Bonhomie and after

| Updated on January 20, 2018 Published on June 09, 2016

India-US embrace goes beyond political and strategic interests to solid economic and business reasons

If there were any doubts whatsoever on India’s decisive ‘pivot’ towards the US, the takeaways from Prime Minister Narendra Modi’s just-concluded visit, including the associated optics, should put them to rest. Modi’s address to a joint session of Congress on Wednesday — only the fifth by an Indian Prime Minister — will be long remembered for his description of India-US relations as having “overcome the hesitations of history”. That one line summed up the transformation in relations between two democracies aspiring to be the twin engines of global growth. Importantly, the embrace is not just about a convergence of political and strategic interests; underpinning it are solid economic and business reasons. Whether it is nuclear commerce or renewable energy, defence exports or cooperation on climate change, the India-US relationship has deepened in recent times, and for this credit must go in good measure to the BJP government for taking the baton from the UPA and running hard with it.

Modi’s hardsell of India and its promising high-growth economy — something that he has now become quite adept at in international fora — at a gathering of American business leaders won him promise of $45 billion investments in the next few years. His pitch of marrying American capital and innovation with India’s young human resource and entrepreneurship certainly struck a chord with Jeff Bezos, founder of e-commerce giant Amazon, who said that he saw an “unlimited India” when he peered into its future. Bezos backed this optimism with a $3-billion investment in India operations. And at long last, there is some forward movement on setting up nuclear power plants with Westinghouse Electric and NPCIL announcing that engineering and site design work for setting up six reactors will begin immediately. The question though is if it is too late: Nuclear power has fallen out of favour globally, in step with advances in environment-friendly renewable energy, especially solar power, which is now affordable too.

There have been gains from the visit on the strategic front as well, with India’s entry into the Missile Technology Control Regime a done deal and its bid for membership of the Nuclear Suppliers Group (NSG) getting US support; of course, India will still have to scale the Chinese wall on the NSG issue. While the optics surrounding the visit were no doubt upbeat, there are issues between the two countries that may yet turn out to be troublesome after a new president is sworn in, in the next few months. Differences over intellectual property protection, especially for pharma companies, the stiff visa fees for software professionals, and the social security fees payable by Indian IT companies, not to forget the solar power equipment sourcing dispute that India recently lost at the WTO, are all issues on which the two countries have not been able to find common ground. While the bonhomie between Modi and President Obama is good for now, the question of whether the momentum in relations will be sustained really depends on the next president of the US.

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Published on June 09, 2016
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