Change or Con­ti­nu­ity?

With P Pres­i­dent id t Obama Ob hav­ing h i se­cured d a sec­ond d pres­i­den­tial id ti l term, t what ht new poli­cies li i will In­dia work with? Or will the next four years be no dif­fer­ent than the last?

Southasia - - Cover story - By Sun­darara­jan Mu­rari

Now that Barack Obama, who cam­paigned on the slo­gan of change four years ago, has been voted back by a di­vided United States, In­dia looks for­ward to con­ti­nu­ity in US pol­icy per­haps with some changes in ap­proach rather than con­tent. The US will need In­dia more than ever be­fore to counter-bal­ance China’s pre-em­i­nence in the re­gion. In­dia for its part looks for­ward to a grow­ing strate­gic part­ner­ship with the US.

How­ever, this does not guar­an­tee that re­la­tions will be trou­ble free. There is scope for greater co­op­er­a­tion in the field of nu­clear en­ergy now that In­dia has en­acted a con­tro­ver­sial law giv­ing vir­tual im­mu­nity to for­eign sup­pli­ers of nu­clear re­ac­tors in the event of an ac­ci­dent. Be­sides, In­dia hopes for bil­lions of dol­lars of in­vest­ment in the re­tail sec­tor now that Walmart has en­tered the In­dian mar­ket through part­ner­ship with an In­dian firm. How­ever, the im­me­di­ate worry is Obama’s stand against out­sourc­ing and his com­mit­ment to cre­ate more jobs at home. A pol­icy such as this could mean strin­gent work visas, es­pe­cially for IT pro­fes­sion­als.

Speak­ing at the World Eco­nomic Fo­rum, In­dian Com­merce Min­is­ter, Anand Sharma said, “We ex­pect a more pro-ac­tive free trade pol­icy from the US dur­ing Pres­i­dent Obama’s sec­ond term. More­over, since we are very flex­i­ble in grant­ing visas to pro­fes­sion­als, we ex­pect the US to also be large-hearted in th­ese things, more so in a glob­alised econ­omy where we are in­ter-con­nected and in­ter-de­pen­dent. I think we must en­cour­age the move­ment of pro­fes­sion-

als and job cre­ation.”

In­dia’s IT-BPO in­dus­try recorded rev­enues of over $100 bil­lion in fi­nan­cial year 2012. Of this fig­ure, ex­ports ac­counted for $69.1 bil­lion or about 70 per cent. With the USA and EU con­tribut­ing a large chunk of the ex­ports, de­ci­sions made in th­ese coun­tries af­fect the IT in­dus­try’s for­tunes in In­dia.

The US con­tin­ues to face short­age of IT skills and re­quires com­pre­hen­sive changes in im­mi­gra­tion pol­icy. The Na­tional As­so­ci­a­tion of Soft­ware and Ser­vices Com­pa­nies (NASSCOM) has ex­pressed the ur­gent need for In­dia and the US to part­ner to­gether to fos­ter eco­nomic growth, de­velop an ed­u­cated and skilled work­force and cre­ate jobs in or­der to find so­lu­tions to bal­ance the cur­rent global sit­u­a­tion. “Rapid re­cov­ery in the US will ben­e­fit the en­tire global econ­omy and con­se­quently, our [In­dia IT ser­vices] sec­tor,” the in­dus­try body has said.

The con­tin­u­ing stale­mate of the Doha trade ne­go­ti­a­tions also raises warn­ing signs. The US, Europe and other devel­oped coun­tries have been at a dead­lock with In­dia, China and other emerg­ing economies on low­er­ing bar­ri­ers to fa­cil­i­tate in­creased global trade. Four years ago, the ne­go­ti­a­tions col­lapsed over is­sues of agri­cul­tural trade be­tween the United States, In­dia and China. A dis­agree­ment be­tween In­dia and the United States over a mea­sure de­signed to pro­tect poor farm­ers by al­low­ing coun­tries to im­pose a spe­cial tar­iff on cer­tain agri­cul­tural goods in the event of an im­port surge or price fall, led to grow­ing dis­agree­ments.

