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Finally, Modi travels to USA

Finally, Modi travels to USA
Prime minister Narendra Modi arrives in the United States of America on September 26, on a landmark visit, as a strong leader of the world’s largest democracy, with a dynamically changing economy and widely acknowledged global power status. The Obama administration is giving a red carpet welcome to the Indian leader. His first visit as head of government is turning celebratory especially for American Indians and it has equally raised great hopes for US business participation in India’s huge market once the Modi government’s reform agenda moves into stride and regulatory hurdles get eased.

Mr Modi will address the comity of nations at the UN General Assembly (September 27) before heading to Washington for crucial meetings with President Barack Obama (September 29-30). This Obama-Modi Summit at the White House will come atop recent developments related to the evolution of economic and strategic relationships being charted by leaders of major Asian-Pacific nations. Mr Modi’s talks with Prime ministers Shinzo Abe of Japan and Mr Tony Abbot of Australia followed by the visit of China’s President Xi Jinping to India have thrown up new opportunities for strengthening bilateral economic relationships between India and these major regional powers while their exchanges had not excluded geo-strategic concerns in the overall context of peace, stability and maritime security.  

In these bilateral summits, Mr Modi has largely looked at the prospects of attracting huge investments from Japan and China, both of which have indicated likely commitments of the order of US$ 35 billion and US$ 20 billion respectively, mainly for modernizing India’s infrastructure, designed to lift up its growth trajectory to 8-9 per cent over the next five years. From India’s point of view, the Abe-Modi discussions have been rated highly positive both in terms of substantial support which will be forthcoming from Japan for infrastructure development and for meeting some high-technology needs including defence.

There was, at the same time, considerable resonance in the joint declaration of the two leaders on the vital importance of ensuring peace and stability in Asia, Pacific and Indian Ocean regions. There was also a reference to enhanced maritime security cooperation and continuation of trilateral naval exercises at sea between the navies of India, Japan and the United States. India, somewhat similar to the US approach, would like a peaceful settlement of sovereignty disputes between China and half a dozen East and South East Asian nations over the East and South China seas among themselves.

What is at stake globally is free navigation for commerce and security of the waterways, especially over East and South China seas. China, which claims total sovereignty in the face of claims by half-a-dozen countries of the region, is opposed to US alternative proposal for international arbitration, if disputes could not be settled bilaterally or collectively. Considering the overall developments in the Asian region and globally, India and Japan have raised the level of bilateral relationship to one of ‘Special Strategic and Global Partnership’.

Mr Modi would be seeking investments on a considerable scale from USA in his meetings with the President and groups of American business. Trade and economic collaboration, with accent on ‘Make in India’ would dominate the White House talks though both India and USA have a series of trade and other concerns and demands made on the other. How far many of pending issues would be sorted out remains to be seen but both countries seem to realize that it is time to move from rhetoric to action in several fields, especially trade, investment and defence cooperation including participation of US firms in manufacture of high-tech equipment in India. The US Administration has been urging finalization of a Bilateral Investment Treaty for a long time (BIT).

Mr Modi will certainly list all the steps his government has announced such as larger caps for FDI in insurance, defence and other sectors and also opening up new areas for private sector like the Railways. He would also clarify whatever has been done so far to make doing business in India much easier. Given the supreme importance of USA in its market size, frontline technologies and innovative capabilities, India would be prepared to undertake certain further liberalisations in coming months.    

Of the series of MOUs to be signed and joint declarations to be issued from the White House, there would be one initiating a new program entitled Global Initiative of Academic Networks (GIAN) in Higher Education. GIAN aims at tapping the talent pool of scientists and entrepreneurs to engage with the institutes of higher education in India to augment the country`s existing academic resources, accelerate the pace of quality reforms and further strengthen India`s scientific and technological capabilities.

India’s commitment to multilateralism and trade facilitation without endangering its food security concerns would be reiterated and it is hoped that the WTO package deal on the subject would be facilitated for adoption in the near future. India has also to address US concerns about the degree of intellectual property protection that India extends in relation to pharmaceutical products, in particular. Not all such concerns including India’s nuclear liability law which is viewed as obstructive by US firms willing to set up nuclear power plants in India are likely to be overcome at the same time.

President Obama and Mr Modi would certainly review developments not only in Asia but more importantly the current happenings in the Middle East and the rise of a state based on terrorism spread over parts of Iraq and Syria and the US-led alliance’s air strikes to liberate those areas and to decimate the new global threat. In his address to the UN General Assembly on September 24, President Obama called for a collective effort of all nations to support Iraqis and Syrians fighting to reclaim their communities. He noted already 40 nations have offered to join this coalition. The President would be seeking India’s alignment in this global effort to counter terrorism. IPA
S Sethuraman

S Sethuraman

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