President Obama's Historic Visit to India: Key Talking Points

The U.S.-India civilian nuclear deal in 2008 marked a watershed moment in U.S.-India relations. President George W Bush and Prime Minister Manmohan Singh shared great relations and showed deep commitment to the partnership between these two countries. Taking this forward, President Obama stated during his speech at the Indian parliament that "the relationship between the United States and India--bound by our shared interests and our shared values--will be one of the defining partnerships of the 21st century." Yet, the relationship has not seen rapid progress.

Prime Minister Modi’s visit to the US shortly after taking office grabbed eyeballs across the globe. Many old statements were repeated and new promises made. However these need to translate into action. Yet there continue to exist a number of contentious issues on which the two sides need to make some headway. If the two countries can overcome or at least find ways to reach some middle ground on these challenges, this relationship can truly transform into the ‘strategic alliance’. And for the US-India strategic relationship that first big moment will come today, when President Obama lands in New Delhi.

Climate Change

On the Climate Change front, there were expectations from the American side to reach a deal getting India to commit to a quantified emissions cut, similar to what the US achieved along with China recently, at the APEC summit held in Beijing last year. However despite these expectations, the Indian climate change negotiators are unlikely to commit to specific emissions target on this visit by President Obama. India at present, has almost 300 million people  - almost the size of the American populace – that live without electricity, and its primary energy resource is – not the most environment friendly- Coal. However, given India’s rich reserves of Coal (5th largest in the world), it is imperative to use Coal to help India’s economic growth. The secretary for Coal in the Government of India Mr. Anil Swarup told Washington Post, “The question is what do you have in hand? We have coal,” he said. “There isn’t much choice available.” Similarly in article in Mint, Jairam Ramesh, India’s Former Minister of Environment and Forests, writes, “a trebling of coal consumption, if not a quadrupling, by 2030 looks inevitable given our demographic imperatives.”

Therefore given this reality, what we are coming to expect there to be an agreement on, is on India committing to the use of clean energy practices that help increase efficiency in power output, with special regard to its main base-load feedstock: Coal. A number of newspaper reports have noted that there is likely to be a commitment from India to commit to clean energy practices, Prime Minister Modi has long been a supporter of renewable energy practices, he announced earlier in his term a commitment to setting up renewable energy. The Economic Times reported (23rd of Jan, 2015. Online edition) The United States may extend funds and supply of equipment to help India achieve Modi government’s ambitious target of 100 gigawatt of solar power in the country by 2022. This requires an investment of Rs 6 lakh crore. 

Economy

Both countries committed to increased bilateral trade in goods and services. There are a number of issues that will need to be addressed if the countries are expected to make progress in this area. The most important for the U.S. is seeing the Modi government’s commitment to economic reform. India being a roadblock to the World Trade Organization’s Trade Facilitation Agreement until an agreement was reached on food subsidies resulted in the US becoming a little cautious. President Obama will be keen to see certain concrete reform measures and for this he may well have to wait until the Indian Finance Minister presents his first budget. Reports indicate that a revival of The Bilateral Investment Treaty (BIT) is being worked on. The U.S. has been urging India to begin negotiations on this since President Obama’s last trip to India in 2010. US companies want to see this negotiation take places at the earliest particularly to ensure protection of their Intellectual Property Rights (IPRs). While US companies seem optimistic about investing in India there exist differences between the two sides about the US proposal to increase H1B visas as India wants these to be company centric not individual based.

Nuclear Deal

Indian and US officials have been engaged in close consultations on the nuclear liability issue. The NDA government seems keen to reengage with the US on the civil nuclear energy front. While New Delhi has not made clear any change in policy on the liability issue there is much speculation a possible way forward. There also exist concerns in New Delhi about arrangements for monitoring its civil nuclear cycle.

Both Modi and Obama seem to be willing to accord to this relationship the priority it deserves. However this was true even of their predecessors. We hope that this visit yields more than headlines, photo-ops and builds on the good work and provides a renewed thrust to a relationship which leaders, both Democrat and Republican and from the Bharatiya Janta Party and Indian National Congress have worked hard to build since the turn of the century.

Posted on January 24, 2015 .