Kanwal Sibal
October 2 , 2015
The United States of America remains the world's foremost political, economic, technological and military power, even if, in relative terms, it is not as dominant globally as before. It is India's biggest economic and technological partner; we have numerous institutionalized dialogues, which point to the huge potential of the relationship. Of all Western countries, our people-to-people ties are the deepest - more than two million annual visits between their citizens, students, and entrepreneurs. Our military ties are expanding, and we are building strategic convergences with it in the Indian Ocean and Asia-Pacific regions.
On the less positive side, US policies remain problematic for us in many areas. It is still arming Pakistan; it is reluctant to impose sanctions on it for involvement in terrorism; it is willing to further Pakistan's strategic interests in Afghanistan by seeking Pakistan's assistance in the reconciliation process between the Taliban and the Afghan government; it is facilitating China's political expansion in our western neighbourhood by encouraging its involvement in Afghanistan, which, in turn, buttresses its strategic aggrandizement in our vicinity signified by the China-Pakistan Economic Corridor through territory that is legally ours. US policies in West Asia and towards Iran have not served our national interest.
Bilaterally, the US has complaints about our trade, investment and policies on intellectual property rights. Its pharmaceutical sector is especially aggrieved because of our patent policies. We want to push "Make in India", but American companies oppose decisions on preferential market access to locally established units for encouraging manufacturing in India. The sentiment against outsourcing, restrictions on movement of professionals, visa issues, the long pending totalization agreement are subjects of difficulty in our relations. We have rhetorical, but no real, convergence on climate-change issues, on which the US continues to pressure us. The US is also pushing for "high quality" trade agreements in the Asia-Pacific, going beyond World Trade Organization accords, that would leave us out, as in the case of the Asia-Pacific Economic Cooperation.
In this background, it is not surprising that the prime minister, Narendra Modi, would want to keep engaging the US so as to expand the area of shared interests and reduce differences. Building on the former and narrowing the latter will take time and effort. If the US does not find India an easy partner because of our political inhibitions and systemic deficiencies, we will find an impatient, lobby-driven US, which conflates a "level playing field" with the wish-list of its corporations, difficult as well.
To criticize Modi for wanting to galvanize our vitally important relationship with the US by his second visit there is quite misplaced. To dismiss the visit as all hype and hoopla meant to build Modi's personal image, with little achieved concretely, is being too partisan. If Modi's skilful handling of his foreign visits and his adulation by the diaspora strengthen him domestically, the Opposition may be discomfited, but that is no reason to deny national gains accruing from his popularity abroad. Modi is pursuing ambitious plans: Make in India, Skills India, Digital India, Clean India, Start-Up India, Smart Cities, infrastructure development, indigenous defence manufacturing, cleaner energy and so on. To further them, engaging the US at the political, corporate and diaspora levels is important. More so, as Modi has a positive and confident message to convey, that of opportunities that India offers. This message has become even more relevant after the slowdown of the Chinese economy.
Modi met American CEOs from the financial, manufacturing, infrastructure and media sectors, besides a dinner meeting with 42 CEOs from the Fortune 500 companies in New York. In the Silicon Valley, where 30 per cent of the start-ups are by those of Indian origin, his meetings with the Facebook, Google, Microsoft and Apple chiefs were unprecedented. At the very least, this conveyed the novel message of a modern-minded, tech-savvy, social-media-oriented Indian prime minister with all its intangible positives, apart from bolstering Modi's Digital India campaign, regarding which he received positive commitments in support of some of his initiatives.
Some point, not illegitimately, to the gap between what Modi seeks through lobbying abroad and insufficiently prepared ground conditions at home. We know that foreign investors, favourably impressed by Modi's promises, await delivery before making major commitments. Here, the government's difficulties with the land acquisition bill and the goods and services tax, the consequence of a lack of majority in the Rajya Sabha, would have sent signals of uncertainty to would-be investors. These would have needed countering and Modi's interactions in the US no doubt provided a good opportunity to address the question marks.
