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Rising India Looms Large as U.S. Shifts Attention to Asia
Rising India Looms Large as U.S. Shifts Attention to Asia - Businessweek
Indias growing economy, rising strategic influence and potential as a democratic counterbalance to China are making the South Asian nation a vital element of U.S. commercial and military strategy.
The latest evidence of Indias importance to the U.S. came last week in New Delhi, when Defense Secretary Leon Panetta welcomed a larger role for India in Afghanistan after the NATO- led coalition withdraws its combat forces in 2014. Secretary of State Hillary Clinton visited India last month.
The two nations are expanding ties as the U.S. puts a higher priority on Asia and as U.S. relations with Pakistan -- Indias neighbor and rival -- grow increasingly strained. Today, Clinton will host a dialogue in Washington between the U.S. and India, which was the only country in the region named as a long- term partner in a strategic outlook released by the Pentagon in January.
We have an enormous stake in Indias emergence as a global power, Michael Froman, deputy U.S. national security adviser for international economic affairs, said yesterday at an event organized by the U.S.-India Business Council. President Barack Obama views India as one of his top foreign policy priorities and one of the most important bilateral relationships.
Underlying the U.S. pursuit of a closer bond with India is a burgeoning economic relationship. Bilateral trade jumped five- fold during the last decade, fueled by Indias purchases of U.S. weapons and collaboration on clean energy, counter-terrorism, cybersecurity and monsoon forecasting. Indias growing middle class has also become an attractive market for U.S. exports.
Mending Ties
After decades of mutual suspicion during the Cold War, which prompted a U.S. tilt toward Indias arch rival Pakistan 40 years ago, U.S. President Ronald Reagan began to mend ties with India in the 1980s, allowing sales of advanced U.S. computers and high technology equipment.
A high-water mark in the relationship came in 2005, when President George W. Bush and Indias Prime Minister Manmohan Singh signed a civil-nuclear cooperation agreement that allowed India -- which is not a signatory to the Nuclear Non- Proliferation Treaty and has nuclear weapons -- to obtain atomic fuel for its nuclear energy plants.
As part of todays strategic dialogue, the third of such annual talks between the countries, Clinton is to meet her counterpart, Indian Minister for External Affairs S.M. Krishna. The Indian delegation includes four other cabinet-rank ministers and several other top officials.
Two days before the foreign ministers visit, India was granted a renewable, 180-day exemption from new U.S. financial sanctions in exchange for demonstrating that its reducing its dependence on crude oil imports from Iran.
Bilateral Trade
U.S.-India bilateral trade in goods and services is expected to reach $100 billion this year, U.S. Ambassador to India Nancy Powell said yesterday in Washington. Thats up from $18 billion in 2001.
Indian purchases include Chicago-based Boeing Co.s (BA) (BA) 787 Dreamliner aircraft and its C-17 military transport plane, as well as Bethesda, Maryland-based Lockheed Martin Corp.s (LMT) (LMT) C-130J military cargo aircraft.
Two-way investment flows also have grown. Indian companies have a presence in 43 U.S. states in different sectors of the economy and have created 280,000 jobs in America, Nirupama Rao, Indian Ambassador to the U.S., said yesterday.
The relationships strength is not confined to or driven only by our governments, she said, adding that Indian students contribute $3 billion in annual tuition to U.S. universities.
Powell said India is the worlds largest recipient of U.S. work visas, getting 65 percent of all U.S. visas issued to high- skilled workers.
Expectations Gap
Still, landmark accords such as the energy cooperation agreement have created high expectations on both sides that all bilateral engagements should lead to measurable outcomes or deliverables, said Richard Armitage, former U.S. deputy secretary of state under George W. Bush.
Both sides have judged ourselves on these deliverables and patted ourselves on the back for agreements such as the nuclear deal, Armitage, president of Armitage International, an Arlington, Virginia-based consulting firm, said in an interview.
A strategic relationship with India has huge potential, but it will be a whole lot of hard work to accomplish it, said Teresita Schaffer, a South Asia specialist at the Brookings Institution in Washington who served as a U.S. diplomat in India and was ambassador to Sri Lanka.
Theres been an expectations gap in part because there have been unrealistic expectations on both sides, Schaffer said in an interview yesterday.
Liability Protection
U.S. business leaders have been frustrated by Prime Minister Singhs failure to advance proposed policy changes. For example, U.S. companies continue to face obstacles in selling atomic fuel and technology to India because Singhs government hasnt passed legislation to shield suppliers of nuclear reactors from liability in the event of an accident.
Liability protection is key to General Electric Co. (GE) (GE), based in Fairfield, Connecticut, and Cranberry Township, Pennsylvania- based Westinghouse Electric Co., which are interested in supplying Indias nuclear power projects.
U.S. companies are concerned that Indias investment environment has deteriorated or that domestic political challenges are slowing the pace of reform, Froman said. This is worrisome because the business community is a critical component of the U.S.-India relationship, he said.
