Mumbai, India: With the US president, Barack Obama, jetting off onto the next leg of his Asian tour Indian and US companies and government officials will now settle down and discuss the modalities of implementing over $14.9 billion worth of deals signed or discussed in the course of the presidential visit. These deals have the potential to support up to 53,670 U.S. jobs, the White House has said.
|The US President, Mr. Barack Obama and the First Lady Mrs. Michelle Obama waving as they board Air Force One after their tour of India,, at Palam Airport, in New Delhi on November 09, 2010.|
Of the total value the US will export an estimated $9.5 billion to India.
"I want to be able to say to the American people when they ask me, well, why are you spending time with India, aren't they taking our jobs?" Obama told reporters in New Delhi Monday. "I want to be able to say, actually, you know what, they just created 50,000 jobs. And that's why we shouldn't be resorting to protectionist measures. We shouldn't be thinking that it's just a one-way street."
Some of the new deals discussed or signed up for include:
- India allowing LaGrange, Illinois-based Electro-Motive Diesel and GE Transportation to bid on the country's purchase of over 1,000 diesel locomotives in the next 10 years. They will be the only two companies allowed to tender.
- The sale of 30 new 737 Boeing aircraft to private Indian carrier SpiceJet.
- Sale of 10 Boeing C-17 military transport planes to the Indian Air Force.
- Sale of 107 F414 jet fighter engines to be sold by GE to the Indian Air Force for its indigenous fighter programme, the LCA Tejas.
- A separate $500 million deal for GE to supply India's Reliance Energy Ltd with 6 heavy duty gas turbines and 3 steam turbines.
Describing the relationship between the US and India as one of the "defining and indispensable partnerships of the 21st Century," the US president also made known his intention to support India's membership to four international alliances, including the Nuclear Suppliers Group.
These groups are responsible for the regulation of trade in nuclear, chemical, biological and missile technology/materials.
Boeing and General Electric get the largest slices of the cake with deals worth $6.8 billion and $1.6 billion respectively.
The biggest single deal is Boeing's sale of 10 C-17 transport aircraft, which will make the Indian Air Force the largest operator of C-17s outside the US, according to the White House. The preliminary agreement values the sale at $4.1 billion, less than the anticipated $5.8 billion. Boeing says the sale will support 22,160 U.S. jobs.
There is likelihood of the deal growing in size by atleast another six aircraft, possibly 10.
The SpiceJet deal for 30 B737-800 planes is worth $2.7 billion and will support 12,970 jobs.
The GE deal for 107 F414 fighter engines is tentatively valued at $822 million, which will support 4,440 jobs in the U.S.
The deal for 1,000 diesel locomotives, to be supplied over the next decade, could be worth over $1 billion.
The Reliance Power agreement for turbines with General Electric will be worth $750 million. Reliance Power also said it is negotiating an additional $1.25 billion worth of equipment deals with US companies which it declined to name.
It has finalized an agreement with the US Export-Import Bank to provide up to $5 billion in financing for US exports.
According to KPMG, India is a growing investor in the US market with investments in the 2004-2009 period totalling $26 billion, which created more than 55,000 jobs.
American companies have been disappointed with the tough domestic law adopted by India with regard to civil nuclear liability, but after will have to come around to accepting it as India is not likely to modify these laws given the horrendous experience it has suffered at the hands of an American company with respect to the Bhopal gas tragedy.
Nuclear trade with American companies is likely to increase the total value of bilateral trade significantly as India has a very ambitious civil nuclear programme.