American and foreign investors are still looking for a predictable tax regime; concerns about retrospective application of our tax legislation have not been removed; on "ease of doing business" they are still looking for simplified procedures and less red tape; they want regulatory reform, quicker decision-making on tenders and faster infrastructure development. All these issues and expectations were flagged by them to Modi. If the Indian business leaders may be reluctant to convey their concerns to the prime minister forcefully, foreign business leaders would have no such inhibition. In any case, these are not issues that Modi is not aware of. He undoubtedly knows that if the gap between promise and delivery is not bridged quickly, his pitch will begin to lose credibility, with costs at home and abroad. The kind of interaction he is having serves the purpose of both listening to what the investors are looking for and keeping their attention focused on opportunities in India.
Even if the pace of change in India does not meet external (as well as internal) expectations, the answer does not necessarily lie in less activism by the prime minister abroad. It remains important to explain and assure, to emphasize the government's determination to move ahead in the direction it has charted. Of course, the demands of foreign investors in terms of ease of doing business in India are those of Indian investors too. If our investors begin to invest in India, foreign investors will follow. Ultimately, the principal action on the economic front lies at home.
Modi's US visit has supplemented the first India-US strategic and commercial dialogue held on September 22. The combining of the strategic and the economic suggests that even economic cooperation between the two sides is being seen as a strategic choice. In this new forum it was agreed to facilitate an innovation forum in 2016 in which the US and Indian entrepreneurs can cooperate. A joint work stream on ease of doing business was launched. Accelerating progress in infrastructure collaboration was emphasized. It was agreed that a US smart cities infrastructure business development mission will go to India in February, 2016, led by the deputy secretary of commerce. The US also affirmed its readiness to assist in India's ambitious goal of providing skills training to 400 million people over the next decade. An early signing of a new five-year memorandum of understanding on energy security, clean energy and climate change is envisaged. On defence and security cooperation, the important gain from the strategic and economic dialogue was the joint declaration on combating terrorism.
All in all, Modi's visit to the US can be seen as another milestone o
The United States of America remains the world's foremost political, economic, technological and military power, even if, in relative terms, it is not as dominant globally as before. It is India's biggest economic and technological partner; we have numerous institutionalized dialogues, which point to the huge potential of the relationship. Of all Western countries, our people-to-people ties are the deepest - more than two million annual visits between their citizens, students, and entrepreneurs. Our military ties are expanding, and we are building strategic convergences with it in the Indian Ocean and Asia-Pacific regions.
On the less positive side, US policies remain problematic for us in many areas. It is still arming Pakistan; it is reluctant to impose sanctions on it for involvement in terrorism; it is willing to further Pakistan's strategic interests in Afghanistan by seeking Pakistan's assistance in the reconciliation process between the Taliban and the Afghan government; it is facilitating China's political expansion in our western neighbourhood by encouraging its involvement in Afghanistan, which, in turn, buttresses its strategic aggrandizement in our vicinity signified by the China-Pakistan Economic Corridor through territory that is legally ours. US policies in West Asia and towards Iran have not served our national interest.
Bilaterally, the US has complaints about our trade, investment and policies on intellectual property rights. Its pharmaceutical sector is especially aggrieved because of our patent policies. We want to push "Make in India", but American companies oppose decisions on preferential market access to locally established units for encouraging manufacturing in India. The sentiment against outsourcing, restrictions on movement of professionals, visa issues, the long pending totalization agreement are subjects of difficulty in our relations. We have rhetorical, but no real, convergence on climate-change issues, on which the US continues to pressure us. The US is also pushing for "high quality" trade agreements in the Asia-Pacific, going beyond World Trade Organization accords, that would leave us out, as in the case of the Asia-Pacific Economic Cooperation.
In this background, it is not surprising that the prime minister, Narendra Modi, would want to keep engaging the US so as to expand the area of shared interests and reduce differences. Building on the former and narrowing the latter will take time and effort. If the US does not find India an easy partner because of our political inhibitions and systemic deficiencies, we will find an impatient, lobby-driven US, which conflates a "level playing field" with the wish-list of its corporations, difficult as well.
