October 14, 2014

Adding up the nickels and dimes

Suhasini Haidar



PTI IN STEP: "The expectations on the personal front between Mr. Modi and Mr. Obama were more than met given their interactions and the particularly poignant visit to Martin Luther King Jr's memorial." Picture shows them at the memorial in Washington.
None of the unfulfilled expectations of Narendra Modi's visit to the U.S. takes away from his substantial achievements in restarting relations that had been in cold storage for months
"I do not think Prime Ministers visits actually produce nickel and dime outcomes," former National Security Advisor Shivshankar Menon said at an event in Washington this week when faced with questions about specific outcomes of Prime Minister Narendra Modi's visit to the United States. "I do not think that's the purpose. The purpose is to push relationship as a whole forward, which was achieved," he added.

Mr. Menon, the key official who has been squiring India-U.S. relations for the past decade — first as Foreign Secretary and then as National Security Advisor — can certainly not be faulted for his conclusions. Mr. Modi has won applause all around for his five-day visit to New York and Washington. Yet as the dust settles on the Prime Minister's travels, it is important that some amount of stocktaking or "nickel and diming" also be done in order to assess the real costs and benefits of the visit, as it represents a major point in Mr. Modi's foreign policy.
Comparing visits

The visit to the U.S. came in unprecedented circumstances. The past year has seen a sudden free fall for India-U.S. relations, symbolised by the extreme reactions to the Devyani Khobragade incident on both sides. Added to that was the awkwardness with which the U.S. handled ties with Mr. Modi, who was a clear front-runner in the elections. The late reachout to him over the visa ban had to be compensated for in a very short period of time after he was elected. As a result, Mr. Modi's U.S. visit cannot be compared with the first visits of previous Indian Prime Ministers. Atal Bihari Vajpayee, for example, had another sort of welcome because of the big thaw he brought in relations between the countries in 2000, as did Manmohan Singh when the nuclear deal was announced some years later or when he visited in 2009 — a year after the Mumbai attacks — as U.S. President Barack Obama's first state guest.

Nor can Mr. Modi's visit to the U.S. be compared to his visits to other countries given the high stakes, the importance of the India-U.S. relationship to his plans for the economy, and the pitch to the massive Indian-American community in the U.S. The visit then must be graded on the expectations raised on both sides. While the expectations on the personal front between Mr. Modi and Mr. Obama were more than met given their interactions and the particularly poignant visit to Martin Luther King Jr's memorial , the specifics or "nickels and dimes" do not add up on several other fronts.

 Mr. Modi's assurances to U.S. businesses already invested in India have gone a long way in securing their interest in the Indian market  In Washington, expectations were clearly enunciated — the administration hoped for support for the U.S.'s coalition against the Islamic State and a rethink on India's decision against the Trade Facilitation Agreement at the World Trade Organization. Even as Mr. Modi flew into New York, Mr. Obama made an impassioned appeal at the United Nations for a global effort to join the 40 nations who had joined the coalition to "degrade and destroy" the IS. The White House said publicly that Mr. Obama would discuss with Mr. Modi "current developments in Afghanistan, Syria and Iraq, where India and the United States can work together with partners towards a positive outcome." Officials said privately that "outcome" didn't have to be anything more than moral support, as the U.S. didn't require logistical support and already had enough ground support from Gulf allies. However, for India, even this would have been a departure from policy. Only in 2001 did the country back a U.S.-led rather than a U.N.-led coalition. Mr. Modi went a step further in rejecting the coalition request, criticising the U.S. for failing to include all countries (pointing to Iran and Syria at the U.N.), and chiding the U.S. over Afghanistan during an interaction at the Council on Foreign Relations, saying it shouldn't "pull out early" as it did in Iraq.

On the economic front, India insisted that no WTO deal could be allowed until a "food security" agreement also went "hand in hand." For Mr. Obama, however, as a beleaguered President, an agreement would have been something he could have touted as a success, not just domestically, but also internationally, ahead of the G-20 summit in Australia in November. It was for this reason that Secretary of State John Kerry, Commerce Secretary Penny Pritzker, and Acting Deputy U.S. Trade representative Wendy Cutler made India's support for the TFA the highlight of their trips to Delhi in the past few months, with Mr. Kerry even saying the government's reversal was "the wrong signal to the world." When Commerce Minister Nirmala Sitharaman said the "WTO deal wasn't dead," many U.S. officials took that to mean a deal could still be hammered out in time for the Washington summit, but were proven wrong.
India's wish list

On the Indian side, the list of expectations was far longer, but perhaps more realistic than the one the U.S. had. This was discernible from the moves the Modi government had made in the run-up to his visit. For example, the government's step to uncap the prices of drugs was criticised by several health NGOs, as it raised the prices of life-saving treatments manyfold. But this failed to elicit any relaxation from the U.S. on market access for Indian companies. The joint statement issued also referred to a "high-level" group that would deal with Intellectual Property Rights issues — a group that has even been criticised by advocacy groups in the U.S. On nuclear issues, U.S. companies GE and Westinghouse remain inflexible on India's supplier liability law, even as the joint statement referred to a dialogue on "all implementation issues." On renewable energy, the government had hoped for big technology partnerships, especially on solar and wind energy, as it had only recently scrapped an anti-dumping law in a move aimed at helping U.S. businesses. Yet all that was announced was the facilitation of loans to the tune of a relatively modest $1 billion from Exim bank. A much-touted education agreement for 'edX' or online education never materialised. On visas, despite Mr. Modi's announcement that U.S. nationals would be granted 10-year visas barring "exceptional circumstances," the U.S. was not forthcoming on the relaxation India had demanded on the H1B visa. Difficulties for IT companies remained unsolved. When asked about this at a briefing for journalists after the visit, a senior Indian government official only said that visas are no longer "linked to reciprocity." Finally, there was no mention of the specific plans for co-production in defence on missiles and naval equipment that had brought a flurry of U.S. officials — from Vice President Joe Biden and Senator John McCain to Defence Secretary Chuck Hagel and Deputy Secretary of State Bill Burns — to India in the past year.

None of the unfulfilled expectations takes away from the substantial achievements of the Prime Minister's visit though, of which the most notable was the restarting of relations that had been in effective cold storage for months. Mr. Modi's command of the Indian diaspora, a powerful and influential constituency in the U.S., was another obvious take away from the visit. And his assurances to U.S. businesses already invested in India have gone a long way in securing and growing their interest in the market here. But if the nickels and dimes of the visit are to add up to establish a much richer partnership between the "world's largest democracies," one must not ignore what was not achieved in the U.S., even as Mr. Modi and Mr. Obama prepare to meet each other again at the G-20 summit.

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