‘It is in the interest of both sides that the visit is seen as being successful. Both sides have invested considerable political capital in it…….This rapid exchange of visits and the decisions taken have to be justified, beyond the symbolism, which is no doubt important in itself. This opportunity to impart a fresh momentum to ties should not be missed………. What we need is a pragmatic approach by both sides. On the side this is assured by Modi. He has shown that he is essentially pragmatic. The only principle he is attached to is India First”, says the author.
Prime Minister Narendra Modi’s ready acceptance of United States President Barack Obama’s invitation to visit Washington in September 2014 came as a surprise against the background of the visa denial humiliation heaped on him for nine years.
Modi’s invitation to Obama to visit India as chief guest at our 2015 Republic day celebrations came as an equal surprise, as did Obama’s acceptance at such short notice.
The messaging from both sides is clear. Modi wants to give a fresh impetus to the India-US relationship, seen as languishing for some time now. Obama has conveyed that he is ready to respond.
Now that Obama is coming and the two sides want to reinvigorate the relationship, the outcome of the visit will be watched closely not only in India and the US, but internationally too.
To look ahead, we should look backwards a little bit so that the potential for the future can be seen through a better understanding of the past.
There are no instant solutions to the issues in India-US relations. The US demands in many cases require policy, legislative and administrative responses by India, not to mention care by us that a balance in our external relations is maintained.
Obama had said during his visit to India in 2009 that he saw the India-US relations as potentially a ‘defining partnership of the 21st century.’ It is very hard to define what a defining partnership is, but what he meant presumably is that relations between the oldest and the largest democracy, between the world’s foremost economic power and, in time, the third biggest economy will define the contours of international relations in the decades ahead.
Our leaders say that India and the US are natural partners. This is not borne out objectively by the history of the relationship, the differences that currently exist on a whole host of issues and the inherently unequal nature of the relationship.
The US is the world’s only superpower with global interests whose contradictory pulls and pressures they have to manage even in our region, and we are not even a credible regional power yet.
If the argument is that it is the shared values of democracy, pluralism and respect for human rights make us natural partners, then the US relationship with Pakistan and China — often at our cost — which are not democracies, has to be explained. US interests often take precedence over its declared values.
Even if rhetoric does not measure up to realities, the fact remains that improvement of India-US ties has been the most important development in India’s external relations in the last decade.
It is the 2005 nuclear deal that opened the doors to a transformative change in bilateral ties. Reflecting the new intensity of bilateral engagement, about 28 dialogues were set up between the two sides covering the fields of energy, health, education, development, S&T, trade, defence, counter-terrorism, nonproliferation, high technology, innovation etc.
The US now supports India’s permanent membership of the UN Security Council in principle. It is backing India’s membership of the four international export control organisations — the Nuclear Suppliers Group, the Missile Technology Control Regime, the Wassenaar Arrangement and the Australia Group.
Trade in goods and services between the two countries has grown to almost $100 billion (about Rs 620,000 crore).
A big breakthrough has been made in defence. In the last five or six years the US has bagged defence orders worth about $10 billion (about Rs 62,000 crore). These include C-130, C-17 and P-80 I aircraft and heavy lift, attack and VIP helicopters. The US has emerged as the biggest supplier of arms to India in this period.
The US has proposed joint manufacture of several defence items in India under its Defence Trade and Technology Initiative. While India has overcome its mistrust of the US and fears that at critical moments the US may cut off spares for its equipment as part of its liberally used sanctions instrument, India has been reticent in its response to the DTTI, possibly because it is still not convinced that the US will transfer the technologies that India would want or not tag unacceptable conditions to it.
The US proposed at one time three ‘foundational’ agreements covering the areas of logistics, interoperability and access to high technology equipment, but India has been cautious, presumably because it was concerned about slipping into the US defence orbit and losing its autonomy.
To balance this, India and the US have been conducting a large number of military exercises, far more than with any other country. The naval exercises in the Indian Ocean to protect the sea lanes of communication are particularly important because of their geopolitical implications. Trilateral India-US-Japan naval exercises have obvious significance.
In Obama’s second term, however, the ties lost momentum for various reasons. Economic reforms in India slowed down, its growth rates fell, India was seen as reluctant to deepen the strategic partnership, it was lukewarm to the US pivot towards Asia, US nuclear firms saw their business opportunities in India blocked because of our Nuclear Liability Act, major US corporations began campaigning against India’s trade, investment and intellectual property rights policies in the US Congress and instigated investigations into them by the US International Trade Commission and the US Trade Representative.
The US began criticising India for being a fence sitter, a free-loader on the international system because of its reluctance to uphold it even at the cost of its interests as other Western powers were supposedly doing. This was the sense of the ‘burden sharing’ demand of the US.
India had its own complaints against the US regarding the implications of the new US immigration legislation for India’s IT industry, the movement of its professionals, the increase in cost of H1B and L1 visas, the totalisation agreement and outsourcing.
