Kalyani Shankar
New Delhi is all decked up to give a red carpet welcome to the American President and this year’s Republic Day chief guest Barack Obama this weekend. This will be the first time an American President will grace the occasion. The Obama couple will watch the impressive parade when India showcases its achievements by way of floats representing different states and its military might from a special enclosure along with Indian President Pranab Mukherjee.
Obama’s visit, the second in four years, has generated significant excitement in diplomatic, strategic and business circles on both sides, and clearly, India and the U.S. would like to deepen and broaden the Indo-US partnership.
While it may be a ceremonial visit, using the opportunity Obama will also discuss important bilateral issues. Indications of the American interest in India came when the US Secretary of State John Kerry, Commerce Secretary Penny Pritzker, Defense Secretary Chuck Hagel and then-Deputy Secretary of State William Burns all came to New Delhi within 100 days of Prime Minister Modi taking over and Modi’s visit to Washington in September last. Kerry had recently not only participated in the Vibrant Gujarat show but also was obviously impressed.
Many hawks in India view the visit with a cautious optimism. In the past two years the Indo-US relations had gone a little sour after the peak in 2008 when Indo-US deal was signed. Americans are a little upset that New Delhi was not doing enough on several key issues like market access, civil nuclear cooperation, Iran and climate change. Economic reforms in India slowed down, its growth rates fell. India too has been disappointed on issues like transfer of technology and liberalised visa regime. Even the diplomatic relations between New Delhi and Washington had soured after the Devyani Khobragade case.
To the surprise of all, Modi’s visit to Washington in September last year was a great hit which paved the way for Modi inviting Obama and the latter accepting the invitation. He has even advanced his State of the Union address to the Congress.
When two leaders meet there are always expectations.
What are the expectations from both sides? Kerry has identified four broad issues – climate change, defence, nuclear and economic. New Delhi would like American investment in India in education, transfer of technology, environment, climate change and investment in smart cities. The US has already identified Ajmer, Allahabad and Visakhapatnam for building smart cities.
Topping the list would be the economic ties. The Modi government’s decision on the GST, raising the FDI ceiling in insurance, the amendment to the land acquisition law and changes in labour laws are Modi’s signal to the Americans. While the US would wait whether Modi would deliver his assurances, New Delhi would watch whether the American business would invest in Modi’s pet project of ‘make in India.’ Although Modi has shown his intention by promulgating eight ordinances to improve the business climate, they would become a reality only when Parliament approves them.
On trade, during his presentation to the vibrant Gujarat conference, Kerry underscored that the United States wanted to increase trade with India to $500 billion a year, a significant leap from $97 billion in 2013.
The second important issue on the table would be the civil nuclear energy. Despite the hype on the 2008 Indo-US nuclear deal, the stringent nuclear liability law passed by Indian Parliament subsequently, has scared away both domestic and foreign suppliers of nuclear power plants.
The Government is trying to overcome this by working on an insurance pooling plan that might indemnify the suppliers of nuclear components to resolve then logjam, which will be an important deliverable.
The third is the climate change. As the latest issue of the Time magazine predicts, “the emphasis during the Obama visit will be on securing India’s backing for a global climate deal at a planned international summit in Paris at the end of the year. As the world’s third largest carbon polluter, India’s agreement is seen as key to securing an international accord to cut emissions. ” Both sides are expected to give a major push for renewable energy with the U.S. set to offer a grant to purchase energy efficient technologies. It can provide business opportunities of up to $40 billion as India wants to ramp up to 100,000 MW in the next five years.
The fourth would be on security and strategic issues. New Delhi wants updated defence technologies and not just buys equipment. The extension of the military cooperation, which was signed in 2005 for another ten years, is also on the cards. Pentagon has apparently given license approval for the co-production of two projects and even set aside USD 20 million for strategic co-operative science and technology projects with India. In November, the Indian defense ministry had cleared $2.5 billion deal to buy M777 guns from the U.S. Also under the Defence Technology Trade Initiative (DTTI), the Pentagon has given a list of 17 proposals for joint development and production for New Delhi’s consideration.
The visa issues that India has flagged are caught up in the immigration reform process in the United States. New Delhi seeks a liberalized visa regime and a waiver on mandatory social security contributions. India accounts for 64 per cent of the US work visas given to foreign nationals while China comes second with just 8 per cent. There are other important issues like Afghanistan and the US pull out, Pakistan and its terror regime; China’s expansion plans may all come during discussions. For once, both sides are keen that the visit is more than photo ops and optics. Even if half of what is on the table could be resolved the visit would be considered as a success. The fact that the negotiations are going on till the last minute shows that the focus is on what the diplomatic circles call deliverables. Both New Delhi and Washington want to make this visit productive. So it all depends on who blinks first. (IPA Service)
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