The U.S. is stepping up diplomatic
engagement with India before a high-stakes visit to Washington
in late September by new Prime Minister
Narendra Modi.
Secretary of State
John Kerry departs today for
New Delhi,
where he will be joined by Commerce Secretary
Penny Pritzker for
“strategic dialogue” meetings intended to identify topics for
bilateral attention. Kerry is signaling the Obama
administration’s priority on strengthening U.S.-India ties by
keeping his commitment to make the trip even as he tries to deal
long-distance with the war over Gaza in the Mideast.
The two Cabinet members will be the most senior U.S.
officials to visit since Modi’s May election, in which he
promised major policy changes to overcome slowing
economic
growth and spur trade and investment. They will be followed by
Defense Secretary Chuck Hagel and by officials who will prepare
for the meeting between Modi and President
Barack Obama.
The effort is overdue, said Frank Wisner, a former U.S.
ambassador to India. He said that trade, intellectual property
and other disputes have eroded confidence on both sides since
Obama, in a November 2010 address to the Indian Parliament,
envisioned U.S.-India ties becoming “one of the defining
partnerships of the 21st century.”
“Since 2010, the high-water mark of President Obama’s
trip, the relationship has been on hold,” Wisner, an
international affairs adviser at Squire Patton Boggs LLP in
Washington, told a Senate panel this month. “If anything, I
would say it’s atrophied and requires attention.”
Strained Relations
U.S.-India relations hit a low point at the end of last
year after an Indian diplomat was arrested in
New York, strip-searched and charged with visa fraud for allegedly underpaying
her babysitter.
Also complicating the relationship is Modi’s past conflict
with the U.S., which denied him a visa in 2005. The move
concerned his alleged role in 2002 Hindu-Muslim riots that
killed about 1,000 people, mostly Muslims, in the state of
Gujarat where he was chief minister. Modi has denied the
accusations repeatedly, and a Supreme Court-appointed panel
found no evidence he gave orders that prevented assistance from
reaching the victims.
“He is not likely to let lingering resentment” over the
visa issue undermine cooperation in areas that will advance his
national priorities, according to
Vikram Singh, a former
Pentagon official who’s now vice president for national security
and international policy at the Center for American Progress in
Washington.
Amway Executive
The most recent impediments have been alleged U.S.
electronic eavesdropping on Modi’s political party and the
jailing of Amway Corp.’s India unit chief executive William
Pinckney on a consumer fraud complaint. He was released on bail
after two months following U.S. pressure in advance of Kerry’s
visit. The Ada, Michigan-based company has disputed the basis
for the charges.
Kerry said yesterday that the Obama administration wants to
create greater opportunities for U.S. and Indian businesses as
well as to expand cooperation on investment,
climate change and
security issues.
“This is a potentially transformative moment in our
partnership with India, and we’re determined to deliver on the
strategic and historic opportunities that we can create
together,” Kerry said, speaking at the Center for American
Progress, which is initiating an “India 2020” research
program.
U.S. officials say both nations can benefit from expanded
trade. Annual two-way trade in goods and services reached almost
$100 billion in 2013, up 61 percent from 2009 and a fivefold
increase since 2000, according to U.S. Assistant Secretary of
State Nisha Desai Biswal, the State Department’s top official
for
South Asia.
Facing ‘Impediments’
Kerry said the U.S. goal is to see trade expand to $500
billion a year -- by a date he didn’t specify -- and, “whatever
impediments we may face along the way, we need to always be
mindful of the opportunities and the bigger picture.”
“It is completely in our mutual interest to address those
obstacles that kind of raise their head here and there” and to
remember that “a lot bigger opportunities come from more robust
ties,” Kerry said.
India was the 18th-largest goods
export market for the U.S.
in 2013, totaling $21.9 billion, down 1 percent from 2012 but up
more than fourfold from 2003, according to the Office of the
U.S. Trade Representative. India was the U.S.’s 10th-largest
supplier of goods imports in 2013, totaling $41.8 billion in
2013, up 3.2 percent from 2012, and up more than threefold from
2003.
Indian Priorities
The Modi government has identified as its priorities
infrastructure, manufacturing, modernizing the military,
energy
security, attracting more foreign investment and expanding
access to skills training and education.
“Our private sector is eager to be a catalyst in India’s
economic revitalization,” Kerry said. “American companies lead
in exactly the key sectors where India wants to grow.”
Before the strategic dialogue, Pritzker is scheduled to
meet with Indian business leaders in Mumbai.
U.S. priorities include expanding defense cooperation,
easing business conditions, eliminating barriers to U.S.
companies’ participation in nuclear-power projects, and greater
coordination in addressing Asia security matters from
Afghanistan to
China.
Treaty Hurdles
Hurdles include disputes involving protectionism,
retroactive taxation, intellectual-property safeguards, and
nuclear-power liability. Kerry and Indian External Affairs
Minister
Sushma Swaraj may discuss whether negotiations on a
bilateral investment treaty -- pending for five years and
stalled since last year -- could be completed before the Modi-Obama summit.
The distance between the two sides on that treaty may
“remain too great to bridge in the near term,” according to
Singh, the former U.S. official.
How much the economic relationship advances will depend on
whether Modi carries though with his reform agenda, said Ashley
Tellis, senior associate in the South Asia program at the
Carnegie Endowment for International Peace in Washington.
“To the degree that the Modi government moves with
ambition, there will be greater opportunity for American
companies,” Tellis said.
Hanging over the bilateral discussions is the July 31
deadline for World Trade Organization talks, which are at risk
of collapse because of India’s questioning of measures accepted
by the previous government.
Defense Secretary Hagel is due to lead a delegation to the
Indian capital in early August to discuss expanding defense
ties. India is now the U.S.’s largest foreign defense market,
importing $1.9 billion of U.S. weapons last year, according to
IHS Jane’s, a defense and security analysis company.
To contact the reporter on this story:
Terry Atlas in
Washington at
tatlas@bloomberg.net
To contact the editors responsible for this story:
John Walcott at
jwalcott9@bloomberg.net
Larry Liebert, Justin Blum
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