High stakes for Commerce secretary’s hi-tech trade mission to India

Commerce Secretary Gary Locke recently announced the names of the 24 technology firms that will join him for a trade mission to India next month aimed at boosting U.S. exports to the subcontinent.

The trip comes at a crucial time as the relationship between the two countries grows closer while their economies appear headed in divergent directions. The U.S. is increasingly focused on exports, while India’s domestic market is expanding rapidly and has never been stronger.

“Exports are leading the U.S. economic recovery, spurring future economic growth and creating jobs in America,” Locke said. “The business leaders joining me on this mission see the great potential to sell their goods and services to India, helping drive innovation and create jobs in both countries.”

Accompanying Locke from February 6-11 will be representatives from Boeing, Lockheed Martin and GE Hitachi Nuclear Energy, among others. More than half are small or medium-sized companies with a focus on civilian nuclear technology, defense and security, aviation, communications and information technology.

The Obama administration has set a goal of doubling exports by 2015 and has targeted India as fertile grounds for expansion. The country’s rapid advances in manufacturing and surplus of engineering talent has made it an attractive offshoring destination for multinational companies.

According to the Commerce Department, U.S. exports to India were up 15.2
percent through the first 10
months of 2010 and are projected to surpass a record $19 billion for the
entire year. Exports to India totaled $16.4 billion in 2009, making it
the 17th largest export market for American firms.

Locke first announced the trade mission during President Obama’s trip to India last November, during which the president called technology crucial to the growing partnership between the two nations. Obama also sat down with a small group of U.S. and Indian business leaders to discuss tech issues.

With a middle class the size of the entire U.S. population, India’s appetite for consumer technology is growing exponentially. But the focus of the mission will be to solicit more business for U.S. firms from the Indian government.

Last week Locke met with Indian Ambassador Meera Shankar in Washington and pressed the world’s largest democracy to purchase more American fighers and other defense technology. The increasingly cozy relationship between Washington and New Delhi could equal big opportunities for U.S. defense contractors.

The administration also hopes the agreement on civilian nuclear technology signed by the two countries under President George W. Bush will lead to lucrative contracts for American firms to build nuclear plants in the subcontinent, where the demand for electricity is one of the main constraints on growth.

But there remain some sticking points between the two counties, not the least of which is Silicon Valley’s reliance on talent from both India and China.

India, particularly the South, has also established itself as a key source of talent and innovation for the U.S. technology industry, which in turn has pressed the administration to ease limits on qualified foreign scientists and engineers as part of any attempt at comprehensive immigration reform.

House Oversight chairman Darrell Issa (R-Calif.), a tech entrepreneur himself, has proposed allowing 55,000 foreign graduates earning advanced degrees in math and science at U.S. universities to apply for permanent residency by re-directing visas from the diversity lottery program.

With unemployment stubbornly remaining over nine percent any attempt at increasing the number of imported foreign workers is a tough sell politically. A new GAO report released Friday showing India-based staffing firms receive a disproportionate share of H1-B temporary worker visas should add fuel to the fire of immigration opponents.

But next month’s trade mission should further confirm the extent to which both nations must rely on each other to ensure prosperity in the coming decades.

While India’s often onerous bureaucracy and still-developing infrastructure will remain barriers to growth, Locke’s main message will likely be that U.S. tech firms have pitched their collective tents in India and are unlikely to go anywhere in the near-term.