President Barack Obama may be coming to town for a ceremonial event but he will also hold substantial talks on all bilateral issues
New Delhi is all decked up to give a red carpet welcome to the American President, and this year’s Republic Day Chief Guest, Mr Barack Obama. This will be the first time, that an American President will grace the occasion. Mr Obama’s visit, the second in four years, has generated significant excitement in diplomatic, strategic and business circles. India and the US will like to deepen and broaden their partnership.
While it may be a ceremonial visit, Mr Obama will use the opportunity to discuss important bilateral issues. Indications of the American interest in India came when the US Secretary of State Kerry, Commerce Secretary Penny Pritzker, Defence Secretary Chuck Hagel and former Deputy Secretary of State William Burns all came to New Delhi within 100 days of Prime Minister Narendra Modi taking over and his US tour in September 2014. Mr Kerry had also participated in the Vibrant Gujarat Summit.
Many hawks in India view the visit with cautious optimism. In the past two years, the India-US relation had dipped after hitting a peak with nuclear deal. Americans have been upset that New Delhi has not doing enough on key issues like market access, civil nuclear cooperation, and climate change. India too has been disappointed on issues like transfer of technology and a liberalised visa regime. Even diplomatic relations soured after the Devyani Khobragade case.
But to the surprise of all, Mr Modi’s visit to the US was a great hit. later, Mr Modi invited Mr Obama for the Republic Day celebration. The latter even advanced his State of the Union address, so that he can come to India on time.
When the two leaders meet, what are the expectations on both sidesIJ Mr Kerry has identified four broad issues — climate change, defence, nuclear and economic. New Delhi would like American investment in the sectors of education, environment and towards smart cities. The US has already identified Ajmer, Allahabad and Visakhapatnam for the last project.
Topping the list, would be the economic ties. The Modi Government’s decision on the gross service tax, raise in foreign direct investment, ceiling in insurance, the amendment to the land acquisition law and changes in labour laws are a signal to the Americans. While the US would wait whether Mr Modi would deliver his assurances, New Delhi would watch whether the American business would invest in Mr Modi’s pet project of ‘Make in India.’ Although Mr Modi has shown his intention by promulgating eight ordinances to improve the business climate, they would become a reality only when Parliament approves them.
The second important issue on the table will be the civil nuclear energy. Despite the hype on the 2008 India-US nuclear deal, the stringent nuclear liability law passed by Parliament of India subsequently, has scared away both domestic and foreign suppliers of nuclear power plants. The Government is trying to overcome this by working on an insurance pooling plan that might indemnify the suppliers of nuclear components to resolve then logjam, which will be an important deliverable.
The third is climate change. Both the sides are expected to give a major push for renewable energy with the US, set to offer a grant to purchase energy efficient technologies. It can provide business opportunities of up to $40 billion as India wants to ramp up to 1,00,000 MW in the next five years.
The fourth is security and strategic issues. New Delhi wants updated defence technologies and not just buys equipment. The extension of the military cooperation, which was signed in 2005 for another 10 years, is also on the cards. The Pentagon has apparently given license approval for the co-production of two projects and even set aside $20 million for strategic cooperative science and technology projects with India. In November, the Indian Defence Ministry had cleared $2.5 billion deal to buy M777 guns from the US. Also under the Defence Technology Trade Initiative, the Pentagon has given a list of 17 proposals for joint development and production for New Delhi’s consideration.
There are also other important issues like Afghanistan, Pakistan and China but the important factor is that both sides are keen that the visit is more than photo ops and optics. Even if half of what is on the table could be resolved the visit would be considered as a success.