During his Washington visit, Modi struck an unexpectedly good rapport with Obama who accompanied him personally to the Martin Luther King Jr Memorial and later in Myanmar described him as a ‘man of action.’
Modi clearly signalled during the visit that he intends to reinvigorate bilateral ties and that he views them as vital for his development agenda at home.
The joint press conference by the two leaders and their joint statement set an ambitious agenda, with many positives, if all goes according to plan.
The two leaders agreed to increase the bilateral trade five-fold to $500 billion (about Rs 36 lakh crore).
Modi asked publicly for more openness and ease of access to the US market for Indian IT companies, even if Obama failed to give any response.
In order to raise investment by institutional investors and corporate entities, it was agreed to establish an Indo-US Investment Initiative led by India’s finance ministry and the US department of treasury, with special focus on capital market development and financing of infrastructure.
It was also agreed to establish an Infrastructure Collaboration Platform convened by the ministry of finance and the US department of commerce to enhance participation of US companies in infrastructure projects in India.
Modi invited the US to send two trade missions to India in 2015 focused on India’s infrastructure needs with US technology and services.
It was decided to activate the Trade Policy Forum that had not been convened for a long time. An empowered annual working group was approved for addressing IPR issues and it was agreed to set up a contact group for implementing the India-US civil nuclear deal.
US involvement was sought in the railways sector and in smart city projects (Ajmer, Visakhapatnam and Allahabad).
It was also agreed that USAID will serve as knowledge partner to support Modi’s 500 Cities National Urban Development Mission and Clean India Campaign.
Obama offered to reinvigorate the higher education dialogue, which has languished. He welcomed India’s proposal to establish the Global Initiative of Academic Networks under which India would invite and host up to 1,000 American academics each year to teach in centrally-recognised Indian universities, at their convenience.
The decisions and understandings reflected in the joint statement on the energy front are potentially problematic as they could give the US more handle to put pressure on India on climate change issues.
Both leaders expressed their commitment to work towards a successful outcome in Paris in 2015 of the conference of the UN Framework Convention on Climate Change, including the creation of a new global agreement on climate change.
The two leaders, in recognition of the critical importance of reducing greenhouse gas emissions and improving resilience in the face of climate change, agreed to ‘a new and enhanced strategic partnership’ on energy security, clean energy, and climate change, to further which a new US-India Climate Fellowship Programme to build long-term capacity to address climate change-related issues in both countries was launched.
A MoU was concluded between the Export-Import Bank and the Indian Renewable Energy Development Agency, which would make up to $1 billion (about Rs 6,200 core) in financing available to bolster India’s transition to a low-carbon and climate-resilient energy economy, while boosting US renewable energy exports to India.
Modi and Obama stated their intention to expand defence cooperation to bolster national, regional, and global security. This broad-based formulation has important geopolitical implications. They agreed to renew for ten more years the 2005 Framework for the US-India Defence Relationship with plans for more ambitious programs and activities.
They welcomed the first meeting under the framework of the DTTI in September 2014 and its decision to establish a task force to expeditiously evaluate and decide on unique projects and technologies for enhancing India’s defence industry and military capabilities.
To intensify cooperation in maritime security, the two sides considered enhancing technology partnerships for India’s Navy, besides upgrading their existing bilateral exercise Malabar.
They committed to pursue provision of US-made mine-resistanta ambush-protected vehicles to India.
On terrorism, they stressed the need for dismantling of safe havens for terrorist and criminal networks, to disrupt all financial and tactical support for networks such as Al Qaeda, Lashkar-e-Tayiba, Jaish-e-Mohammad, the D-Company, and the Haqqani Network.
The two countries also expressed the intention to start a new dialogue on space situational awareness.
Obama affirmed that India met MTCR requirements and was ready for NSG membership. Noting India’s ‘Act East’ policy and the United States’ rebalance to Asia, the leaders committed to work more closely with other Asia Pacific countries through consultations, dialogues, and joint exercises. They underlined the importance of their trilateral dialogue with Japan and decided to explore holding this dialogue among their foreign ministers.
Modi spoke of great convergence on the issue of peace and stability in Asia-Pacific and more joint exercises with Asia-Pacific countries.
Very significantly, he stated that the US was intrinsic to India’s Look East and Link West policies, according thus a central role for the US in India’s foreign policy.
They agreed to continue close consultations and cooperation in support of Afghanistan’s future.
The principal points agreed during Modi’s visit will serve as a guide to what can be realistically achieved during Obama’s visit. To assess that, we should take into account some limitations and negatives that mark the India-US relationship.
Already, what was agreed to is mostly not capable of quick implementation or rapid results. These are largely medium term objectives and not always clear in implications. In the course of implementation, many issues will provoke internal political debates, will require detailed processing and negotiations, parliamentary approval and intensive diplomatic effort on the international front by both parties. In some cases real differences have been glossed over by use of diplomatic language.
