What India and the US achieved in 3 days.
By Rajiv Theodore
NEW DELHI: Some say that the visit by the President of the United States, Barack Obama, to India, has been over-hyped. That each and every move of his has been over-reported. In other words, Obama had the local media gushing and so did the millions of its readers and viewers glued to the news that the journalists had to offer.
On the reverse, when an Indian dignitary visits the US, the mainline media over there gives the reportage a routine status with some photo-ops and a not so significant coverage. Some even go further to analyze the internal psyche of the Indian middle-class, the dominant section of the population who are so very much US–centric, that at any given time a family member from them would be proud to show-off some US connection in the form of a relative in the North American continent.
On top of it, there is this constant aspiration of being there, in the US if not physically at least emotionally and psychologically, which manifests in the form of clothes, the movies, the food and generally faking the American way of life, just for the heck of it. So when President Obama comes calling, everyone, who is even remotely interested in the US of A, gets aroused.
To a certain extent, the analysis is true. The truth is, however, far from this — the exigencies of the geo-political and economic world, the practical world of real politiks, which is of key importance here for the visit. Both India and the US do realize the importance of each other’s existence. One can’t but ignore the fact that the US considers India as a market for its products, be it energy or defence but also as a buffer in Asia against the ever growing might of China.
Modi on his part has been swift to see this point and has ironed out certain issues to make the Indian economy more investment friendly and had been very tactful in dealing with China. This importance cannot be just brushed aside or attributed a marginal position. It would be preposterous to do so or even think so given the current global situation, be it in economy or global strategic affairs. India needs a country like the US on its side, being boxed in by neighbors Pakistan and China, and facing an omnipresent threat from the Kashmiri separatists, which invariably makes the sub-continent one of the most dangerous regions in the world to be in.
However, three event filled days went by. The CEOs roundtable, the Republic Day Parade and the Townhall address by Obama, followed by the ‘Man ki Baat’ radio show where the two leaders spoke of their humble origins and all that.
Obama in his second visit to India – which is a first in the history of India’s diplomacy – packed quite an itinerary before he left for Saudi Arabia this afternoon. On Prime Minister Narendra Modi’s part, his magic was unleashed as usual. It makes the Indian a truly remarkable man at a global level, maybe pitchforking him into that rarefied realm of a statesman par excellence.
It was only some time back that Modi was declared persona non grata in the US. The body language between the two glowed of bonhomie and that of long lost buddies. The two bonded over their humble beginnings on a radio show aired on Tuesday, just after the American leader ended his New Delhi visit. Obama took questions from listeners.
“I think both of us have been blessed with extraordinary opportunity, coming from relatively humble beginnings,” Obama said in answer to a question.
“When I think about what’s best in America and what’s best in India, the notion that a tea seller or somebody who is born to a single mother, like me, could end up leading our countries is an extraordinary example of the opportunities that exist within our countries,” he said.
Modi too pitched in saying that he had never imagined being the Prime Minister of India “because, as Barack said, I came from a very humble background”.
Then there is the element of theatrics too. Obama had advanced his state of the union address to be in New Delhi. Modi shed protocol to step into the airport tarmac to receive the US president, with a warm hug. These theatrics did have its role too—it breathed fresh life into nearly dead talks. Although a lot needs to be done, Obama’s visit is a continuity –a work in progress and that the two countries relationship is synonymous with serious business at all levels.
Now a closer look at the initiatives that the two heads of states have taken:
CIVIL NUCLEAR DEAL
Ending years of logjam (six years) Obama and Modi announced a breakthrough in the nuclear deal, on Sunday. Till then the inability to move ahead on this had been a bone of contention between the two nations. This would now open the door for U.S. companies to build nuclear reactors in India. There would be now an insurance cover to U.S. in case of an accident. Companies such as GE and Toshiba-owned Westinghouse, who had stayed away are relieved, but would be reading the fine print before talking an investment decision. In 2008 the two countries signed a landmark deal giving India access to civilian nuclear technology, but it has been held up by US concerns over India’s strict laws on liability in the event of a nuclear accident. Initial reports here says without going into details India will set up an insurance pool — led by General Insurance Co. and four other insurance companies for a total amount of Rs. 750 crore — to indemnify companies that build reactors in the country against liabilities in case of a nuclear accident.
The remaining Rs. 750 crore of the total Rs 1,500 crore to offset liabilities will be provided by the government of India. This will address the US concerns over India’s strict laws on liability in the event of a nuclear accident.
STRATEGIC AFFAIRS/DEFENCE
To hazard a repeat India’s unique geo-political position has the potential to counterbalance China, making India an increasingly important element of U.S. military and commercial strategy. The two leaders reiterated a September statement affirming “the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea,” an apparent reference to China, which is asserting territorial claims in the region.
The United States overtook Russia as the biggest weapons supplier to India and the two countries had finalized a defence framework pact for 10 years. The deals included joint production of Raven drones and systems for Lockheed’s C-130 transport planes. The two countries will also explore jointly developing jet engine technology.
These and more were renewed for another 10 years on Sunday. The nations decided to usher in joint manufacturing of four military products and explore the development of two more high-end technologies.
The four products are the next-generation Raven unmanned aerial vehicles (UAVs), “roll-on, roll-off” intelligence-gathering and reconnaissance modules for C-130J Super Hercules aircraft, mobile electric hybrid power sources and “uniform integrated protection ensemble increment-2 (chemical, biological warfare protection gear for soldiers)”. The Raven is a hand-launched mini drones used by soldiers in the battlefield to keep tabs on enemy formations within a range of 10km. The two sides, however, plan to extend its range to 18km and flying endurance to six hours from the existing four hours. Similarly, the 12 C-130Js acquired by India from the US for over $2 billion since 2007 did not have the requisite surveillance modules that they will now get.
CLEAN ENERGY
A total of $4 billion has been committed by the US, for projects and equipment sourcing.
This also opened up a whole new source of financing for social development ventures in the country through a new Indian Diaspora Investment Initiative.
Out of the $4-billion, $2 billion would include ‘’leveraged financing’’ for renewable energy investments in India through the US Trade & Development Agency and $1 billion in loans for small and medium businesses across India through the Overseas Private Investment Corporation, or OPIC. Additionally, the US Export Import Bank would finance a billion dollars to support ‘Made in America’ exports to India over the next two years. Two US trade missions will be in India later this year with a specific focus on infrastructure development in rail, roads, ports and airports.
SMART CITIES
The United States Trade and Development Agency (USTDA) signed Memorandums of Understandings (MoUs) with Uttar Pradesh, Rajasthan and Andhra Pradesh for cooperation to support the development of three smart cities. The cities are Allahabad, Ajmer and Visakhapatnam.
IPR & PIRACY
Issues related with intellectual property rights, including piracy of films and software, figured prominently during the India-US CEO Forum in New Delhi attended by the two leaders.
BILATERAL INVESTMENT TREATY (BIT)
to provide comfort to American companies that they will not be treated unfairly, and from India in the belief that it will help increase foreign investment inflows into India, the BIT has been much sought after but will take time and effort.
(Rajiv Theodore is India Bureau Chief, The American Bazaar)