has experienced the growing pains, particularly from a suppliers’ perspective, of a new global economic order. Partnerships, collaboration, and mutual economic gains are all positive, but how such ideals translate into specific policy and business decisions is ultimately what matters. Without doubt, it is a delicate balance, but it is one in which it is and will be crucial to keep in sync.