USIBC-U.S. Chamber divorce: ’Til New Delhi do they part

WASHINGTON — Less than a month after the U.S.-India Business Council (USIBC) filed to split from the U.S. Chamber of Commerce, citing irreconcilable differences, the divorce is complete. The USIBC, countering angry opposition from the chamber’s president and CEO Thomas J. Donohue, has since reconstituted itself as the U.S.-India Strategic Partnership Forum (USISPF).

The reorganization took place in New Delhi and its formal launch was presided over by Indian Finance Minister Arun Jaitley and with the blessings of Prime Minister Narendra Modi. Erstwhile USIBC chairman John Chambers has become USISPF chairman. Chambers is executive chairman of Cisco.

The USISPF announced that it is “committed to creating the most powerful strategic partnership between the U.S. and India,” and that “promoting bilateral trade is an important part of USISPF's work. But USISPF's mission reaches far beyond this. It is about business and government coming together in new ways to create meaningful opportunities that have the power to change the lives of citizens,” it said. “We are entering a new era based on a strategic partnership between the U.S. and India – one where we will work closely together with business and government leaders to achieve our goals of driving economic growth, job creation, innovation, inclusion, and entrepreneurship.”

The rupture between the chamber and the former USIBCs came amid acrimony and accusations. Donohue, at the helm of the chamber since 1997, had warned against a split, indicating he would not permit it and that the USIBC had no prerogative. He subsequently fired USIBC president Mukesh Aghi.

In New Delhi, however, the USISPF announced the return of Aghi as president and named Gaurav Verma as chief operating officer.

Chambers said that following the successful summit between Modi and President Donald Trump in June, he was “incredibly confident about the powerful partnership between the U.S. and India, which is one that I believe can serve as a model for the rest of the world. Our two countries will be able to make great strides in the months and years to come and USISPF is honored to be a part of this exciting future.”

Aghi called the launch of USISPF “a new chapter in the U.S.-India relationship, expressing confidence that “we will be able to elevate the U.S.-India partnership to new heights by prioritizing mutual opportunities that will benefit businesses, government and citizens in both countries.”

The USIBC had been funded by the U.S. Chamber, with the latter paying the salaries of the USIBC president and staff. USIBC membership dues and events, in turn, helped to beef up the U.S. Chamber coffers to the tune of $10 million. By contrast, the new USISPF is to be funded by membership fees and other donations.

“Every company that we asked for upfront donations, they all gave it,” Chambers said in India. He also disclosed that USISPF has support from various governments and political parties in the U.S. and India.

“Remember two years ago, I said U.S.’s most strategic partner in the world should be India and India’s most strategic partner in the world should be the US, and people looked at me... and now all of a sudden they are saying it can happen,” he said.

The USIBC-U.S. Chamber acrimony had been simmering for years with the consistent complaint being that Donohue was interfering with the USIBC agenda and criticizing the USIBC for what he termed pandering to the government of India.

In February, the chamber was part of a coalition of trade and other American business groups urging the Trump administration to “use all available channels to ensure fair play for businesses, investors and entrepreneurs across the United States, and to support Indian efforts that align with these goals.” The Chamber-funded Alliance for Fair Trade with India (AFTI) has bemoaned the glacial pace of action by the Modi government to address “core policy concerns,” and argued that “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.”

But USIBC had resisted the chamber’s efforts to get it to be aggressive with India on issues of concern and instead argued that it would be counterproductive in dealing with New Delhi, particularly with respect to the chamber’s suggestions to urge the U.S. trade representative to impose punitive measures against India.

USIBC officials charged that the chamber was constantly interfering in USIBC activities and events, calling Donohue authoritarian. It all came to a head when Aghi was reportedly forced to resign by Donohue, who said he had organized USIBC events without first consulting the chamber. The USIBC subsequently voted 29-0 to separate from the parent group. Donohue had written board members at the time, advising that they could not separate from the chamber without consent because the group had “no autonomous existence” outside the chamber.

Following the vote, a second letter from Donohue - written to the more than 350 USIBC members on July 11 – said the USIBC was part of the chamber and its board lacked legal authority.

Donohue also said in his letter that “all of the assets of the USIBC program are in fact the legal assets of the USIBC Chamber,” although in February 2011, the two sides had signed a Memorandum of Understanding that would also give the USIBC access to all of the funds it collected and raised, other than what it would have to provide to the chamber for administrative costs. 

Sources told India Abroad that the reconstitution angered the chamber which is now unlikely to release any funds and has not “given up exploring legal options” against “disaffected individuals” whom he claims drove the split.

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