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Obama’s India Visit: Opportunities & Challenges

President Obama’s visit to India marks a crucial event, with hope of instilling a sense of dynamism in India-US relations. Interestingly, Barack Obama would be the first serving American President to ever attend India’s Republic Day celebrations and also the first to visit India twice. Beyond the high symbolism that dominates the visit, there are some significant aspects that demand one’s attention.

Changed Foreign Policy Outlook

The event highlights some noteworthy features regarding India’s foreign policy outlook. New Delhi’s invitation for the Republic Day to President Obama signals an interesting change. New Delhi has for long invited guests for Republic Day from countries that invite minimal controversy at home or abroad; and also share close strategic partnership with India.

Going by the fluctuating trajectory of India-US relations in general, an invitation to Barack Obama is not only courageous but also signals a strong desire by both parties to strengthen the partnership. The previous Governments practiced a degree of reluctance wherein the Government preferred not to give undue attention to the India-US ties as it wanted to avoid antagonising China. The current candor to acknowledge a fortifying India-US partnership through this event showcases India’s newly-practiced-boldness to take steps that perhaps may not appease China.

The summit will focus not just on bilateral and economic ties but also issues of regional and global concern. As the Indian Prime Minister Narendra Modi and US President Obama get more opportunities to interact meaningfully, the level of engagement will point towards a more fruitful association. Predictably, the summit presents a set of opportunities in many sectors, which need to be tapped into as well as some challenges that need to be addressed.

Economic Ties

An area of great attention will be economic cooperation, which is high of list for both the parties. This became evident with the US Secretary of State John Kerry’s participation in the Vibrant Gujarat Summit. During the visit, the two sides will discuss ways in which US can participate in Modi’s domestic economic plan and ‘Make in India’ initiative. The two are expected to finalise a deal on US’ involvement in building three smart cities in Vishakhapatnam, Allahabad and Ajmer and boost US’ role in India’s infrastructure domain.

However, the challenge Modi faces is to innovate solutions to alleviate American concerns about limited access to the market, difficulty in doing business in India, Intellectual Property Rights and taxation policies. These concerns are only likely to be addressed by implementing Modi’s pledge of making India an easier place to do business through single-window clearances at State and national level, easier taxation policies etc. Similarly, well-known Indian concerns regarding access to high-technology products, immigration, barriers to temporary workflows etc. need to be tackled by the American counterparts. It would be too optimistic to expect a shift overnight. However, the summit could offer a forum for greater deliberations and continued discussions on the aspect.

Renewable Energy and Climate Change

India-US talks on renewable energy and climate change continue from Modi’s recent visit to the US last year. The two can use the period to further discuss and actualise some deals related to renewable energy cooperation in terms of private sector and technology for greater use of clean energy.

As the United States look for political support before the upcoming Paris climate conference, Washington may be eyeing a major joint statement on climate talks. While this may be an area of some positivity during the visit, attaining an Indian consensus on climate change would be a major challenge. A dampener may be India’s reluctance to agree to a timeline for capping emissions, something that is possibly a high priority for Washington.

Defence Ties and Joint-Development

Enhancement of defence ties with a focus on joint-development is likely to be high on the agenda. India-US joint development has indeed become progressive when compared to the earlier era but continues to be marred by periodic stumbling blocks and strategic dilemma. There has been a conscious attempt to shift from a ‘buyer-seller’ equation to that of ‘co-producers’. For example, the deals between Tata Advanced Systems Limited (TASL) and Sikorsky for producing spare parts for transport aircrafts; and TASL and Lockheed Martin Aero Frame Corporation joint venture for designing, developing and manufacturing aerospace and aero-structure products, are case in point. But to realise the complete potential, both India and US would have to undertake structural and export control reforms respectively.

Undeniably, there is a degree of pessimism that needs to be addressed over the long-term, but the efforts need to be started without wasting time. On one hand, India is skeptical about US’ reliability as a supplier due to its chequered track record, and remains reluctant to sign restrictive agreements such as CISMOA, BECA and LSA, which obviate the possibility of complete Transfer of Technology (TOT) from Washington. On the other hand, the US is weary of getting embroiled with the Indian bureaucracy style of functioning with numerous MoUs, middlemen and red-tape. This summit presents a forum for the heads of both countries to look into ways of ironing out these operational differences.

Strategic Understanding

New Delhi and Washington remain partners with converging as well as strategic interests. India’s strategic relevance in the US has heightened due to the role New Delhi can play in US’ pivot to Asia coupled with their mutual need to manage China’s rise. The two also share concerns about the issue of terrorism although their approaches on dealing with it may differ slightly.

While the two State heads would use the visit as an opportunity to discuss issues and their viewpoints on various regional and global events, certain disagreements may plague any major breakthrough. India’s invitation to Russian President Putin while the US and European Union (EU) imposed sanctions has been a cause of concern for the Americans. Other foggy areas that reduce any chances of success include India’s viewpoint on Iran, Pakistan and withdrawal from Afghanistan that differentiate from the US.

On the nuclear front, nuclear liability bill will act as a nemesis for Washington and New Delhi. To assuage American concerns on the bill, India has offered to set up an insurance pool to indemnify concerned firms. There is likely to be some progress but as also cautioned by Kerry, one cannot repose a great deal of optimism on this front. It is expected that the two will reassert the significance of India-US strategic partnership with some movement on regional issues, but no major advances.

The Way Forward

The India-US equation has largely remained plateaued, which may not always be negative. Although it does not signify great progress, it is indicative of a mature relation that is not susceptible to major setbacks. At this juncture, President Obama’s visit to India and the mutual eagerness to infuse more rigour into the relationship bodes well for both.

Source: Niti Central, January 23, 2015, http://www.niticentral.com/2015/01/23/obamas-india-visit-opportunities-challenges-297993.html

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