6 minute readObama in India: No big deal

India is going to be disappointed with President Barack Obama’s visit beginning Saturday after next. The upside of this is that the Indo-US relationship has come a long way in so short a time as to engender expectations that could induce performance anxiety.

This sense of anticlimax comes after the much tom-tommed civilian nuclear commerce double play by the two countries, which continue to relay over multiple hurdles. US Under Secretary of State for Political Affairs William Burns said at a White House press briefing on the visit on Wednesday, “We’ve worked hard in this administration to follow through, completing, for example, a reprocessing agreement between the US and India six months ahead of schedule.” He also marked the Indian accession to the Convention on Supplementary Compensation on Wednesday, important especially after the Nuclear Liability Bill passed in India, imposing liabilities on nuclear suppliers as well. “We look forward to US companies contributing to Indian civil nuclear development. And the signing today by the Indian government in Vienna of the Convention on Supplemental Compensation (CSC) is a very positive step toward ensuring that international standards apply and that US companies are going to have a level playing field on which to compete.”

But evidently, the accession to the CSC has not solved the problem. When asked if Obama would ask for changes in the recently passed nuclear power law, Burns said, “What we seek is a level playing field for our companies. India’s leadership has said that’s what it wants to ensure, too, and so I think we’re making progress.”

When asked specifically if India had addressed all US concerns in this regard by signing the CSC, he repeated, “Our companies are engaged in discussions right now. We’re engaged in discussions,” adding, “What we’re interested in is simply to ensure that there’s a level playing field for our companies.” So no, then.

But India thinks these are issues that will, eventually, be sorted out. “So what’s next?” is what it’s asking now.

New Delhi has been hoping for tangible movement towards it being able to register a permanent presence on the United Nations Security Council (UNSC), for which support has been forthcoming from various countries. But it is US intent and initiative which will drive the Indian quest to fruition. Indeed, if the agreement to facilitate civilian nuclear commerce between India and the rest of the world was the high point of Indo-US relations under the previous US dispensation, India hoped a permanent Indian seat on the UNSC would mark the growth of this relationship under President Obama.

The first indications of a letdown in this regard came from US officials in New Delhi, who expressed ignorance of the agenda earlier this week, when asked if President Obama would be addressing this issue. At the White House press briefing on the visit, US Deputy National Security Adviser for Strategic Communication, Ben Rhodes obfuscated, “The first thing I’d say is simply that — first of all, we’ve, through the G20, through our focus on the G20 and some other bodies, already sought to give India a greater voice in global architecture — for instance, saying that the G8 can’t deal with global economic issues as effectively as the G20. The reasoning behind that was because you need India at the table on those discussions, just as you need China and other emerging economies.

Referring to India’s recent election as non-permanent member to the UNSC, he added superficially, “On the Security Council, they are going to be a member, first of all, in terms of the next cycle, so we’ll have an immediate opportunity to cooperate with them on the Security Council.” And so India feels shortchanged. US Deputy National Security Adviser for International Economic Affairs, Mike Froman said, “India is today one of the biggest contributors to UN peacekeeping forces.”

Under Secretary Burns weighed in too, saying, “Given India’s rise and its significance, we believe that India will be a central part of any consideration of a reformed Security Council.”

Asked, “Can you just maybe explain a little more about why not just do it? What is the thinking behind not moving ahead quickly with this?” he said, “That’s about as far as I’m going today.”

When pressed further with a question from a reporter, who asked, “There is a downside, though, in your view? You just don’t want to articulate what it is?” the most he said was, “It’s a very complicated issue that involves international architecture in many countries. But we’ll continue to work — to talk this through as we move forward on the trip.”

After talking to US government officials at their embassy in New Delhi and having a look at the transcript of the White House press briefing on the visit, what seems apparent is that the only area that’s swimming along fine between the two countries is defense cooperation, even in spite of the once-explosive end use monitoring issue, now, apparently, a mere blip in the relationship.

Froman underlined this at the press gaggle, saying, “India now holds more defense exercises every year with the United States than it does with any other country. Some USD 4 billion in defense sales have been made by the US to India over the last couple of years alone, with more possibilities ahead. ”

More possibilities indeed. India has already ordered 24 Harpoon anti-ship missiles, eight P-8I maritime aircraft, six C-130J Super Hercules aircraft. Four additional P-8I aircraft will be ordered. The Javelin anti-tank missile also seems to be a likely purchase, besides 10 C-17 Globemaster III aircraft and, possibly, an additional six C-130J aircraft.

The Indian Army is currently test-firing the M777 Ultra Light Howitzer for the planned Indian acquisition of 145 light howitzers. And of course, two US fighter aircraft, the F-16 and F/A-18 are in the race to win the Indian Air Force (IAF) order for 126 Medium Multi Role Combat Aircraft (MMRCA).

The AH-64D Apache attack helicopter and the Chinook heavy lift helicopter are also on offer to the IAF, having already undergone trials, besides two versions of the Seahawk helicopter to the Indian Navy.

The transcript of the press briefing has this question addressed to Froman. “There are reports that there are USD 12 billion worth of orders are being (inaudible) for the US This includes USD 5 billion for the defense and another USD 7 billion of commercial deals like the Boeing aircraft, which will create 50,000 to 60,000 jobs in the U.S. alone. How do you think it is justified to level allegations like jobs are being outsourced to India?”

“I think the important thing is that there’s a large potential market there; that the President and the administration are active in promoting exports to ensure that there’s a level playing field there, there’s open markets there, and that our exports have an opportunity to penetrate that market and support jobs back here,” he replied.

But he did point out separately, “Indian companies are the second-fastest-growing investors in the United States. And they are creating — they now support about 57,000 jobs here in the US.” The balance of trade between the two countries is fairly even and touching around USD 50 billion, according to a US embassy official. And interestingly enough, the fastest growing investors into the US don’t come from China, the European Union or Japan. “I believe it’s UAE — in terms of fastest-growing in the United States, I believe it’s UAE,” said Froman.

So what do you think?