The financial package announced by Barack Obama can change the dynamics of world energy and end the charm of nuclear energy, which is neither cheap nor clean. It may also even clean up Indian politics
The Republic Day parade with Mr Barack Obama as the chief guest became a global event. It is rare that an event or a visit to India draws such attention by the Western media. Prime Minister Narendra Modi and US President Barack Obama have made it to the headlines all over. It promises a change, not just to the two countries, but also to the recession-hit world.
Possibly the only other visit that had drawn such mileage was the visit by the Soviet Prime Minister Alexei Kosygin in 1968 for the Republic Day parade. It was three years before the historic 25-year treaty with the Soviet Union and the war for liberation of Bangladesh in 1971. Kosygin’s visit was a media event in the US and Europe, as it came shortly after the 1965 India-Pakistan war that saw the triumph of the Soviet system owned by India over state-of-the-art US Patton tanks’ deployed by Pakistan.
Other supposed significant Republic Day visits were made by Queen Elizabeth II in 1963, UK Prime Minister John Major in 1993, South African President Nelson Mandela in 1995, Russian President Vladimir Putin 2007. Japanese Prime Minister Shinzo Abe’s visit had caused some ripples but mostly in localised terms. Mr Putin’s visit certainly reminds one of the visit by Kosygin but it did not raise waves that Kosygin visit had caused.
Kosygin’s visit changed the geo-political situation. Will Mr Obama’s visit too change the course of the worldIJ The US and the UK media expect a lot. India might change the fortunes of the US energy and nuclear industry, create jobs and even bring good luck to the sinking UK economy, the Western media fervently hopes.
That is the apparent change that Prime Minister Narendra Modi has brought. The mighty (yes, it remains so till now) US and the struggling UK have started to view India as being almost equal. They feel a rising India as insurance for their progress despite significant difference in the level of wealth they possess through control of the global system.
They are hopeful, that the four-billion dollar investment promised by Mr Obama to pep-up solar, nuclear, defence and allied industries, will generate more jobs in the US. Their major gain is seen to be in ‘Make in India’, the equipment to generate one gigawatt (one lakh megawatt) solar power and almost 60,000 MW of wind power.
The financial package announced by Mr Obama comprised two-billion dollar US Trade and Development Agency commitment for renewable projects in India. If it succeeds, it may change the dynamics of world energy. No country, not even China with its initial success, has set such an ambitious solar power target in a short period of about five years. This could also end the charm of nuclear energy, which is neither cheap nor clean. It may clean up Indian politics, as not much muck can be raked up on liabilities.
The present promise of Rs1,500 crore in insurance liabilities in the case of an accident, are to be borne by the public sector insurers. They would be re-insuring with global insurers. The premium payment itself is a big business. If solar power succeeds, the thawing of nuclear power projects is a great possibility.
While fears always remain in global politics and trade, it is also a fact that, over the past three years, between 2011 and 2014, the US surpassed Russia as the largest supplier of military equipment to India. It is possibly an indicator that both sides are overcoming their mutual suspicions. Mr Obama banks heavily on India to create jobs by setting a target of rise in trade from the $100 billion ($96 billion in reality) to $500 billion.
But does he want to reduce his ties with China, with which even today it has $560 billion tradeIJ Maybe. It creates more jobs in China. Mr Obama wants a shift in that paradigm. Some benefit that has come to India is seen in the country’s engineering industry that is hoping to double its exports to the US to $15 billion in the next three years, says the Engineering Export Promotion Council.
It has risen by 30 per cent, to $5.8 billion in 2014-15, over $ 4.45 billion a year ago. But the US industry is concerned about intellectual property rights issues in India, its core sector and infrastructure growth and the retrospective taxation uncertainties. Mr Modi has tried to dispel these by saying, “We will guide you and walk with you in projects. You will find a climate that encourages investment and rewards enterprise.
It will nurture innovation and protect your intellectual property. It will make easy to do business.” India is opening up its doors. But the US is still not that open. Despite the Obama sops, it is not a total free entry for Indian goods to the US. The US industries, during interactions ,were vocal about barriers in India. But the US Government has not promised to dismantle its own walls.