Hoover Institution (Stanford, CA)—Nothing will discourage India’s government from continuing to pursue closer economic and technological ties with the United States, India’s finance minister said at the Hoover Institution on Monday, April 21.
Nirmala Sitharaman, finance minister in Narendra Modi’s government since 2019, told a standing-room-only crowd in Hoover’s Hauck Auditorium that her government was “one of the earliest” countries to reach out to the US when it announced a broad imposition of tariffs on approximately ninety countries worldwide in April.
“We were one of the earliest to approach the new administration in the US to talk trade, to start the negotiation, as it were, for a trade deal,” Sitharaman said.
She said US Trade Representative Jamieson Greer is expected to meet with the Modi government in the coming months, and she is “very hopeful” the outlines of a new trade deal between the US and India will flow from then.
“If anything, the first tranche of an agreement I hope will be concluded by the fall of this year. So we’ve been open-minded, and we’ve been very clear in demonstrating the value of this trade relationship with the US,” she said.
Sitharaman’s appearance at Hoover was made possible by the Consulate General of India in San Francisco and Hoover’s Huntington Program on Strengthening US-India Relations, under the direction of Hoover fellow Sumit Ganguly.
Hoover Senior Fellow and Research Director Steven J. Davis engaged Sitharaman in a live interview following her opening remarks.
She told Davis that India is building up its manufacturing base under the guidance of the government’s Viksit Bharat (Developed India) by 2047 program. In that effort, its policy leaders see benefits of cooperating with the US specifically in several industries, including nuclear energy, semiconductors, pharmaceuticals, and quantum computing.
Sitharaman also spoke to Davis about how her government is working to increase the share of its workforce that engages in manufacturing, boost female participation in the workforce, and change some of the misconceptions about India held by investors and policymakers in the Global North, such as an overemphasis on India’s share of global poverty or its historic issues with gender and religious equality.
Without a major rebalancing of its output, Sitharaman said, a large share of the Indian workforce will enter into the “gig” economy over the next several decades.
By 2030, 230 million Indians could be working in the gig economy. Instead, Sitharaman said, her government wants to grow the share of India’s economy devoted to manufacturing from 12 percent today to 22 percent.
“Manufacturing is a force multiplier for services sector growth, and not so much the other way around,” she argued. “It lends cohesion to communities, and in the post-COVID world, manufacturing reinforces national security also.”
To boost domestic industry, India is targeting many segments of manufacturing, from smartphones and other devices to footwear, textiles, leather, and green tech.
To further expand the Indian workforce, Sitharaman said, the government has introduced a raft of measures to make it easier for Indian women to participate.
Maternity leave was lengthened from four weeks to six months. Women who open bank accounts in their own name are given a higher-than-market interest rate on their deposits to encourage them to maintain their own finances.
And in the STEM programs of most top-ranking universities in India, there are now more women enrolled than men.
Sitharaman said these facts illustrate the idea that India is changing faster than observers in the West, who often have their own preconceived notions of India as a bastion of poverty, can keep up with.
“Many things about India—the imagery, the perspective, the mind-picture—take a long time to change, but policies change very quickly,” she said.
