PM Modi’s visit to US, Resolving the NPA issue: Key Challenges Current Affairs 28th June, 2017DEVENDRA VISHWAKARMA
PM Modi’s visit to US
- This was PM Modi’s fifth US visit.
- PM Modi remarked that when it comes to the development of the world’s two largest democracies, India remains a “driven, determined, and decisive partner”.
- Donald J Trump on Twitter remarked- “Important strategic issues to discuss with a true friend.”
- For India, which kept expectations muted for the visit, it was clearly a moment of triumph.
- It was an effective and efficient meeting between two extraordinarily strong leaders united by a common goal: How to advance his own country’s interests first.
Finding common ground:
- In statecraft, a rival’s rival is a friend. China’s geopolitical ambitions from One Belt One Road to dominating the South China Sea, not to mention its failed efforts to contain North Korea, all drove Trump closer to Modi who additionally offered Trump what the latter has been seeking from every world leader: Solid cooperation in fighting terrorism, extremism, and radicalisation. These assurances for Trump have not been forthcoming from traditional American allies in Europe, a region where Trump continues to be unpopular.
- The evolution of global geopolitics has led to an unprecedented convergence between the US and India. The commercial imperative for closer ties is clear for American companies seeking to do business in the fastest growing large economy in the world. On the flipside, India’s strength in the services sector provides US companies with a deep competitive edge.
On economic front:
- On economic front- Trump’s slogan, “Make America Great Again” is directly at odds with Modi’s vision of “Make in India” because both nationalist leaders are actively attempting to increase manufacturing in their respective countries as a pathway to lift their respective middle classes. Companies such as Infosys have already done the unthinkable and announced massive plans to hire Americans in the US and scale back hiring in India.
- On the economic front, India came under increased U.S. pressure on IPRs.
- The HIB visa issue remained unaddressed.
- Trump duly noted his intent to reduce the US trade deficit with India. He highlighted that the US is trying to get higher prices for a long-term contract to sell natural gas to India. He was glad to note an Indian airline’s recent order of “100 new American planes, one of the largest orders of its kind, which will support thousands and thousands of American jobs”. In the delegation-level talks, Trump also thanked Modi for the Indian government’s decision to purchase 22 unarmed Guardian drones from the US.
- In terms of defence, India got the 22 Guardian drones it’s been keen to add to its arsenal and significantly, it’s the first non-Nato ally to be allowed to buy these hi-tech weapons.
- Further defence equipment sales to India could help reduce the US-India trade deficit and improve the US’s defence-industrial manufacturing base.
- Background- In August 2016, the Government of India finalised the Logistics Exchange Memorandum of Agreement (LEMOA). For its part, the US government recognised India as “Major Defense Partner”.
- Hours after Modi’s arrival, the Americans sent out an even stronger signal by declaring Hizbul Mujahidden chief Syed Salahuddin a “Specially Designated Global Terrorist”. This vindicated New Delhi’s position of Kashmiri separatism being fuelled by Pakistan as a part of its sub-conventional warfare against India.
- In turn, India pledged to join the United States’ campaign against North Korea’s nuclear weapons.
- The language on Pakistan was tougher and more direct than before. In a joint statement, the leaders called on Pakistan to ensure its territory is not used to launch terrorist attacks on other countries. They further called on Pakistan to “expeditiously bring to justice perpetrators” of the 26/11 Mumbai, Pathankot, and other cross-border terrorist attacks by Pakistan-based groups.
- The joint statement released by India and US can be seen as an indicator of change in Washington’s stance, to accede to India’s views on the Chinese Belt and Road Initiative. The statement supports regional economic connectivity projects provided they respect “sovereignty and territorial integrity, the rule of law, and the environment” and employ “responsible debt financing practices”.
- The statement recognizes India and the US as two “democratic stalwarts in the Indo-Pacific region”—a clear hint towards building a coalition of democratic countries against non-democratic forces (read China) in the region.
- Perhaps significantly, the specific references to the South China Sea dispute and China in last year’s joint statement were replaced with a call on “all nations to resolve territorial and maritime disputes peacefully and in accordance with international law”. This could suggest that the strategic outlook that underpinned the India-US relationship is changing, as President Trump turns away from seeking to contain Chinese power in Asia.
On climate change:
- Climate change, the star of the 2016 joint statement, has disappeared from the 2017 joint statement. For Indian farmers, already hard hit by climate change this issue is key.
- President Trump’s decision to walk back on the US’s Paris Agreement commitments marks a major blow.
- Many bilateral issues including India’s concerns on the immigration process and H1B visa curbs, and Mr. Trump’s withdrawal from the Paris climate accord, which will leave India’s climate change financing handicapped remains undiscussed.
- The two countries need to move past obvious headwinds such as India’s IP standards and the immigration executive orders affecting high-skilled workers in the US.
- On the face of it, “America First” and “Make in India” are not natural points of convergence, but they need not be matters of conflict either — only if both countries avoid protectionist measures. Since the Trump administration is keen on bilateral treaties instead of multilateral trade deals, it may be a tangible outcome if the two governments set their goals on negotiating a bilateral investment treaty.
- Divisive political sentiments can be overcome as Indian companies make it their mandate to hire locally in the US.
- On matters of trade, climate change and high-tech visas, the meeting resulted in few successes. Intellectual property rights and trade regulations could again occupy centre stage in relations between the two countries. Bilateral talks should continue to sort out these issues.