Ready for take-off

New Delhi, July 5: The US is putting pressure on India to sign an open-sky agreement and buttressing its arguments by saying that it will boost trade between the two countries which touched $18 billion in 2003.

“Open-sky agreements stimulate trade and commerce by creating new markets for cargo and businesses,” said Karan K. Bhatia, US assistant secretary for aviation and international affairs.

Bhatia, who was addressing a meeting organised by the Federation of Indian Chambers of Commerce and Industry (Ficci), said transportation links between India and the US would serve to strengthen the Indo-US partnership.

The US carriers are interested in India and are increasingly eyeing it as a potential destination. An open-sky agreement has been discussed between negotiating teams for the two sides and also with minister of state for civil aviation, Praful Patel.

“I met with the US transportation secretary, Norman Y, Mineta prior to my trip and can assure you that he is very interested in India and in seeing the bilateral economic relationship between our two countries flourish, especially in the transportation sector,” he said.

Making out a strong case for the open-sky agreement, Bhatia said it would benefit the two economies by not only promoting trade, commerce, travel and tourism, but also create new jobs and wealth.

Further, it would benefit passengers travelling between the two countries and the importers and exporters who use cargo service by affording them new carriers, new routings and new service options.

“We believe it will also lower prices and stimulate demand,” Bhatia said.

Elaborating other benefits, which will accrue after the agreement between the two countries, he said air-carriers operating under liberalised aviation agreements have been able to grow and expand into new markets.

These agreements create new opportunities for service that increases the traffic pool available to airlines in the market by creating new incentives for efficient airline operations and by creating new opportunities for partnerships between airlines.

Despite interests on both sides, carriers are constrained by the outdated bilateral agreement governing air services between India and the US, which has remained unchanged for nearly 50 years now, the US official said.

“Airlines need a lot of flexibility. They need the freedom to enter and exit markets and to adjust their schedules and prices in response to rapidly changing market conditions. They also need the freedom to enter into joint ventures to expand services,” Bhatia said.