On IPR issues it will not be easy to reconcile US demands on IPRs and our position that our IPR policies are in conformity with the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights agreement. Legal issues involving our courts are involved.
The USTR decided to put unilateral pressure on India by investigating India’s IPR policies under Section 301, but this has been halted in November 2014 in view of some forward looking announcements by the Modi government. The USTR’s ‘cautiously optimistic’ statements during his Delhi visit in November suggest that the US will wait and watch what the Modi government actually delivers.
The US Congress has extended the investigation of India’s investment, trade and IPR policies by the USITC by another year.
On climate change issues, under cover of its ‘political’ agreement with China, the US seems determined to put pressure on India to agree to some reduction commitments. In actual fact, this is political pressure unrelated to the merits of India’s case. Climate change is a multilateral issue, but the US is making it a bilateral one, with the commercial interests of its companies in mind.
While the US claims that what it is offering under the DTTI has the green light from all those in the US who control technology exports, it can be doubted whether the US will be as liberal in transfer of technologies as it would have us believe. The US record in this regard with even its allies and partners is not inspiring.
The US has shown no activism in pushing for India’s membership of NSG or MTCR as a start. It is to be hoped that it is not looking
for a resolution of the nuclear liability issue and the finalisation of the vexed question of ‘administrative arrangements’ that is needed to complete the India-US nuclear deal before
it does the heavy lifting again to promote India’s membership of the cartels in question.
Surprisingly, the list of terror organisations against whom US and India have agreed to work together excludes the Taliban, pointing to a crucial difference between the two countries on the issue of accommodating this extremist force with its close Pakistani links into the power structure in Afghanistan.
In reaching out to the Taliban the US gives priority to orderly withdrawal of its forces from Afghanistan, treating India’s concerns as secondary. The language on Afghanistan in the Modi-Obama joint statement in Washington was remarkably perfunctory.
Worse, the US wants to retain complete freedom of action in dealing with Pakistan, irrespective of India’s concerns about its continuing military aid to that country. General Raheel Sharif, the Pakistani army chief, was accorded high level treatment during his recent visit to the US, meeting Secretary John Kerry who indirectly endorsed the role of the Pakistani army in nation building and politics by terming it as a truly binding force.
It is worth recalling that after accepting the invitation to visit India, Obama felt diplomatically obliged to phone Premier Nawaz Sharif to say he could not visit Pakistan now and would do so later.
The US involvement in developing our inadequate infrastructure — our ports, airports, railways highways etc — seems unrealistic as its companies are hardly likely stand up to international competition in India.
As regards our nuclear liability legislation, it appears that the US government may be moving away from its fundamentalist position that supplier liability cannot be accepted and may be open to some practical solution to the issue in terms of limiting the liability in time and costs. The lawyers at Westinghouse and General Electric will, of course, have to be convinced.
This is a highly charged issue politically and it is doubtful whether the decks can be cleared before Obama’s visit. The larger question of the economic viability of US-supplied nuclear power plants remains, not to mention the fact that GE does not have as yet a certified reactor.
Work on a bilateral investment treaty will take time It appears that our side wants to be able to announce a couple of projects under the DTTI during Obama’s visit. In this connection anti-tank missiles, naval guns, pilotless aircraft and magnetic catapult for our aircraft carrier are being mentioned as possibilities.
The US would want at least one project to be announced. Defence Minister Manohar Parrikar has let it be known publicly that US proposals are being seriously examined.
The announcement of a more ambitious Defence Cooperation Framework Agreement valid for another 10 years is a certainty.
The government’s decision on the GST, raising the FDI ceiling in insurance, the amendment to the land acquisition law are advance signals of its commitment to reform and attracting FDI, which is a positive from the US point of view.
The emphasis on Make in India and developing India’s manufacturing sector, coupled with a commitment to ease doing business in India, have begun to change investor sentiment towards India, and this creates a better atmosphere for Obama’s visit.
It is in the interest of both sides that the US President’s visit is seen as being successful. Both sides have invested considerable political capital in it.
This rapid exchange of visits between the two leaders, leaving little time to process the decisions taken in Washington in September, has to be justified, beyond the symbolism, which is no doubt important in itself. This opportunity to impart a fresh momentum to ties should not be missed.
But there is need also to be clear-headed about the relationship that is not easy to manage given US power, expectations, impatience and constant endeavour to do things the way it wants.
It is a bit disturbing that an atmosphere has been created in which the focus is on what we can do for the US and Obama and not what the US must do to meet our needs and concerns. The agenda has become one-sided.
The US should not expect India to support all its demands and polices, however questionable. India does not have to prove it is a responsible country by supporting even irresponsible US policies. Of course, India too should not expect the US to always adjust its policies to suit us.
What we need is a pragmatic approach by both sides. On the side this is assured by Modi. He has shown that he is essentially pragmatic. The only principle he is attached to is India First.
(By Kanwal Sibal who is a former Foreign Secretary of India)