The Americans are ready to invest in India because it has a growing economy and they get a cost-effective access to the Asian market

The recent virtual meet with the US exemplifies that India does a great balancing act magically prioritizing billions of business sops to mighty powers and make the US announce that “energy imports from Russia are not banned and do not violate the US’ sanctions amid the war in Ukraine”. 

The US means business and profits. President Joe Biden and Prime Minister Narendra Modi’s virtual meet followed by the 2+2 summit stresses on a hefty $150 billion business agenda and expanding its deals on nuclear, space and cyber security. The energy import from Russia is a minor irritant as it is mere 2 per cent In comparison, India’s business offers huge profits worth $5.436 billion to US arms producers for sales worth several trillion dollars since 2001 largely from Indian subcontinent. The US is lured by the expanding new arms bazaar.

The US understands that even if its companies set up manufacturing units in India, as per its ‘make in India’ priority, they will repatriate huge profits and the 20 largest US arms manufacturers will continue to create employment at home. A country in economic crisis, particularly post-Afghanistan scenario, finds the Indian magic touch soothing even as European NATO allies remain cautious on the Ukraine war.

The gap between India and the US on the Ukraine issue was evident. The White House expansive preamble spoke of close consultations on the consequences of the brutal war. Prime Minister Modi was unequivocal on Bucha killings in Ukraine. The terse Indian preview outlines a broader agenda and exchange of views on developments in South Asia, Indo-Pacific region and global issues of mutual interest.

Both sides look forward to India’s co-hosting of the Indo-Pacific Armies Chiefs Conference (IPACC) and Indo-Pacific Armies Management Seminar (IPAMS) in 2023. In support of the Indian military’s expanding operational reach and emerging opportunities for cooperation in the Indian Ocean and the wider region, the ministers welcomed regular bilateral logistics operations.

India has separately entered into a nuclear deal with Westinghouse and other firms committing to invest $30 billion in nuclear, space and cyber security. They applauded the ongoing development of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite, planned for launch from India in 2023. The space ventures would have $ 5 billion or `38,000 crore investments.

Westinghouse is keen on setting up six nuclear power reactors worth `60,000 crore. It will also invest `10,000 crore for developing exportable mini-modular reactors. Under the South Asia Regional Energy Partnership, US AID and private American firms are to build Smart Grid Knowledge Centre for `3800 crore. The US would invest about `15,000 crore for the clean energy agenda.

The US International Development Finance Corporation (DFC) will invest $ 500 million in debt servicing for integrated solar photovoltaic plant in Tamil Nadu under Modi’s international solar alliance with annual capacity of 3.3 Gigawatts. Bill Gates’ Breakthrough Energy Ventures-backed 1366 Technologies plans to invest $300 million to set up a 2 Gigawatt solar wafer and cell manufacturing facility in India under production-linked incentive (PLI) scheme. The DFC will also invest $350 million for multiple projects in India in financial services, health infrastructure, renewable energy and food security. These businesses are projected to generate billions of dollars in profits to the US firms.

Virtually all US majors are making a beeline for India. The US aerospace company Lockheed Martin is open to setting up a maintenance, repair and overhaul facility in India for F-21 to sweeten its bid for 114 fighter aircraft for the Indian Air Force. Meanwhile, US-based Fisker Inc sets up its India headquarters in Hyderabad for electric vehicle manufacturing.

The summit is beneficial to the US. While it proposes to invest large sums in multiple projects and many of these very strategic as the US tries to capture the Asian market. It saves huge sums as India is cost-effective and provides easy access to the Asia market at low cost. The South Asia and Southeast Asian economies as per the US perspective have hefty foreign exchange reserves, stronger financial systems and unassailable place as the world’s manufacturing powerhouse. Their stock markets like those in the developed world have posted gains during the pandemic while other emerging regions lost.

This strategic interest makes the White House ignore India’s deals like oil and other purchases from Russia. The Indian soft push helps the US gain in monetary terms and India develops a manufacturing Asian export bazaar in a span of over a decade.

(The writer is a senior journalist. The views expressed are personal.)