India, US and a New moment

    Prime Minister Narendra Modi holds bilateral talks with US President Barack Obama in New York - Photo courtesy PTI
    Prime Minister Narendra Modi holds bilateral talks with US President Barack Obama in New York - Photo courtesy PTI

    Prime Minister Narendra Modi’s visit to the United States has taken place at a moment of significant opportunity for India. The Chinese economy, which had seemed invincible, has faltered and is facing deep structural problems. India is poised to become the world’s best performing economy, though there are still signs of sluggishness and it is imperative that both domestic and foreign investment be accelerated for its full potential to be reached. Against this backdrop, Modi’s program, replete with high-profile meetings with CEOs of US financial, media and technology companies and a well-attended public function with the Indian community, addressed the business and diaspora constituencies that have been central to the prime minister’s foreign outreach since he assumed office.

    American technology companies see India as the next big growth opportunity, given the difficulties in operating in China and the fast growth of the smartphone market and e-commerce in India.

    This was evident from the enthusiasm with which Modi was received in Silicon Valley by the chief executives of America’s best known technology companies, several of whom, like Satya Nadella and Sundar Pichai, hail from India. India’s goal to harness the digital revolution to skill its people, improve infrastructure and delivery of goods and services opens up exciting possibilities. For India, the challenge is to leverage these opportunities to create employment for the millions who enter the job market each year, and develop domestic technical and manufacturing capabilities.

    In the last years of the previous government, American investors had become wary of doing business in India on account of slow decision-making and the unpredictability of the regulatory environment. But the high expectations that the new government, with a solid majority in the Lok Sabha, would be able to smoothen out these tangles quickly and expedite reform have been moderated as several key initiatives like the land amendments and GST have been abandoned or failed to make progress. The unpredictability of the tax regime has been a major concern of foreign investors and this is still a work in progress. India needs to step up its game to create a conducive business environment. Equally, high US visa fees for Indian software engineers deployed there for short periods, numerical quotas and the absence of a tantalization agreement constrain the business of Indian IT companies in America. These issues need to be addressed if businesses are to build on their synergies.

    The three million-strong Indian American community has come of age and is a vital bridge connecting the people of the two countries. Modi has paid special attention to the overseas Indian community as an asset for India’s development and a force-multiplier in India’s diplomacy. This was again visible at the public function in San Francisco with the Indian American community.

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    This was not a bilateral visit, though Modi and President Barack Obama did meet – for the fifth time – on the sidelines of the UN. Climate change was uppermost on Obama’s agenda in the run-up to the Paris conference. With China having announced its intention to cap its emissions in 2030, there is pressure on India to announce its emission-reduction goals. Modi underlined that India will be a constructive player in Paris while keeping open avenues for meeting its developmental needs. In setting our national goals, Delhi needs to ensure that it does not disproportionately add to the costs of doing business in India. Affordable clean and renewable energy and energy efficiency hold the key to a less carbon-intensive future for India and it is here that an India-US partnership can bring real value to the table.

    Afghanistan faces an uncertain future post the withdrawal of US combat forces. The US, along with China, co-chaired a meeting on Afghanistan to which India was not invited. The US and Chinese efforts to stabilize Afghanistan with Pakistan’s cooperation should not lead to a situation that exacerbates terrorism challenges for India and the region. Continued support for strengthening the capacities of the Afghan government, particularly the army and the police, would be critical. There is need for candid discussions on Afghanistan between India and the US, and they have agreed to strengthen their consultations.

    Modi and Obama welcomed the progress made in giving shape to the joint strategic vision on the Asia Pacific and Indian Ocean regions and the joint engagement with regional powers like Japan. The upgraded trilateral ministerial consultations between India, the US and Japan were initiated on the sidelines of the UN. Japan is expected to participate in the Malabar naval exercise. Modi sought US support for India’s membership of the Asia-Pacific Economic Cooperation. Both India and the US have convergent interests in shaping an Asian balance grounded in international norms and conducive to peace and prosperity.

    The PM participated in the important UN Summit that adopted the Sustainable Development Goals. These set out an ambitious new agenda to end poverty by 2030 and promote shared economic prosperity, social development and environmental protection. India’s record on the Millennium Development Goals has been mixed, with considerable success in poverty reduction but more work to be done in health and education. The 17 new goals are in line with India’s national agenda for development, but achieving these would require renewed and sustained efforts by the government, civil society and the private sector over the next 15 years.

    The meeting of G-4 leaders shone a spotlight on UN Security Council reform, which has been languishing despite the growing recognition that the council, as it exists today, reflects the world as it emerged after World War II and needs to change to represent current realities and better fulfill its objectives. Four of the five permanent members of the Security Council, including the US, have expressed support for India’s candidature for permanent membership, while China has been ambivalent. Reform is likely to be a difficult process. The P-5 have been resisting change. A bottom-up approach -garnering support from members of the General Assembly combined with pressure from outside – would be required to generate momentum for Security Council reform.

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