About the Knowledge Trade Initiative

Background:

The Knowledge Trade Initiative (KTI) is framed against rapidly improving ties between India and America. With the recent exchange of Presidential and Prime Ministerial delegations, as well as a myriad of trips by other dignitaries, relations between our two nations are perhaps the best ever since India’s independence. In many ways, the improved ties are a natural development for two large, diverse democracies with much in common. A better explanation, however, for the improved political ties can be found in the improved economic ties.

India and America are leading players in the Information Technology revolution. The information economy is driven by human capital, and as the two largest global suppliers of IT engineers, each will play a pivotal role in the information age. As demonstrated by the recent World Trade Organization Ministerial meeting in Seattle, however, fundamental differences still exist between the two countries. Issues related to the IT sector, where each country shares a common role as an industry leader, could provide the forum in which Indian and American interests intersect, and provide the foundation to a lasting economic and political partnership between the two.

Though many signs are positive, there remain many challenges. In each of the subject areas of the KTI, much work remains to be done. Furthermore, though India is currently an IT destination of choice, drawing largely upon its large supply of English speaking, low-cost, well-educated, engineers, India should not take this advantage for granted. Other countries are replicating this model for success, often without having to work through a democratic system as robust and participatory as India’s. More and more, India’s workforce advantage will be replicated elsewhere. India needs to develop the hard and soft infrastructure of its IT sector in order to ensure its long-term, sustainable advantage in this sector.

If effectively harnessed, the digital opportunity provides extraordinary opportunities for strengthening democracy and expanding prosperity to all citizens. It is estimated that the global market for IT services will be US$585 million in 2004. Furthermore, annual ecommerce transactions are rapidly approaching US$1 trillion annually. Should India and America come together on the issues promoted in the KTI, each stands to be a major player in this global market, and together, leading partners in the information age.

What:

The Knowledge Trade Initiative is a public-private dialogue aiming to broaden and deepen the commercial ties between Indian and America in the knowledge based industries. While the Initiative will focus on the better-known knowledge based industries, such as software and IT enabled services, we will also consider the concept of knowledge based industries broadly. Other less-developed industries that are driven by the exchange of knowledge, such as biotechnology and entertainment, will be key players in the Initiative.

When:

The KTI will be a year long dialogue, culminating with the publication of a final report in India and the U.S. to an audience of leading government, industry, and academic stakeholders in September 2001. In this year, there will be two major KTI events, the first in India, and the second in Washington, D.C. Other events focusing on key KTI initiatives will occur throughout the year. The KTI will come to a close in September 2001. An ongoing forum for these issues will be formed if such a forum has a clear mandate and widespread support. A calendar detailing initial KTI events is attached to this document.

Who:

The KTI will be a self-sustaining enterprise under the administrative auspices of the U.S.-India Business Council (USIBC) in the U.S. and Federation of Indian Chambers of Commerce and Industry (FICCI) in India. KTI will have its own identity, be funded by its own sources, and draw upon stakeholders beyond those typical of an industry association. The KTI will provide the marketplace in which ideas are presented, deliberated, and given voice. The drivers of the KTI, however, will be key Indian and American stakeholders in each of the focus areas. Stakeholders include:

Industry: The KTI will be industry led. Key American and Indian industry leaders in the knowledge based industries will drive and fund the Initiative. Current American members include: Oracle, Sun, Cisco, AIG, WebMD, and the Chubb Corporation. Indian members include: S. Kumars, Global Tele-Systems, Modi Enterprises, ESSAR Group, and Bharti Enterprises. We will call upon general USIBC and FICCI members, when appropriate, to inform the KTI dialogue and serve as advisory experts to KTI working groups.
Associations: The KTI will be supported by key industry associations in our two countries. Current Association partners on the American side include: Coalition of Services Industries (CSI), Motion Picture Association of America (MPAA), The indUS Entrepreneurs (TiE) and the US Chamber of Commerce (USCC). Indian Association partners include: the Indian Council for Research on International Economic Relations (ICRIER), National Association of Software and Service Companies (NASSCOM), and the Council of Scientific and Industrial Research (CSIR).
Academia: Leading American and Indian academics will also inform the dialogue. Current American partners include: Stanford University, NYU Stern Business School, and Georgetown University.
Government: The KTI will work closely with government and multilateral institutions to advance KTI issues. Close working relationships will be forged with USAID, The World Bank, The Department of Commerce, ICICI, SEBI, IDBI and the Ministries of Finance, Information Technology, Communications and Commerce.

Objectives:

The KTI will provide a year-long forum in which the leading stakeholders of India and America’s digital economy come together to examine impediments to, and opportunities for, commercial ties between our countries in this sector. By the end of the year, we will:

Project India and the United States as cooperative, major and progressive actors in the emerging global information economy;
Evolve a track of constructive bilateral cooperation between our governments in the knowledge sector;
Generate sound, feasible, forward-looking recommendations for policy reform that advance the economic interests of both nations;
Provide concepts and principles that may guide future world discussion of issues related to knowledge trade;
Foster technological and regulatory leapfrogging in the development of India's information technology and communications infrastructure;
Document and make recommendations for realizing the benefits to both countries and to the world of expanded trade in the range of knowledge-based industries, including, but not limited to, basic science, biotechnology, film and entertainment, financial services, medicine, research-based pharmaceuticals, and video animation;
Project KTI members as leaders in their chosen fields;
Develop conferences, meetings and other public forums in which KTI issues are addressed; and
Deliver a final project report that details the findings of the KTI, impediments to the market, and recommendations for institutional, policy and legal reform to maximize the potential in this arena.