Wal-Mart Help
Other Singh initiatives, such as plans to open up the countrys $1.7-trillion economy to foreign insurers and retailers, including New York-based American International Group Inc. (AIG) (AIG) and Wal-Mart Stores Inc. (WMT) (WMT), based in Bentonville, Arkansas, have been shelved because of protests from opposition parties and members of his own coalition.
Megastores such as Wal-Mart could help India, where malnutrition remains a serious problem, achieve food security and improve the food-to-market supply chain, said Timothy Roemer, Obamas first ambassador to India. Roemer said that almost 30 percent of Indias crops rot in fields because of a lack of transportation to markets.
Indian officials, for their part, are irritated by export control laws restricting transfer of U.S. military technology. Responding to those concerns, Panetta announced in New Delhi an effort to streamline our bureaucratic processes and make our defense trade more simple, responsive, and effective.
To the degree we reform our export control legislation the opportunities for India to buy U.S. goods will increase, said Ashley Tellis, an India specialist at the Carnegie Endowment for International Peace in Washington.
Fertile Opportunity
Chinas slowing growth and the financial crisis in Europe create a fertile opportunity for the U.S. and India to build our middle classes, Roemer said. The U.S. manufacturing sector needs Indias market potential, he said.
A larger goal for both sides is to negotiate a bilateral investment treaty that can become the foundation for a free- trade agreement, Roemer, whos now a senior director at APCO Worldwide Inc., a Washington-based public-affairs firm, said in an interview.
India isnt keen to become a counterweight to China simply to help long-term U.S. goals, Armitage said. India doesnt want to be a pawn in someone elses play, because theyve their own difficulties with China having to do with territory and water disputes, he said.
Autonomous Policy
Indias drive to maintain an autonomous foreign policy, which hearkens back to the countrys role as a founder of the Non-Aligned Movement during the Cold War, may frustrate U.S. policy makers looking to the South Asian nation to do more militarily in the Asia-Pacific region.
Just because the U.S. wants India to play a greater role in Afghanistan and in the broader Asia-Pacific does not mean India will do so, said C. Raja Mohan, the head of strategic studies at the Observer Research Foundation, a New Delhi-based policy research group.
The U.S. push for India to increase its presence in Afghanistan comes after three years of warning the country to limit its profile there because of objections from Pakistan, Raja Mohan said in a phone interview.
India already has pledged $2 billion in aid to Afghanistan and has helped build the new Afghan parliament. The two countries last October signed an agreement that allows Indian training of Afghan troops.
Asked about U.S. calls for India to play a larger role in Asias security, Krishna said in an interview last night: If we are playing a larger role, its because we see its in our interests, its not at the behest of anyone else.
Rising India Looms Large as U.S. Shifts Attention to Asia - Businessweek
Indias growing economy, rising strategic influence and potential as a democratic counterbalance to China are making the South Asian nation a vital element of U.S. commercial and military strategy.
The latest evidence of Indias importance to the U.S. came last week in New Delhi, when Defense Secretary Leon Panetta welcomed a larger role for India in Afghanistan after the NATO- led coalition withdraws its combat forces in 2014. Secretary of State Hillary Clinton visited India last month.
The two nations are expanding ties as the U.S. puts a higher priority on Asia and as U.S. relations with Pakistan -- Indias neighbor and rival -- grow increasingly strained. Today, Clinton will host a dialogue in Washington between the U.S. and India, which was the only country in the region named as a long- term partner in a strategic outlook released by the Pentagon in January.
We have an enormous stake in Indias emergence as a global power, Michael Froman, deputy U.S. national security adviser for international economic affairs, said yesterday at an event organized by the U.S.-India Business Council. President Barack Obama views India as one of his top foreign policy priorities and one of the most important bilateral relationships.
Underlying the U.S. pursuit of a closer bond with India is a burgeoning economic relationship. Bilateral trade jumped five- fold during the last decade, fueled by Indias purchases of U.S. weapons and collaboration on clean energy, counter-terrorism, cybersecurity and monsoon forecasting. Indias growing middle class has also become an attractive market for U.S. exports.
Mending Ties
After decades of mutual suspicion during the Cold War, which prompted a U.S. tilt toward Indias arch rival Pakistan 40 years ago, U.S. President Ronald Reagan began to mend ties with India in the 1980s, allowing sales of advanced U.S. computers and high technology equipment.
A high-water mark in the relationship came in 2005, when President George W. Bush and Indias Prime Minister Manmohan Singh signed a civil-nuclear cooperation agreement that allowed India -- which is not a signatory to the Nuclear Non- Proliferation Treaty and has nuclear weapons -- to obtain atomic fuel for its nuclear energy plants.
As part of todays strategic dialogue, the third of such annual talks between the countries, Clinton is to meet her counterpart, Indian Minister for External Affairs S.M. Krishna. The Indian delegation includes four other cabinet-rank ministers and several other top officials.
Two days before the foreign ministers visit, India was granted a renewable, 180-day exemption from new U.S. financial sanctions in exchange for demonstrating that its reducing its dependence on crude oil imports from Iran.
