U.S. Eases Restrictions on Exports to India.

MUMBAI President Barack Obama announced a significant loosening of restrictions on U.S. exports to India and called for India to do its part to promote greater trade between the countries by lowering barriers to foreign investment in sectors such as retail and agriculture.

"Increased commerce between the U.S. and India can be and will be a win-win proposition for both nations," Mr. Obama said, addressing a packed gathering of U.S. and Indian business executives in Mumbai.

The move to liberalize export rules will result in Indian space and defense agencies being removed from the U.S. "entities list," which restricts trade with foreign organizations deemed nuclear proliferation risks, an administration official said. That will make it easier for U.S. companies to export technology with both peaceful and military uses.

"We're taking the necessary steps to strengthen this relationship," Mr. Obama said. "India can also do its part."

The president also heaped praise on India for two decades of progress and reform that have fueled a rapid economic rise he called "one of the most stunning achievements in history."

"India has lifted tens of millions of people from poverty and created one of the largest middle classes on the planet," he said.

Mr. Obama's trip, coming on the heels of his party's walloping defeat in U.S. congressional elections, is as much about righting Mr. Obama's rocky relationship with business as it is about advancing U.S. relations in Asia.

The White House drew attention Saturday to U.S. trade deals with India worth $14.9 billion, including $9.5 billion in U.S. export content that the Obama administration believes will support more than 50,000 jobs. Some of the transactions were mostly completed several weeks ago, but their official announcements were left for the president's visit, helping him to tout big deals to counter critics who say he isn't doing enough to address the U.S. economy's high jobless rate.

Among the big-ticket transactions: Chicago-based Boeing Co. is finalizing an approximately $4.1 billion sale of C-17 military transport aircraft to India's air force, a deal the White House said could support 22,160 jobs at Boeing's Long Beach, Calif., production facility. In another deal, General Electric Co. is negotiating a final contract to sell India more than 100 engines for light combat aircraft, a deal valued at about $822 million.

Michael Froman, deputy U.S. national security adviser for international economic affairs, acknowledged that the business deals were in negotiations long before the president's arrival. But, he said, Mr. Obama muscled the deals along. "A presidential visit is an action-forcing event. It helps concentrate the mind," he said, especially when governments are involved in defense procurements.

There were smaller announcements too. Mountain View, Calif., software company Intuit Inc., maker of Turbo Tax, said it will launch a mobile-phone product in India with handset-maker Nokia Corp. to help Indian small businesses market their products and services to the country's 670 million cellphone users.

The president highlighted the huge strides the two countries have already made in expanding bilateral trade. U.S. merchandise exports to India quadrupled between 2002 and 2009 to $16.4 billion, while U.S. services exports increased from $3.3 billion in 2002 to more than $10.5 billion in 2008, the White House said in a release.

But he also said there was significant "untapped potential" in the relationship, since only 10% of India's imports are from the U.S., and only 2% of U.S. exports go to India. He noted that the U.S. exports more to the Netherlands. "I have no doubt we can do better than that – we can do much better," Mr. Obama said.

The president said the two countries will engage in "healthy competition" and he said both sides would feel protectionist pressures. "There are many Americans whose only experience with trade and globalization has been a shuttered factory or a job that was shipped overseas," he said, adding that many Americans still had a "caricature" of India as a place with call centers where U.S. jobs have been outsourced.

Mr. Obama said India should reduce barriers in sectors such as agriculture, retail and telecommunications to promote trade. "In a global economy, new growth and jobs flow to countries that lower barriers to trade and investment," he said.

The export control liberalization was expected, and the details were highly technical. Under the agreement, the U.S. would back India's full membership in four different nonproliferation alliances, governing nuclear weapons, missiles, chemical and biological arms, conventional arms and so-called dual use technology, which has civilian and military applications.

Arms control groups remain leery of India, although 12 years have past since the country conducted nuclear weapon tests.

Throughout his 20-minute remarks, the president emphasized that he believes the U.S. and India share many values.

"We both cherish the entrepreneurial spirit that empowers innovation and risk taking," Mr. Obama said, noting that there's great potential for the countries to collaborate to innovate new technologies in clean drinking water, health care and energy.

Source : online.wsj.com