Both sides have a long wish list

In their 46th but most awaited bilateral dialogue this year, India and the U.S. will seek to narrow down their divergences on a host of issues ranging from civil nuclear, immigration reform and trade to Afghanistan besides taking stock of progress made by their 30 Plus dialogue mechanisms, External Affairs Ministry sources said.

In the first meeting between U.S. Secretary of State John Kerry and his counterpart Salman Khurshid, both sides would be sizing up each other especially with South Block feeling that Mr. Kerry has been soft on terrorism because of his close ties with Pakistan’s political and military leadership. His speech on Sunday did little to assuage that feeling as he did not mention terrorism and Pakistan in one breadth, a staple of Hillary Clinton’s observations at the previous three editions of India-U.S. Strategic Dialogue.

Both sides have a long wish list, both at the bilateral and regional level, and Indian officials here caution against the visit producing a breakthrough in any of the major areas such as export of U.S. shale gas, setting up U.S. nuclear reactors in India, less punitive visa rules for Indian IT professionals, a bilateral investment protection agreement, preferential marketing arrangement and higher foreign direct investment limits in defence and insurance.

Strategy in Afghanistan

They are also at odds over the strategy for ending violence in Afghanistan and in an atypical gesture India officially staked out its position on integrating the Taliban which was different from the U.S. line. “We are on a different trajectory though the broad strategy of both countries is similar. We don’t agree on quick-fix solutions,” said Indian diplomatic sources.

Having done most of the heavy lifting for India at the Nuclear Suppliers’ Group, the U.S. keenly seeks a breakthrough in the nuclear energy field. But the reactor design of one company promised six reactors is yet to be cleared by the American regulatory authority. Another company, with the design cleared by the regulator (one could cost over Rs. 40,000 crore). However, it is still discussing two crucial aspects. That is why Indian diplomats discounted the possibility of an early works agreement with Westinghouse on the sidelines of the dialogue.

India’s major concern is about tough immigration laws imposing stiff upfront visa fee payments for software professionals. New Delhi says this is non tariff barrier impeding legitimate business activity than an attempt to streamline immigration laws. On the other side of the fence, the U.S. wants an early bilateral investment protection agreement but New Delhi says some of its crucial bits are still being formulated by the Finance Ministry.

Lack of progress on all these issues does not mean a faltering relationship as compared to the Bush era, assure Government officials. The two are in step over improving political and trade ties among India and the U.S. allies in Southeast and East Asia, the U.S. and its friends in the Middle East have helped New Delhi make up for the cut back in oil imports from Iran and defence imports from the U.S. crossed Rs. 50,000 crore in three years.

A stronger relationship in the field of education in the coming days would maintain people-to-people ties even if the flow of Indian professionals is likely to ebb.