Bilateral Trade
U.S.-India bilateral trade in goods and services is expected to reach $100 billion this year, U.S. Ambassador to India Nancy Powell said yesterday in Washington. Thats up from $18 billion in 2001.
Indian purchases include Chicago-based Boeing Co.s (BA) (BA) 787 Dreamliner aircraft and its C-17 military transport plane, as well as Bethesda, Maryland-based Lockheed Martin Corp.s (LMT) (LMT) C-130J military cargo aircraft.
Two-way investment flows also have grown. Indian companies have a presence in 43 U.S. states in different sectors of the economy and have created 280,000 jobs in America, Nirupama Rao, Indian Ambassador to the U.S., said yesterday.
The relationships strength is not confined to or driven only by our governments, she said, adding that Indian students contribute $3 billion in annual tuition to U.S. universities.
Powell said India is the worlds largest recipient of U.S. work visas, getting 65 percent of all U.S. visas issued to high- skilled workers.
Expectations Gap
Still, landmark accords such as the energy cooperation agreement have created high expectations on both sides that all bilateral engagements should lead to measurable outcomes or deliverables, said Richard Armitage, former U.S. deputy secretary of state under George W. Bush.
Both sides have judged ourselves on these deliverables and patted ourselves on the back for agreements such as the nuclear deal, Armitage, president of Armitage International, an Arlington, Virginia-based consulting firm, said in an interview.
A strategic relationship with India has huge potential, but it will be a whole lot of hard work to accomplish it, said Teresita Schaffer, a South Asia specialist at the Brookings Institution in Washington who served as a U.S. diplomat in India and was ambassador to Sri Lanka.
Theres been an expectations gap in part because there have been unrealistic expectations on both sides, Schaffer said in an interview yesterday.
Liability Protection
U.S. business leaders have been frustrated by Prime Minister Singhs failure to advance proposed policy changes. For example, U.S. companies continue to face obstacles in selling atomic fuel and technology to India because Singhs government hasnt passed legislation to shield suppliers of nuclear reactors from liability in the event of an accident.
Liability protection is key to General Electric Co. (GE) (GE), based in Fairfield, Connecticut, and Cranberry Township, Pennsylvania- based Westinghouse Electric Co., which are interested in supplying Indias nuclear power projects.
U.S. companies are concerned that Indias investment environment has deteriorated or that domestic political challenges are slowing the pace of reform, Froman said. This is worrisome because the business community is a critical component of the U.S.-India relationship, he said.
Wal-Mart Help
Other Singh initiatives, such as plans to open up the countrys $1.7-trillion economy to foreign insurers and retailers, including New York-based American International Group Inc. (AIG) (AIG) and Wal-Mart Stores Inc. (WMT) (WMT), based in Bentonville, Arkansas, have been shelved because of protests from opposition parties and members of his own coalition.
Megastores such as Wal-Mart could help India, where malnutrition remains a serious problem, achieve food security and improve the food-to-market supply chain, said Timothy Roemer, Obamas first ambassador to India. Roemer said that almost 30 percent of Indias crops rot in fields because of a lack of transportation to markets.
Indian officials, for their part, are irritated by export control laws restricting transfer of U.S. military technology. Responding to those concerns, Panetta announced in New Delhi an effort to streamline our bureaucratic processes and make our defense trade more simple, responsive, and effective.
To the degree we reform our export control legislation the opportunities for India to buy U.S. goods will increase, said Ashley Tellis, an India specialist at the Carnegie Endowment for International Peace in Washington.
Fertile Opportunity
Chinas slowing growth and the financial crisis in Europe create a fertile opportunity for the U.S. and India to build our middle classes, Roemer said. The U.S. manufacturing sector needs Indias market potential, he said.
A larger goal for both sides is to negotiate a bilateral investment treaty that can become the foundation for a free- trade agreement, Roemer, whos now a senior director at APCO Worldwide Inc., a Washington-based public-affairs firm, said in an interview.
India isnt keen to become a counterweight to China simply to help long-term U.S. goals, Armitage said. India doesnt want to be a pawn in someone elses play, because theyve their own difficulties with China having to do with territory and water disputes, he said.
Autonomous Policy
Indias drive to maintain an autonomous foreign policy, which hearkens back to the countrys role as a founder of the Non-Aligned Movement during the Cold War, may frustrate U.S. policy makers looking to the South Asian nation to do more militarily in the Asia-Pacific region.
Just because the U.S. wants India to play a greater role in Afghanistan and in the broader Asia-Pacific does not mean India will do so, said C. Raja Mohan, the head of strategic studies at the Observer Research Foundation, a New Delhi-based policy research group.
The U.S. push for India to increase its presence in Afghanistan comes after three years of warning the country to limit its profile there because of objections from Pakistan, Raja Mohan said in a phone interview.
India already has pledged $2 billion in aid to Afghanistan and has helped build the new Afghan parliament. The two countries last October signed an agreement that allows Indian training of Afghan troops.
Asked about U.S. calls for India to play a larger role in Asias security, Krishna said in an interview last night: If we are playing a larger role, its because we see its in our interests, its not at the behest of anyone else.
