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Secretary of State John Kerry aptly put the state of relations between the world’s oldest and biggest democracies when he said “… people talk about the United States and India perhaps the way that a matchmaker talks about two friends that they want to get together. And you sort of have that, “Oh, you have so much in common. If only you’d spend more time together.”
Even if that joke generated laughter at the Sept. 30 State Department working lunch with India’s visiting Prime Minister Narendra Modi, it was based on the truth of how even the best of intentions are confounded in democracies. The audience included Vice President Joe Biden, top American and Indian bureaucrats who have the responsibility of taking the relationship “to new heights” and leaders of U.S. corporations wanting to believe the words promising change from a country that promised much but delivered little, at least twice in the past. The luncheon followed an already highly successful one-on-one Obama-Modi summit that morning.
Obama-Modi Chemistry?
On Sept. 29th and 30, Obama twice met with Modi — once at a working dinner and then in a one-on-one that went 45 minutes beyond the allotted time. In an unscheduled gesture that is being seen as sign of good chemistry between the two leaders, the President accompanied Modi to the Martin Luther King Memorial.
The Indian Prime Minister also took time out to meet lawmakers on Capitol, particularly House Speaker John Boehner and House Minority Leader Nancy Pelosi. The negatives, if any, barely registered under a “spectacularly well-orchestrated and executed visit,” as one analyst put it.
The New Mantra
A “Vision Statement for the Strategic Partnership” was released. The two leaders published a joint Op-ed in the Washington Post. And a commitment to the new mantra – “Chalein Saath Saath,” was declared. On more concrete footing, a slew of agreements were renewed and expanded — space exploration, trade including speedily resolving India’s opposition to the WTO Trade Facilitation Agreement, education, climate change, sanitation, clean energy, impediments to the nuclear cooperation deal, defense and anti-terror cooperation, and global security. India promised tourist visas on arrival and e-travel authorisation to U.S. citizens. The U.S. will reciprocate if India completes the formalities to join this country’s global entry program reserved for select countries.
New bilateral forums were established — the Indo-U.S. Investment Initiative, the Infrastructure Collaboration Platform, the U.S.-India Partnership for Climate Resilience, the U.S.-India Climate Fellowship Program, the Global Initiative for Academic Networks or GIAN.
Throughout the five-day visit, Modi’s main agenda was attracting U.S. business — meeting CEOs of Fortune 500 companies in Manhattan and then at the U.S.-India Business Council on Sept. 30th.
Obama and Modi in their Joint Statement outlined the objectives of increasing trade five-fold and cooperating on investment and infrastructure initiatives, and intellectual property issues. An Inter-Agency Working Group was established to address problem areas, especially the thorny liability law passed by Indian Parliament that is holding up U.S. investment in the nuclear energy sector.
“Under the leadership of the Modi government, India has the potential to be on a very different development trajectory and to shine once again as an investment destination,” said Ajay Banga, Mastercard CEO who heads USIBC. “The U.S. business community stands ready to help.” The USIBC announced it had identified upwards of $41 billion dollars slated for investment from a survey of just 20 percent of its membership. “Having worked with the Prime Minster since his days in Gujarat we are aware of the great things that he has accomplished and believe he has the capacity to add to those accomplishments in the coming years,.” USIBC’s Acting President Diane Farrell said.
Obama and Modi agreed to work through the Trade Policy Forum to promote a business environment attractive for companies to invest and manufacture in India and in the United States; they committed to establish an annual high-level Intellectual Property (IP) Working Group; they recognized in particular the contribution of the Indian and U.S. Information Technology (IT) industry and the IT-enabled service industry in trade and investment. American companies will be lead partners in developing Allahabad, Ajmer and Vishakhapatnam as Smart Cities. Also, the U.S. is going to help set up a new Indian Institute of Technology. The new Global Initiative for Academic Networks (GIAN) promises to invite 1000 teachers from 100 American institutions of higher learning to teach in India every year.
High Hopes
The excitement in the U.S. business community was reminiscent of the early 1990s when India’s liberalization program took off under then Finance Minister Manmohan Singh. Perhaps in the mind of those in the business, the dashing of overblown expectations then, and again after the 2005 civil nuclear cooperation deal, reverberate to this day. American businesses and government appeared to be willing to listen once again, but only because they have seen Modi’s modus operandi in Gujarat.
Rick Rossow, Wadhwani Chair at the Center for Strategic and International Studies in Washington, D.C., believes Modi succeeded with four target groups – the government, the diaspora, business and the American public. “He was clearly head and shoulders ahead of previous governments in terms of engaging business,” Rossow said. “While earlier governments worked through proxies, Modi had a no-holds-barred outreach.”
Who Will Deliver?
In their joint editorial in the Washington Post, Obama and Modi said “It is time to set a new agenda, one that realizes concrete benefits for our citizens.”
Delivering the goods is what U.S. business and government are looking for from New Delhi. Carnegie Endowment for International Peace Senior Associate Ashley Tellis who was invited to several Modi events in D.C. believes U.S. business is primed for India. “You could see the mood in the room – they wanted to give him the benefit of the doubt when he promised them a different India where life would be easier for them.” The big question remained whether Modi would move with alacrity on the domestic front. Former senior State Department official and expert on Hindu nationalism Walter Andersen trusts Modi’s ability to deliver. Not only had the “spectacularly well-orchestrated and executed visit” put Modi on a strong footing in America, Andersen said, the bilateral summit and the tone of the visit has sent a strong message to the bureaucracies that they have to move ahead. “In that field I trust Modi’s ability more than Obama’s.”