Does Obama mean business with India?

President Barack Obama’s upcoming visit to India needs a “transformational” moment, a clincher that will encapsulate both the growing bilateral relations and their future potential.

With the U.S. economy in doldrums and a tough mid-term election looming in November, Obama’s rock star status is blurred at home. A good foreign visit, which restores some lustre and confidence can be helpful. India can generate the warmth if the U.S. agrees to support its bid for a permanent seat in the UN Security Council, a decision that would pitch Washington against Islamabad and Beijing. Expansion of the Security Council, although of deep significance to New Delhi, draws yawns in Washington. The issue is not seen as urgent or worthy enough to expend political capital, especially when it is in short supply.

Foreign Secretary Nirupama Rao was in Washington last week to discuss Obama’s visit and work out the “deliverables” – diplomatic-speak for agreements and announcements to highlight the visit. So far the effort seems focused more on removing the hurdles, than creating a new framework.

After an uneasy start when the Obama Administration was perceived as unmindful of India’s concerns in South Asia, giving Pakistan and China primacy, it has moved closer to New Delhi’s view on regional issues. Time and reality intervened to help the Obama team understand that they should build on the solid foundation left by the Bush Administration, not fracture it by trying to accommodate a newly assertive China and a perpetually difficult Pakistan. There is more convergence than before but not enough to dub the current state as transformational to use Secretary of State Hillary Clinton’s description.

Obama’s first state guest last November was Prime Minister Manmohan Singh, a decision that went far to allay doubts in Delhi even though the state dinner is remembered more for the infamous gatecrashers than for any special warmth between the two leaders. Similarly, Obama’s decision to visit India in his first term is being seen as significant.

Bill Clinton went to India in 2000, the first U.S. president to visit after a gap of 22 years but it was the dying days of his presidency with no time left to make gains. The visit was more to heal the rift caused by India’s nuclear tests in 1998, which the Clinton folks saw as a breach of trust. Over the two years, they isolated and punished India with tough sanctions, the remnants of which survive to this day. Obama has the opportunity to close the chapter on Pokhran.

George Bush, who was hated by the world but loved by India, too went in his second term but after systematically propelling Indo-U.S. relations to a higher plane. He delivered a game-changer with the civil nuclear agreement, a deal which acknowledged India’s special status outside the exclusive nuclear club and opened doors closed for three decades. He overcame objections first from his own bureaucracy and then from an array of countries none of which wanted India to break free from the arcane and discriminatory international nuclear order. No wonder Manmohan Singh was moved to declare that the people of India “deeply love” Bush.

Obama wants to leave his own signature on the relationship but so far officials on both sides are struggling only to contain the negatives. India is upset about the recent hike in H1-B visa fees (now at $4,500 a piece), which targets four major Indian companies. The decision by Ohio to ban outsourcing altogether shows the fear and protectionist sentiment bubbling up. Obama himself has raised the pitch, denying tax benefits to companies that create jobs overseas. An old irritant for India is the listing of its two major public sector companies – the Defence Research and Development Organisation and Indian Space Research Organisation – on the U.S. “entities list” which prevents them from getting dual-use technology. They were put on the list as part of the 1998 sanctions.

The contradiction in India and the United States being strategic partners on the one hand and premier Indian government institutions being penalized on the other can’t be lost on U.S. officials. But neither the Bush team nor the Obama administration has found the will to remove ISRO and DRDO from the black list. The entities list has become a bargaining lever for Washington, the endless policy reviews and repeated promises to act notwithstanding.

If Washington can be obdurate, New Delhi can be opaque. For years New Delhi has been dragging its feet on three logistics agreements that Washington wants signed to ease interaction or inter-operability between the two militaries and help the sale of high-tech electronic equipment. They are: Logistics Support Agreement (to give access to each other’s military facilities), the End-User Monitoring Agreement (to protect U.S. technology) and the Communications Interoperability and Security Memorandum of Agreement or CISMOA (to provide U.S. communications systems for military aircraft bought by India).

Indian position is to take every situation where the two defence forces have to interact on a case-by-case basis be it joint exercises or disaster relief operations and sign short term agreements. This makes little sense to the Pentagon, which has signed these with 60 other countries with little or no difficulty. Some Indian officials say India does not need CISMOA because it is not seeking U.S. communications equipment.

Washington is also upset about the Nuclear Liability law passed by the parliament in August, which puts some responsibility on the supplier in case of a nuclear accident. Even though the bar is set high – to prove the supplier intentionally caused the accident – U.S. companies and officials are unhappy. They have been putting pressure on India to negate the provision by other means, either by an executive order or with a government-to-government agreement, which indemnifies the supplier. Indian officials are keen to work out a via media that stops short of an amendment to the law.

Once the wrinkles are ironed out, new possibilities can open. If ISRO and DRDO are removed from the “entities list,” India and the U.S. can embark on more commercial ventures in space, such as mapping monsoons and crops. Ideas on e-learning and e-health can take off. An announcement on a major space project could arguably make the visit “transformational.”

Apart from the bilateral, there are regional issues, which concern India and the U.S. – the two most important being a newly assertive China and the future of Afghanistan. The days of G-2, a construct from the early Obama days which envisioned China and the U.S. working together on key issues to the exclusion of other powers, are over if recent events are anything to go by. The Obama Administration has had a dose of reality. In recent months Washington has faced harassment of its ships by Chinese vessels, new declaration of sovereignty by China over South China Sea as a “core interest” even though four other countries claim parts of it, and vehement Chinese objections over the arrival of USS Washington in the Yellow Sea for U.S.-South Korean military exercises.

Washington has decided to push back. Clinton marked a new turn in July when she declared that a peaceful resolution of claims over South China Sea was a U.S. “national interest,” a statement designed to send a message to Beijing, which wants to settle the claims bilaterally with Vietnam, Malaysia, the Philippines and Brunei. Washington is concerned that China’s new projection of power could disrupt maritime trade but China seems determined to challenge U.S. primacy in its backyard.

There is marked change in U.S. perception of China, which in turn introduces a new dimension in Indo-U.S. relations. It is a more sober and careful reassessment compared to the Bush team, which saw India as a clear counterweight to China in Asia and wanted to help India achieve great power status. The presence of 11,000 Chinese troops in Pakistan’s Gilgit-Baltistan region has raised eyebrows both in New Delhi and Washington. Pakistan’s continuing double game in Afghanistan has made Washington more open to India’s security interests in the war-torn country. The Americans are beginning to understand that when push comes to shove, Pakistan will be in China’s camp despite billions of dollars in U.S. aid.

The Obama Administration has urged India to “stay, step-up and endure” in Afghanistan irrespective of Pakistani objections. The idea of reconciliation with the Taliban hasn’t gone anywhere and U.S. forces are likely stay in Afghanistan for the foreseeable future, a welcome development from India’s point of view. Obama could make a statement about India’s enhanced role in the region, thereby warming hearts and sending an indirect message to Beijing and Islamabad.

From this basket of bilateral and regional issues, officials must create the right ambience and craft an enduring message for America’s first African American president to leave his own mark on the relationship. Indo-U.S. relations are no doubt strong and growing but a presidential visit always offers an opportunity to focus the minds and get things done.

Seema Sirohi is a Washington-based journalist and analyst.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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