When top executives of large US companies met External Affairs Minister Subrahmanyam Jaishankar on May 27 under the aegis of US India Business Council (USIBC) and US India Strategic Partnership Forum (USISPF) in Washington, even as they acknowledged the magnitude of India’s second wave of the coronavirus pandemic, most of their questions and concerns focused on the role of India in global economic recovery.
Free from partisan views and knowledgeable about the actual ground situation, they looked beyond raw numbers and assessed the economic outlook after the second wave. Most agreed with the Minister’s view that since lockdowns were local and intermittent and as supply chains were intact, its impact would be far less than last year. They took a keen interest in the government’s efforts to vaccinate as many people as possible so as to get the economy back on track, according to diplomats who asked not to be named.
Prominent among those who attended the meeting were: Ariel Mactavish, President, Medtronic Respiratory Inc; Ken Gilmartin, Executive Vice President Jacobs Engineering Group; Arvind Krishna, Chairman and CEO, IBM; Raj Subramaniam, President, FedEx; Julie Sweet, CEO Accenture; and Seifi Ghasemi, Chairman and CEO, Air Products.
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The US CEOs spoke about similar American experiences last year. Many noted the logistics effort made by the Indian overnment, especially on oxygen supply. They highlighted that India had a key role as a global vaccine hub in restoring worldwide economic confidence. Apart from its resident population, its large number of expatriates and services staff including merchant shipping and airline crew were globally relevant. Many US companies also had large India-based staff whose health was central to their operations. The CEOs also believed that as the vaccine drive accelerated, connectivity and interaction between the two business communities will be fully restored.
Till Sunday evening, India had fully vaccinated 44.4 million people and partly vaccinated 123.1 million – which means almost 18% of the eligible population of 940 million (over the age of 18 years) has been vaccinated. On Monday, the Indian government told the Supreme Court that the country would vaccinate everyone in the age group by the end of December, something that will require a sharp acceleration to around 7.75 million doses administered a day for the rest of the year.
Interestingly, many CEOs themselves brought positive perspectives from their own company feedback on economic recovery. Experts have pointed out that while the onset of the second wave coincided with the economy’s return to normalcy, the fact that most states have ensured manufacturing and other business activities have continued through localized lockdowns may mean a lower impact. RBI Governor Shaktikanta Das said on May 5 that the dent to aggregate demand on account of the second wave was moderate and disruptions in manufacturing were minimal compared to the first wave due to localized containment measures. And most international and domestic forecasters expect the economy to still grow in excess of 10% in 2021-22.
In fact, this was taken as such a given that the focus shifted to India hosting more supply chains to de-risk the global economy. In particular, EAM was quizzed in detail about PLI ( performance-linked initiative) schemes to expand manufacturing. Many participants spoke about their plans to invest more in the coming year. There was particularly strong interest in electronic manufacturing, digital and health sectors.
The mood in Washington political circles too was supportive, the diplomats added, with the Biden administration assuring India of full support in medical systems and equipment even as they sought to address New Delhi’s concerns over Indo-Pacific with the QUAD grouping now being placed on priority. As for China, it has been widely noted that the May 19 meeting between the foreign ministers of the US and Russia have resulted in a US-Russia summit on June 16 in Geneva, while the March 19 US-China meeting between foreign ministers and national security advisors ended in a slanging match. India is a natural beneficiary of better ties between the US and Russia.