Obama state visit fortifies Indo-US ties - Atasi Das
The President of the United States of America, Barack Hussein Obama’sfour day state-visit to India during November 2010 has turned a new leaf in Indo-US relations.
Indo-US joint statement: Main points
- Indo-US partnership is ‘indispensable’ for global economic prosperity and stability; the US supports India’s permanent membership bid in a “reformed” United Nations Security Council.
- The US also supports India’s full membership bid at the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group and the Wassenar Arrangement; a full membership will allow India to actively participate in the formulation of the trading rules.
- Bharat Dynamics, Defence Research & Development Organisation (DRDO) and Indian Space Research Organisation (ISRO) will be struck off from the US Department of Commerce “Entities List”. Export restrictions are imposed on US ‘dual-use high technology’ products (vital for space and missile programmes) to the enlisted organisations.
- Promotion of Indo-US civil nuclear energy cooperation
The Deals
Obama concluded business deals worth $ 15 billion with India, taking home around 53,670 US jobs. Indian low-cost airlines, SpiceJet will purchase 30-aircrafts from US based aircraft manufacturer, Boeing; the consignment will be delivered in 2014 to 2018 and will generate 12,970 US jobs. India will also purchase 10 C-17 Globemaster III military cargo planes from Boeing for $ 4.1-billion, creating another 22,000 US jobs.
A $ 2-billion worth General Electric (GE)-Reliance Power deal had been sealed in October, involving the 2,400-Mw Samalkot gas-based power plant in Andhra Pradesh; the US will export the assembled turbines to India. US based Export-Import Bank has financed this GE contract.
A joint Indo-US clean energy research centre will mobilise $ 100-million worth of public-private funding in the next five years, towards investment in ‘breakthrough technologies’ in alternative energy options, like solar energy, bio-fuels and ‘building efficiency’.
Talks are afoot for an Indo-US joint partnership $ 10-billion Infrastructure Debt Fund, which will finance road, railway and port construction projects, through public-private partnership. Indian infrastructure companies are currently crippled by a dearth of long term funding options (10 to 20 years) and expect around $ 1 trillion investment in the infrastructure sector in the 12th Plan starting April 2012, from foreign and private funding.
India and the US will co-operate in the field of shale gas, human space flight, the international space station and future lunar missions. Scientists from both countries will work towards the creation of accurate monsoon forecast models and the US Centers for Disease Control will aid India in forecasting the outbreak of infectious diseases.
A Comprehensive Economic Partnership Agreement involving ‘trade, investment and services’ is reportedly also on the rollout. Manmohan Singh and Barack Obama have also announced a higher education summit in 2011 towards fostering collaboration in the educational sector; the leaders have also agreed to augment their funding for the ‘Fulbright-Nehru Scholarship’ programme.
Analysis
Obama wants future Indo-US trade relations to be based on the ‘promotion of shared prosperity’; with a 9.6 per cent unemployment rate back home, he wants a share of India’s rising trade surplus. In a bid to correct its trade imbalance with India, the US has persuaded India to purchase American defence equipment for its armed forces and US planes for civil aviation. It has also tried to convince India to do away with protectionist measures. Earlier, differences over issues like agricultural tariff between developed and developing nations had led to the dissolution of the Doha round of trade talks.
India’s current trade surplus has been earned mostly on the back of garments, jewellery and software exports; India now wants to widen its export basket by including items like automobiles and auto parts.
US Commerce Secretary Gary Locke has termed India’s Foreign Direct Investment rules as “complex and non-transparent” trade barriers. But he has added that the vast Indian market holds immense potential for the US exporters. The Indo- US bilateral trade has risen to $ 36,509.17 million in 2009-10 from $ 26,807.80 million in 2005-06.
On our part, India’s $ 50-billion worth IT and ITes industry, drawing 60 per cent of its overseas revenue from US companies has been wary of US protectionist measures, including augmented visa fees for Indian IT professionals and the ban imposed on IT outsourcing by Ohio state authorities. Post Obama visit, the industry expects a liberal policy approach from the US authorities. Prime Minister Manmohan Singh has added that, the Indian outsourcing industry has made the US companies competitive and productive.
Presently, ‘dual-use’ item related export controls affect one percent of the US-India trade, nevertheless, the ‘Entities list’ revision will widen the way for ‘high technology’ trade between the two countries, paving the way for business ventures with organisations like NASA and other US space agencies.
Obama has backed India’s permanent membership bid in the expanded UN Security Council and in the same breath has reminded India that, increased power brings in increased responsibility. It is ironical that, Obama has been pretty terse about India’s apparent soft stance against the Myanmerese junta, when the US leadership itself, has time and again supported dictatorship regimes worldwide, for their own gains. India is also expected to convince Iran to meet her nuclear obligations.
Australia, Britain and France have seconded Obama’s proposal for India's permanent membership in the UN Security Council. ‘Russian’ President Dmitry Medvedev reportedly also supports the move. India can now hope for a permanent membership in the expanded United Nations Security Council after its elected tenure there, ends on 31 December 2012. But the entire process will be “complex and lengthy".
Obama’s support for a permanent UN seat for India is a reflection of America’s realisation of the changed global equations, post the global financial meltdown; with China predicted to overcome the US in terms of GDP growth calculations by 2027, economic and political considerations have forced the US to seek a new ally in Asia’s latest economic growth engine, India.
Obama has played his political card well by declaring that terrorist ‘safe havens’ in Pakistan were unacceptable to the US, and has also called for action against the terrorists involved in the Mumbai attacks. India has received a pat on the back for supporting the Afghanistan regime with economic and developmental assistance.
Conclusion
The Indo-US joint deal can at best be described as a symbiotic relationship necessitated by the changing global power equations.The US stands to gain from India’s fast expanding market while India can leverage its US connection to establish its diplomatic power in the high seats of the international fora; the good thing is that both countries as ‘strategic partners’ are following a calibrated approach to the merger concept. |
