Prime Minister Narendra Modi faces a big challenge — that of infusing vigour into the India-US relationship that had almost flattened out in the past couple of years. His strategy, as I see, is to approach it from three different ways; a metaphor here would be the three arrows in his quiver. The first would be his bilateral talks with US President Barack Obama. The second would be his meetings with the American business leaders and the diaspora will be the third.
Unlike other countries, it is not left to the US president to say how much money he is going to invest in India. Modi received the message from Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, but he won’t get the same from Obama. Abe had announced investments of up to $34 billion over the next five years, while Xi pledged $20 billion. What Obama is likely to have said is: Make your country more attractive for investments by US companies.
Because of the structural differences with the US economic system, Modi reached out to the American business sector directly — perhaps the first time an Indian prime minister had such extensive interactions with the American business community.
It would be interesting here to look back at Jawaharlal Nehru’s visit to the US in 1949, which was the first visit ever to that country by an Indian prime minister. Nehru came out disappointed from his meeting with American businesses and complained that all the Americans wanted to discuss was money!
Now, contrast this with Prime Minister Modi’s visit where he discussed, basically, capital and technology with American corporate leaders. It is a new situation. Modi is moving forward in his mission to raise India’s growth rate. For Modi, foreign policy is geared towards gaining support for his primary objective of growth and investments for India.
There are new elements in his foreign policy with three key thrust areas: prosperity (samruddhi), security (suraksha) and status (swabhimaan). Modi is clear about his objectives. Prosperity will come with faster economic growth, which, in turn, will require investments and technology. On security, this government believes India has become vulnerable because of the neglect of our defence capabilities. One way to overcome this problem would be to encourage manufacturing at home.
Last but not the least is India’s place in the world. The very first line of the relevant portion from the BJP’s manifesto says, “The BJP believes a resurgent India must get its rightful place in the comity of nations and international institutions.” We are a great civilisation and we must get our due place in the world. All three — samruddhi, suraksha and swabhimaan — have figured prominently in all his summit meetings with foreign leaders.
India has strategic partnerships with about 24 countries, but in Modi’s estimation, any country that gives India satisfaction on all these three points — prosperity, security and status — will become a special strategic partner, as is the case now with Japan. So, when we analyse Modi’s US visit, we must measure the success or otherwise of his visit in terms of these three key areas.
Insofar as some of the big takeaways from the Modi-Obama talks are concerned, I would not like to second-guess him. Modi’s style is unique in many ways. For instance, at the BRICS summit in Brazil, Modi brought up the issue of an alternative route to Kailash Mansarovar in his interaction with Xi. Similarly, in his United Nations General Assembly speech, he touched upon yoga and India’s soft power.
His discussions with Obama covered a whole range of bilateral, regional and multilateral issues and one there were certain announcements in this regard. Topping his agenda were trade and investments.
Modi will vigorously pursue the opening up of the Indian economy and seek American investments. A Bilateral Investment Treaty has been hanging fire; it was put on the backburner by the previous government in New Delhi. But the treaty is important for India because it would enable the country to attract US investments.
Similarly, on the security side, there was an announcement of the extension of the 10-year-old India-US defence cooperation agreement. Some new elements that India would insist on in the light of previous experience are: transfer of technology, co-production and co-development in the defence sector. Already, the Modi government has raised the FDI in defence from 26 percent to 49 per cent. That, coupled with Modi’s ‘Make in India’ slogan, should attract American manufacturers. The US has recently signalled its intention to share 34 sensitive technologies with India. Moreover, the US companies are acutely aware that European and Israeli companies would enter India in a big way if they keep on waiting for the FDI equity cap to be raised further.
Then there are the issues that are close to the heart of Modi and Obama viz climate change, renewable energy, civil nuclear cooperation, etc. A challenge for Modi would be how to soften the nuclear liability law to allow American companies to participate in the Indian civil nuclear energy sector. The BJP was responsible for making the law so tough in the first place. To expect Modi to relent or for him to go back to Parliament to scrap the law, may not be feasible. I feel the way to soften the nuclear liability law would be through an executive interpretation.
The other major areas of India-US cooperation could be education, science and technology, agriculture and outer space.
Talking of regional issues, Afghanistan was among those that topped the agenda. India is already a strategic partner of Afghanistan. Continued American presence beyond 2015 will ensure that the Taliban do not take over Afghanistan all over again. The good news is that the Afghan election row has been resolved, thanks to US intervention. That means a bilateral security agreement between the US and Afghanistan would be signed soon, which would facilitate US residual troops to stay on as insurance against a Taliban takeover.
Obama will expect India to play an active role in West Asia and East Asia. This will be a tricky issue. Obama has already collected about 40 countries in his support against the Islamic State. He wants India to join the coalition. From India’s perspective, it needs to worry about the fate of the 41 Indian nationals held as hostages by the Islamic State. Their lives cannot be put in jeopardy. One way out for India would be to invoke the stand it took in 2003 during the US military action in Iraq: that India would not want to involve itself in military operations unless they are conducted under the United Nations flag.
It is a historic engagement for many reasons and augurs well for an energised India-US strategic partnership in the years to come.
Lalit Mansingh is former Foreign Secretary
(As told to Ramesh Ramachandran)