To criticize Modi for wanting to galvanize our vitally important relationship with the US by his second visit there is quite misplaced. To dismiss the visit as all hype and hoopla meant to build Modi's personal image, with little achieved concretely, is being too partisan. If Modi's skilful handling of his foreign visits and his adulation by the diaspora strengthen him domestically, the Opposition may be discomfited, but that is no reason to deny national gains accruing from his popularity abroad. Modi is pursuing ambitious plans: Make in India, Skills India, Digital India, Clean India, Start-Up India, Smart Cities, infrastructure development, indigenous defence manufacturing, cleaner energy and so on. To further them, engaging the US at the political, corporate and diaspora levels is important. More so, as Modi has a positive and confident message to convey, that of opportunities that India offers. This message has become even more relevant after the slowdown of the Chinese economy.
Modi met American CEOs from the financial, manufacturing, infrastructure and media sectors, besides a dinner meeting with 42 CEOs from the Fortune 500 companies in New York. In the Silicon Valley, where 30 per cent of the start-ups are by those of Indian origin, his meetings with the Facebook, Google, Microsoft and Apple chiefs were unprecedented. At the very least, this conveyed the novel message of a modern-minded, tech-savvy, social-media-oriented Indian prime minister with all its intangible positives, apart from bolstering Modi's Digital India campaign, regarding which he received positive commitments in support of some of his initiatives.
Some point, not illegitimately, to the gap between what Modi seeks through lobbying abroad and insufficiently prepared ground conditions at home. We know that foreign investors, favourably impressed by Modi's promises, await delivery before making major commitments. Here, the government's difficulties with the land acquisition bill and the goods and services tax, the consequence of a lack of majority in the Rajya Sabha, would have sent signals of uncertainty to would-be investors. These would have needed countering and Modi's interactions in the US no doubt provided a good opportunity to address the question marks.
American and foreign investors are still looking for a predictable tax regime; concerns about retrospective application of our tax legislation have not been removed; on "ease of doing business" they are still looking for simplified procedures and less red tape; they want regulatory reform, quicker decision-making on tenders and faster infrastructure development. All these issues and expectations were flagged by them to Modi. If the Indian business leaders may be reluctant to convey their concerns to the prime minister forcefully, foreign business leaders would have no such inhibition. In any case, these are not issues that Modi is not aware of. He undoubtedly knows that if the gap between promise and delivery is not bridged quickly, his pitch will begin to lose credibility, with costs at home and abroad. The kind of interaction he is having serves the purpose of both listening to what the investors are looking for and keeping their attention focused on opportunities in India.
Even if the pace of change in India does not meet external (as well as internal) expectations, the answer does not necessarily lie in less activism by the prime minister abroad. It remains important to explain and assure, to emphasize the government's determination to move ahead in the direction it has charted. Of course, the demands of foreign investors in terms of ease of doing business in India are those of Indian investors too. If our investors begin to invest in India, foreign investors will follow. Ultimately, the principal action on the economic front lies at home.
Modi's US visit has supplemented the first India-US strategic and commercial dialogue held on September 22. The combining of the strategic and the economic suggests that even economic cooperation between the two sides is being seen as a strategic choice. In this new forum it was agreed to facilitate an innovation forum in 2016 in which the US and Indian entrepreneurs can cooperate. A joint work stream on ease of doing business was launched. Accelerating progress in infrastructure collaboration was emphasized. It was agreed that a US smart cities infrastructure business development mission will go to India in February, 2016, led by the deputy secretary of commerce. The US also affirmed its readiness to assist in India's ambitious goal of providing skills training to 400 million people over the next decade. An early signing of a new five-year memorandum of understanding on energy security, clean energy and climate change is envisaged. On defence and security cooperation, the important gain from the strategic and economic dialogue was the joint declaration on combating terrorism.
All in all, Modi's visit to the US can be seen as another milestone o
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