Jun 21, 2023 - Economy

Modi state visit sends strong signal about U.S.-India business ties

Photo illustration of India's Prime Minister Narendra Modi standing and waving in front of US and India flags

Photo illustration: Annelise Capossela/Axios. Photo: Prakash Singh/Bloomberg via Getty Images

Apple, FedEx and Marriott CEOs are reportedly among business leaders invited to tomorrow’s state dinner for India’s Prime Minister Narendra Modi at the White House.

Why it matters: Their attendance emphasizes a key signal of Modi’s first official state visit — that the U.S. and India are strengthening political and economic ties amid drifting relations between the U.S. and China.

Catch up quick: Modi has visited the U.S. several times since taking office in 2014, but this week is his first state visit, which involves more ceremony than official visits.

  • Ahead of his trip, India’s Cabinet greenlighted a new semiconductor testing and packaging facility for U.S. chipmaker Micron to be built in Gujarat.
  • Elon Musk also met with Modi yesterday in New York, where the Tesla chief told reporters that Tesla intends to make significant investments in India.

The big picture: India holds the gaze of global corporations as they look for new sources of labor and revenue growth outside of China.

  • India has already overtaken China as the most populous country in the world, and it's expected to contribute over 15% of the global GDP growth this year.

What they’re saying: “The entire global business community, but particularly the U.S. community, is looking for an alternative to China,” Joe Foudy, professor of economics at the NYU Stern School of Business, tells Axios.

  • Modi specifically “is really driven to improve the business environment and make clear that India is open for business.”

What to watch: Whether deepening economic ties will prompt Modi and his ruling party to speak out more actively against ethnic violence in India as the U.S. looks to the alignment of democratic values.

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