For a more transformative partnership
The big events were firstly, a dramatic telephone call by President Obama to President Rouhani of Iran (the first contact at the highest level since 1979) and later, Obama spoke of ‘a unique opportunity to make progress with the new leadership’ in Teheran on Iran’s nuclear programme.
He did not under-rate the risks and difficulties. Secondly, the UN Security Council voted unanimously requiring Syria’s Assad regime to put its chemical weapons under international control so that they can ultimately be destroyed. There would be consequences if the regime does not keep its commitments.
But, the day also had its downsides. More worrisome for the President was the Congressional gridlock over funding of Government, which forced a Federal Shutdown on 1 October, at the start of new fiscal year. Even more disastrous a threat hanging over the nation that eventually proved true was a Republican resistance to raising the debt ceiling sought by the Treasury before it runs short of funds by 17 October. As for visiting Manmohan Singh, he had been left comfortable by a stinging attack on his government back home from one of his own party leaders.
President Obama briefed the Prime Minister on recent developments on Iran and Syria, according to a joint statement, and Manmohan Singh complimented the President for his vision and courage ‘in giving diplomacy yet another chance’. India fully supported these, he said, especially with six million Indians living in Middle East and West Asia earning their livelihood. Anything that sustained the values of freedom and contributed to peace and stability in that region and outside would be in the interest of the people there and also of India and the global economy.
The Prime Minister was more than satisfied with the outcome of his ‘productive’ meeting with President Obama, which he had come for, he said, primarily to thank the President for his outstanding contribution to ‘strengthening, widening and deepening Indo-US relations’. At this meeting, the President has given a ‘powerful impulse’ in diversifying their co-operation beyond the frontiers of trade, investment and technology to defence production cooperation and energy security.
Reflecting the need emphasised on both sides for ‘more intensive defence cooperation’, a Joint Declaration on Defence Cooperation noted USA and India ‘share common security interests and place each other at the same level as their closest partners’. The Declaration provides for enhancing partnership in defence technology transfer, joint research, co-development and co-production. President Obama also encouraged the further participation of US firms in partnering India‘s efforts to enhance its defence capacities.
India, which has been increasing purchases of defence requirements from USA, already totaling over eight billion dollars, had sought co-production at home for future needs of air and naval surveillance aircraft and other equipment with enhanced capabilities. Government has recently raised the FDI cap for investment in defence equipment manufacture. US companies also look forward to concluding additional transactions to bring new capabilities to India’s services in the near future.
Manmohan Singh said in all the new areas like clean coal, energy-efficient technologies, environment or defence, and security-related cooperation with regard to intelligence gathering and counter-terrorism, India needs the United States ‘to be standing by our side’ as indispensable partners.
On Civil Nuclear Co-operation Agreement, the leaders noted the conclusion of a Preliminary Contract to develop a nuclear power plant in Gujarat, between the Nuclear Power Corporation of India (NPCIL) and the US companies Westinghouse and General Electric-Hitachi. They urged the companies to expedite the necessary work to establish nuclear power plants in Gujarat and Andhra Pradesh.
Indo-Pak relations and Afghanistan figured in the context of the two leaders’ ‘shared interest in reduction of tensions in the Subcontinent. Their joint statement condemned the September 26 terrorist attack in Samba (J and K), and called for Pakistan ‘to work toward bringing the perpetrators of the November 2008 Mumbai attacks to justice’.
In remarks later, the President thanked the Prime Minister for his ‘consistent interest in improving cooperation between India and Pakistan’. Manmohan Singh told the President he looked forward to meeting Prime Minister Nawaz Sharif ‘even though the expectations have to be toned down given the terror arm still active in our subcontinent’.
The Summit addressed trade and investment issues which were significant in the context of US business concerns and contentions about ‘protectionism’ on India’s part and developments related to tax policy and patent protection.
India and USA have already embarked on negotiations for a Bilateral Investment Treaty. The joint statement by President Obama and Manmohan Singh hoped it would foster ‘openness to investment, transparency, and predictability’ and thereby support economic growth and job creation in both countries’.
The Leaders underlined the need for expeditious progress to address all trade and investment policy issues of bilateral concern. They said there were no insurmountable impediments to trade liberalization as the hitches would be resolved and the business environment improved in both countries. They also agreed to consider establishing a Joint Committee on Investment in Manufacturing. Two-way trade in goods and services has been expanding and touched almost 100 billion dollars in 2012. US investments in India were of the order of 80 billion dollars.
President Obama expressed confidence that the ongoing Indian economic reforms and policy measures to liberalise India’s economy would accelerate economic growth, opening greater avenues for trade and creating jobs in both countries.
In this respect, the Leaders recognised in particular the role and contribution of the Indian and U.S. Information Technology industry and the IT enabled service industry in strengthening India-US trade and investment relations.
Manmohan Singh said he had conveyed to the President that, despite economic turbulence all around, our trade and investment relationship remained a high point of Indo-US engagement. He sought later in the day to allay misgivings at a meeting with US business leaders in New York. He referred to ongoing investment promotion efforts and reforms and hoped ‘visible results’ of economic improvement in the latter half of current fiscal year.
At the outset, the joint statement noted the two leaders reflected ‘proudly’ on US-India relations which, they said, are ‘stronger than ever before’, to make the global strategic partnership of the two largest democracies ‘a defining one for the 21st century’. IPA