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?
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.