In the field of for­eign pol­icy, In­dia was not very com­fort­able with Obama’s first two years of pres­i­dency. His ini­tial at­tempt to woo China and pur­sue the so-called G-2 pol­icy as well as win over the Pak­istan mil­i­tary in light of NATO with­drawal from Afghanistan did not gel well with New Delhi’s geopo­lit­i­cal in­ter­ests. Both poli­cies even­tu­ally foundered. Now Obama has taken a tougher view of China as ev­i­denced in his “pivot to Asia” pol­icy. Fol­low­ing the Ab­bot­tabad raid that killed Osama bin Laden, Obama will have few il­lu­sions about Pak­istan and its mil­i­tary. Nev­er­the­less, the US will lean heav­ily on Pak­istan to fight its bat­tle in Afghanistan un­til the fi­nal exit.

In­dia and the U.S are al­ready co­op­er­at­ing on fight­ing ter­ror. The Coun­tert­er­ror­ism Co­op­er­a­tion Ini­tia­tive (CCI) signed be­tween the two coun­tries in July 2010 en­vis­ages in­ten­si­fied co­op­er­a­tion on is­sues rang­ing from money laun­der­ing to anti-ter­ror train­ing. The US has also shared in­for­ma­tion on the in­ter­ro­ga­tion of Pak­istani Amer­i­can David Headley, a key ac­cused in the Mum­bai ter­ror at­tack.

In Jan­uary 2011, the US Bureau of In­dus­try and Se­cu­rity (BIS) amended the Ex­port Ad­min­is­tra­tion Reg­u­la­tions (EAR) and re­moved nine In­dian de­fense and space com­pa­nies from the En­tity List (EL). Th­ese in­clude four sub­or­di­nates of In­dia’s De­fense Re­search and Devel­op­ment Or­ga­ni­za­tion (DRDO) and four sub­or­di­nates of the In­dian Space Re­search Or­ga­ni­za­tion (ISRO). A move such as this means that re­stric­tions on ex­port of tech­nol­ogy to com­pa­nies which have been in place since In­dia tested nu­clear weapons in 1998, have now been lifted. Since 2008, In­dia bought over $8 bil­lion in U.S. de­fense equip­ment, up from ef­fec­tively zero less than a decade ago. “When we com­plete de­liv­ery of In­dia’s $4 bil­lion in C-17 air­craft, our com­bined fleet will rep­re­sent the largest air lift ca­pa­bil­ity in the world,” says US Deputy Sec­re­tary Wil­liam J. Burns.

A crit­i­cal dis­pute area is the civil­ian nu­clear ini­tia­tive. Much of the ex­pected In­dia-U.S. co­op­er­a­tion in nu­clear en­ergy has been stymied by the Nu­clear Li­a­bil­ity Bill, which ef­fec­tively tar­gets U.S. nu­clear sup­pli­ers more than oth­ers.

To add to an al­ready un­com­fort­able re­la­tion­ship, New Delhi ab­stained from the U.N. Se­cu­rity Coun­cil vote on Libya. Obama’s im­me­di­ate pri­or­ity will be to pull out Amer­i­can mil­i­tary from Afghanistan by 2014. This will have strate­gic im­pli­ca­tions on the re­gion as a whole, as In­dia has in­vested heav­ily in that coun­try. Ul­ti­mately, New Delhi will pur­sue its own in­ter­ests even if it is at odds with the US, re­gard­less of its im­pact on strate­gic part­ner­ship. Washington knows that. S. Mu­rari is a se­nior In­dian jour­nal­ist who has been cov­er­ing Sri Lanka for the past 25 years. He was as­so­ci­ated with the Ban­ga­lore-based English daily, Dec­can Her­ald and re­tired as an as­so­ciate ed­i­tor of the news­pa­per.

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