Towards ending the stalemate with US

http://www.tribuneindia.com/2014/20140921/edit.htm#1

At the outset, Modi may wish to reassure the US business community that he is not inattentive to their concerns. Now that he is firmly in the saddle he can signal that he will start to tackle economic reform.

Sumit Ganguly

SINCE President Obama’s mostly successful visit to India in 2010 the Indo-US relationship appears to have stalled. In India the disappointment stems mostly from a perceived lack of interest on the part of the Obama administration in addressing a series of Indian concerns about Pakistan and Afghanistan (especially as the US and International Security Assistance Force drawdown nears) and an apparent lack of willingness to focus on new and bold bilateral initiatives.

In the US, a pervasive sense of disappointment and even a degree of ennui has set in with India. The disappointment stems from a host of Indian decisions and choices. The nuclear liability Bill that the Indian Parliament passed made it all but impossible for US firms to invest in the Indian market. India chose to give the multi-billion dollar Medium Multi-Role Combat Aircraft to France despite intense American lobbying. Worse still, a series of economic reforms remained on the anvil but with little willingness to act on them.

With Prime Minister Modi’s visit to the United States there is a distinct possibility for pushing for a course correction. Obviously, a single visit cannot swiftly take the relationship out of the doldrums. However, it is possible to put some wind in its sails if both sides take cognisance of its significance.

Modi may have already made an initial nod to US concerns even as he refused to address the question of agricultural subsidies under the aegis of the World Trade Organisation. This gesture involved the dramatic expansion of India’s capacity to deal with questions and issues surrounding intellectual property. This was a non-trivial matter as a range of US and other foreign firms had expressed grave misgivings about India’s intellectual property regime.

What might Modi now address while in the US and what issues might he press his American interlocutors on while in the country? At the outset, he may wish to reassure the US and particularly its vast business community that he is not inattentive or oblivious to their concerns. His initial budget, passed weeks after his assumption of office, may not have provided them much hope or comfort. However, now that he is firmly in the saddle he can signal that he will start, in short order, to tackle long-neglected matters of economic reform. For example, to demonstrate his seriousness about reform he could offer some prospect of overturning the fraught and problematic legislation that allows retroactive taxation.

In another arena he might express some clear interest in working with the US to co-develop new defence technologies. For years, if not decades, India has sought joint production arrangements with the US in the realm of military technology only to be rebuffed or offered capabilities that it did not especially seek. However, the US has now evinced an interest in the co-production of a new anti-tank missile. Should Modi step up to the plate this project could become the platform for expanding the scope of defence cooperation.

Yet it would be unreasonable for Prime Minister Modi alone to make a series of unilateral gestures. The US, too, should address a number of Indian concerns ranging from commercial issues to those of regional security. One subject that has dogged Indo-US relations in the recent past has been the level of access of Indian professionals, especially in the information technology sector, to the American market. Though a contentious issue in American politics and especially with elements of his support base, President Obama could demonstrate some leadership in this arena. He may even be able to elicit some cooperation from his recalcitrant political opposition on this otherwise vexed question. Some willingness on his part to address this issue would do much to improve the current tenor of Indo-US relations.

Beyond this commercial concern there is a vital strategic issue that is looming on the horizon in South Asia. This involves the pace and scope of the US military drawdown in Afghanistan. As the inevitable draws closer it is evident that the Taliban is becoming bolder and more willing to behave in increasingly aggressive ways. There is little or no question that their supporters across the border in Pakistan have granted them sufficient rein to step up their activities. President Obama is understandably preoccupied with a host of other crises ranging from Central Europe to the Middle East to West Africa. Nevertheless, he can ill afford to neglect another potential disaster that could result in the event of a precipitate US departure from Afghanistan. Until the recent past, thanks to Pakistani objections, the US had sought to limit India’s role in Afghanistan. However, today it may well wish to reconsider such a policy especially as Pakistan seems to be caught in a vortex that threatens public order and regime stability.

This brief discussion, obviously, is not a complete checklist of issues that confront Indo-US ties. They nevertheless constitute a useful starting point for placing the relationship on a more secure footing.

Sumit Ganguly holds the Rabindranath Tagore Chair in Indian Cultures and Civilisations at Indiana University, Bloomington.