India is planning to invest over “a quarter of a trillion dollars” on defense in the next few years, and it will likely continue to turn to the U.S. to buy its materials, the president of the U.S.-India Business Council told CNBC on Monday.
“The last couple of years India has become one of the largest buyers of U.S. defense equipment, roughly $15 billion. I believe this trajectory will continue,” Mukesh Aghi said in an interview with “Closing Bell.”
Indian Prime Minister Narendra Modi had his first face-to-face talks with President Donald Trump on Monday afternoon.
The encounter comes days after the Trump administration authorized the sale of unarmed surveillance drones to India, according to the manufacturer, General Atomics Aeronautical Systems.
India initiated its request to buy 22 Guardian MQ-9B unmanned aircraft for maritime surveillance last year. The deal is estimated to be worth about $2 billion. The transaction is still subject to congressional approval.
Since 2008, India has signed U.S. defense contracts for things like C-130J and C-17 transport aircraft, P-81 maritime patrol aircraft, Harpoon missiles, and Apache and Chinook helicopters.
Defense spending isn’t the only topic presumably at the table between the two leaders. Immigration and the hotly contested H-1B program may also be discussed.
The prime minister also spent time with U.S. CEOs during his visit, meeting with high-profile leaders on Sunday and earning rave reviews.
Rick Rossow, senior advisor at the Center for Strategic and International Studies, told CNBC the corporate relationships may somewhat overshadow the one between the two governments.
The two countries “haven’t been able to find common ground,” he said in an interview with “Closing Bell.”
“But CEOs are still investing. India’s the largest destination for foreign investment in the world this year. It’s becoming one of America’s largest trading partners,” he added.
Companies that would benefit from a growing trade relationship with India would be ones that the Indian or its key state governments have highlighted, said Rossow.
“Right now they have really liberalized the oil and gas sector, they’ve liberalized coal production. They’re also undertaking a massive renovation of the broke electric power grid. So if you’re a company that sells electric power equipment or related services, you’ve got a great opportunity out there,” he said.
Source:-CNBC
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