America’s business is business: Improving Indo-US ties depends on getting the economics right

Dr. Rajiv Kumar

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Dear Mr. Sagar The article below appeared in the Times of India on September 24th 2014. Your feedback and response will be truly appreciated. Best regards Rajiv Kumar  AMERICA’S BUSINESS IS BUSINESS Improving Indo-US ties depends on getting the economics right ISLAMABAD: Prime Minister Narendra Modi’s upcoming visit to the US has aroused great interest in India — expectedly so — but surprisingly also here. In Pakistan they are speculating, for obvious reasons, about how strong the India-US relationship is likely to become and hoping that Modi and Prime Minister Nawaz Sharif will meet on the sidelines of the UN General Assembly meeting. The visit, coming as it does after Modi’s sojourns in Nepal and Japan and the Chinese president’s visit to India, is seen as the culmination of his bilateral foreign policy priorities. During his US visit, Modi will hopefully focus sharply on improving business to business (B2B) ties between the two countries. He must already know that the principal drivers of US foreign and geostrategic policy are underlying interests of US big business and its MNCs. On our part too, Indian exporters need greater access to the $15 trillion US market to be able to achieve a qualitative jump in our export effort, essential for generating much-needed employment. Our SMEs have an insatiable appetite for new products, process technologies and access to marketing networks. It is therefore imperative that Modi is successful in enthusing US private business into joining his ‘Make in India’ campaign. It is worth remembering that no emerging economy has successfully undertaken its economic transition in recent decades without access to the US market, its frontline technologies and MNC networks. This effort will admittedly be transactional in nature. However, there is nothing illegitimate about focussing on transactional issues if that serves India’s national interest. We have to overcome mistrust in India-US B2B relations to build a truly strategic partnership without joining or appearing to join the US camp. To build trust, Modi will have to convince hard-headed US business leaders. He can do so by: listening though not necessarily agreeing to all that is said; finalising the bilateral investment treaty (BIT); clearly identifying a major defence project for a US consortium; assuring that the insurance Bill will be passed in the next parliamentary session along with the one for foreign universities, permitting high quality US universities to open campuses in India; proposing a large scale and ambitious green energy R&D project involving collaboration bet-ween the two countries; tackling the vexed intellectual property protection issue by urging US corporates to distinguish bet-ween executive action and judicial activism in India; and renewing the 10-year India-US defence agreement. He should not waste his poli-tical capital by bringing up the issue of India’s membership of the UN Security Council. He knows that India’s time will come when it has built the needed economic and strategic clout. But most of all, Modi will rise hugely in the estimation of the US people and their corporate and political leaders if he does not stand on protocol or personal ego and chooses to address gathered businessmen at the US Chamber of Commerce. Ideally he should walk across from there for his summit at the White House! This will lay the foundation for his sustained popularity in the US, which he needs given that he is starting his innings and President Obama’s administration is in its final phase already. Modi could achieve another major breakthrough by meeting Nawaz Sharif in New York. Let’s hope it is not already too late to be on his agenda. It will further endear him to his US hosts who are keen to see an Indo-Pak rapprochement. This will surely raise Sharif’s political stature in these beleaguered times in Pakistan. India owes this to Sharif who made improvement in Indo-Pakistan ties a central plank of his election campaign and accepted Modi’s invitation to attend the swearing-in ceremony, reportedly against explicit advice from powerful stakeholders in Pakistan. Modi could additionally offer to finalise the long pending bilateral MoU on power exports from India to Pakistan and increase the frequency of high level political contacts between the two countries. While presenting all our security concerns for Sharif’s attention, Modi should make the unilateral offer of normalising our bilateral visa regime and open some more land borders bet-ween the two countries. There is strong support among Pakistani civil society and businessmen for improving ties with India. There is also the perception that with his pragmatic approach and unprecedented democratic mandate, which is even larger than the one received by A B Vajpayee, Modi can afford to take the calculated risk of initiating an improvement in Indo-Pak ties, while drawing deeper red lines on anti-terrorist concerns. It is important for him to prevent anti-Indian segments in Pakistan from gaining more ground vis-a-vis those who support better ties between the two countries. A gesture in New York has the potential to dramatically alter the scene in the subcontinent. Given his unambiguously stated priority of improving India’s relations in the neighbourhood, i expect Modi to make that gesture and earn gratitude not only from all South Asians but the entire global community that is concerned about the stability and prosperity of South Asia. Author is a Senior Fellow at the Centre for Policy Research. He is also the Director of Pahle India Foundation and his most recent book is Exploding Aspirations.