When top executives of large US firms met External Affairs Minister S. Jaishankar on May 27 under the aegis of US-India Business Council and US-India Strategic Partnership Forum in Washington, even as they acknowledged the magnitude of India’s second wave of the Covid-19 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 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, Respiratory Interventions Operating Unit, Medtronic Inc.; Ken Gilmartin, executive vice-president, Jacobs Engineering Group; Arvind Krishna, chairman, and CEO, IBM; Raj Subramaniam, president and COO, FedEx; Julie Sweet, CEO, Accenture; and Seifi Ghasemi, chairman and CEO, Air Products.
The US CEOs spoke about similar American experiences last year. Many noted the logistics effort made by the Indian government, especially on oxygen supply. They highlighted that India had a key role as a global vaccine hub in restoring global 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 firms 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 has been vaccinated. On Monday, the 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 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 continued through localized curbs may mean a lower impact.
RBI governor Shaktikanta Das on May 5 said 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 curbs. And most international and domestic forecasters expect the economy to still grow more than 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, the minister was quizzed in detail about PLI (performance-linked incentive) schemes to expand manufacturing. Many participants spoke about their plans to invest more in the coming year. There was strong interest in electronic manufacturing, digital, and health sectors.
The mood in Washington political circles too was supportive, the diplomats added, with the Joe Biden administration assuring India of full support in medical 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 has resulted in a US-Russia summit on June 16 in Geneva, while the March 19 US-China meeting between foreign ministers and NSAs ended in a slanging match. India is a natural beneficiary of better ties between the US and Russia.
