Finds attempt to control its activities unacceptable

The U.S. India Business Council (USIBC), a forum of companies that seek to promote business cooperation between the two countries, has decided to delink from the U.S. Chamber of Commerce and function as an autonomous entity. The board of the Council made the decision after it found the Chamber’s attempt to control its activities unacceptable, sources familiar with the matter told The Hindu.

The USIBC office will move out of the Chamber’s iconic building that overlooks the White House, but a final effort for reconciliation will be made next week. The Chamber considers the USIBC a “programme” under its umbrella, a view that the board of the USIBC found unacceptable.

Overwhelming vote

The board, chaired by CISCO chairman John T. Chambers voted 29-0 for operating as an independent entity last week and informed the Chamber. Four members were not present.

The 400-member USIBC is the fastest growing segment of the U.S. Chamber, adding nearly 150 new members in the last three years. MasterCard, Pepsi, Lockheed Martin, Boeing and Federal Express are on the board that decided that the USIBC must maintain its policy and financial autonomy in the face of Chamber of Commerce interference.

The U.S. Chamber houses bilateral councils for several other countries, but USIBC and the U.S.-China Council are the most prominent. While the China Council is plateaued, the USIBC continues to grow as U.S companies seek to expand business in India.

USIBC sources said it was established as independent entity in 1975, with the Chamber providing financial and HR services to it. When a dispute arose in 2011 on the relationship between the two, an MoU was signed, spelling out the terms of engagement, a source said.

On Tuesday, Chamber President and CEO Tom Donohue told USIBC members the council “is part of the Chamber, and it “will not consent to the demands of a group of disaffected individuals who seek to impact the USIBC’s entire membership by moving USIBC out of the Chamber, where it has operated for decades, into a new entity.” The Chamber also announced the resignation of Mukesh Aghi as the President of the USIBC. Mr. Aghi refuted the claim in an email to the USIBC board, seen by The Hindu.

Both sides are now readying their legal teams, but USIBC had made a detailed plan including office space in downtown Washington DC, one source said, before taking the plunge. Roughly 20 percent of USIBC members are separately members of the Chamber also, and that arrangement could continue. The 78-year-old Mr. Donohue has been at the helm of the Chamber since 1997.

The Chamber and the USICB locked horns several times in recent years on questions related to India. Mr. Aghi, close to the Narendra Modi government in New Delhi, pursued a non-confrontational approach while pushing for policy reforms sought by American companies. The difference in approach has been starkest in matters related to Intellectual Property Rights.

Mr. Aghi made a case against downgrading India in the U.S Special 301 Report on IPR in the last two years, while the Chamber argued for stringent measures against India and its Global Intellectual Property Center (GIPC) targets India in annual reports. The USIBC successfully lobbied the U.S Congress to pass legislation that designated India as a major defence partner, a move that Chamber’s establishment veterans did not support.

The Chamber also supports and funds Alliance for Fair Trade with India (AFTI) a campaign that seeks to put India in the dock. “While U.S.-India dialogue on a range of issues has improved since Prime Minister Narendra Modi was elected, it has not resulted in concrete action or substantial improvements to address core policy concerns…India's failure to comply with international trade obligations is not only damaging exports and jobs in the United States, it is also harming India’s own economy by weakening innovation,” AFTI says on its website and urges President Donald Trump and the Modi government to resolve these pending issues. Members of the USIBC board are more inclined to follow the path of persuasion with the Modi government than head on confrontation, according to one source. “Therefore we decided that we must maintain our policy autonomy,” he said.