When U.S. President Barack Obama touches down in New Delhi on Air Force one this weekend both he and his chief Indian interlocutor, Prime Minister Narendra Modi, will carry a heavy burden of expectations upon their shoulders.
While some may be distracted by the “optics” of their second meeting, which includes a Republic Day salute to Mr. Obama from India’s armed forces, a visit to Raj Ghat, a state dinner, a CEOs forum discussion and a speech by the American President, long-time observers of the bilateral space will be watching for breakthroughs in the broad policy agenda.
Boost to defence cooperation
The view appears optimistic in one area of cooperation above all others – defence trade. Sadanand Dhume of Washington’s American Enterprise Institute suggested to The Hindu that the promise for the most dramatic gains could be found in this sphere, even more so after “notoriously inert” former Defence Minister A.K. Antony was replaced by the “dynamic” Manohar Parrikar of the BJP government.
Here unintentional reciprocity may have brought the right partners to the table on both sides as the new U.S. Defence Secretary Ashton Carter is reputed to be a man who fundamentally supports deeper engagement with India, in a way that some of his predecessors did not.
Could the last year’s Defence Trade and Technology Initiative be the fertile ground that yields the much-needed moment of bilateral epiphany?
Milan Vaishnav of the Carnegie Endowment for International Peace argued that with fresh momentum imparted to the talks by these leaders there is a “reasonable chance” that two sides will come to agreement on a deal to co-produce and co-develop a new piece of defence hardware, defying the long-standing bugaboo of technology transfer and attendant insecurities.
Economy a core concern
Trade and investment in some ways comprise the very heart of the India-U.S. engagement, at least since Mr. Modi took over at the helm in South Block.
With the two nations meeting in November for the Trade Policy Forum, launching an infrastructure collaboration platform in December and discussing the “formidable” goals of the Prime Minister’s Digital India vision this month, the space has seen a flurry of activity aimed to consolidating the economic partnership even further.
Notwithstanding the promise of this economic diplomacy and the hope that the gradual lifting of Foreign Direct Investment caps in India will create jobs from Seattle to Sriperumbudur, some lingering concerns remain.
Among these, as U.S. Assistant Secretary of State for Economic and Business Affairs Charles Rivkin said at several forums here in recent weeks, there is a view that the Intellectual Property Rights protection regime in India is “philosophically” different to its U.S. counterpart.
While the broad expectation is that IPR and trade protection concerns are unlikely to go away any time soon, the action that truly set alarm bells ringing in Washington’s beltway appears to be the signalling effect of India’s refusal to sign the World Trade Organisation’s Trade Facilitation Agreement until an agreement was reached on food subsidies.
In this regard, Mr. Dhume says, “Though the U.S. and India have resolved their disagreement over the WTO’s TFA, India has ended up reinforcing its image among U.S. trade officials as a spoiler on global trade.”
Although getting the TFA back on track was an important step, there are a host of thorny issues, including trade protectionism, IPR and immigration and, “The biggest thing Obama is seeking is credible reassurance on the economic reform front,” noted Mr. Vaishnav.
How to assure Washington of this commitment to continued liberalisation?
In the short and medium term Mr. Obama may broadly seek assurances that the Prime Minister’s economic nationalism is not a “synonym for renewed protectionism,” and it may help if the Indian government continued to prioritise FDI flows and improve the ease of doing business.
In the longer term the Obama White House and any administration occupying that building after 2016 will be looking to ensure that American companies can partner with India on mega-scale economic initiatives such as “Make In India” and “Digital India.”
Civil nuclear dilemma
The 2008 civilian nuclear cooperation agreement between India and the U.S., which used to be the barometer of goodwill between the nations and was a de facto nod to Indian exceptionalism, has gotten mired in the tussle over India’s nuclear liability act and has witnessed much hand-wringing around the use of administrative rules to limit supplier liability in the event of an accident.
Could the Modi-Obama parleys resolve this riddle of the Sphinx over a weekend?
The view in Washington seems to be this: it may not matter.
Praise, or at least cautious optimism, is already accruing to the Modi government for adopting a “problem solving approach” especially given the Obama administration’s frustrations with the perceived intransigence of some in the UPA-II regime on the liability question.
Meeting of minds?
Finally a factor that may have a strong influence on the outcomes of bilateral engagement, even if it is not officially a part of the agenda, is the chemistry between Mr. Modi and Mr. Obama.
While the two men are viewed by some as the odd couple of global politics, Mr. Dhume argues, “Nobody would have predicted that the bookish former law professor would find common ground with the business-friendly former RSS pracharak but the two leaders do appear to have developed a degree of personal warmth toward each other.”
Ultimately, the consensus here appears to be, it is common interests, whether maintaining the balance of power in Asia, developing India's economy or combating terrorism, that drive the bonhomie between Mr. Obama and Mr. Modi, rather than the other way around.
If this blend of common interests and personal chemistry can produce a tangible breakthrough, even better.