Wednesday, November 03, 2010

Obama in India: What to look for

Analysis: Can Obama's "breadth and depth" jump-start stagnating US-India relations?

NEW DELHI, India — U.S. President Barack Obama arrives in India on Saturday with a difficult mission.

With no "big ticket" pact in the works, fading popularity at home and suspicions in India about American military aid to Pakistan, he needs to reassure New Delhi that the burgeoning alliance begun by his predecessor is truly becoming a bona fide strategic partnership.

The bottom line: There's very little chance Indians won't be disappointed with the outcome.

"If you look closely at what the background briefings are from the Indian side and what is being said not only in Washington but by the U.S. ambassador here, one gets the sense that nothing dramatic is likely to emerge from the visit," said former foreign secretary Kanwal Sibal.

Indeed, at a press briefing to outline the broad agenda for the visit, senior U.S. officials encouraged observers to focus on the big picture, rather than big agreements.

"The president's itinerary in India will highlight the growth, strength and breadth of the U.S.-India partnership and highlight the diversity and cultural vibrancy of India," a senior U.S. official said. "We believe the next big thing is taking this relationship from one focused on the civil nuke deal to one that's deeper and broader, and that rests on a full range of strategic areas of cooperation."

That means that the U.S. president will likely focus on India's potential to create U.S. jobs — simultaneously hitting the right notes at home and assuaging Indian fears about the protectionist tenor in recent U.S. statements and legislation regarding outsourcing. Obama will also emphasize that the U.S. recognizes India as a global power — reflected in more than 50 joint military exercises over the past eight years.

But the fact that the visit hinges on a combination of intangibles, closed-door discussions and a series of small steps forward ensures that the devil will be in the details.

"Mr. Obama and this administration are very good [people], full of nice sounding words, a lot of euphemisms," said Rajiv Sikri, a career Indian diplomat. "But I get the feeling that the Indian side is fairly hard-nosed, and will not be taken in. It's really action on the ground, and what the U.S. policies do to India's security and economic interests that will be the touchstone of how successful this visit is."

What India wants

In the wake of an announcement of more U.S. military aid for Pakistan and revelations that American intelligence may have withheld crucial information about the November 2008 terrorist attacks on Mumbai from their Indian counterparts, India wants assurance that the U.S. is coming closer to the Indian view that Pakistan is at the heart of the world's problems with terrorism.

While that won't be forthcoming, Obama's first address, at Mumbai's Taj Palace Hotel, will set the right tone, and the recent U.S. announcement of a director of national intelligence review of the Headley affair suggests that the U.S. intends to put more muscle behind cooperations on counterterrorism.

Perhaps more importantly, closed-door talks between Obama and Singh on Nov. 7 and 8 will likely flesh out the potential outcomes of the drawdown of U.S. forces in Afghanistan next year.

But symbolic gestures and closed-door assurances aside, India has concrete demands that Obama will be hard-pressed to satisfy. The two big items at the top of India's wish list are a clear statement backing India's bid for a permanent seat on the United Nations Security Council, and some kind of official recognition of its territorial sovereignty — an oblique reference to its border disputes with China and Pakistan. Obama will probably steer clear of the border issues, experts say. And while the U.N. Security Council seat may find its way into one of Obama's speeches, the expectation is that the U.S. president's formulation will be too weak to fulfill India's hopes.

"If this was said after due deliberation, with full knowledge of the implications, a lot of discerning people would see that as a major change in how the U.S. is beginning to look at India after the nuclear deal," said Sibal.

The carefully worded statements of U.S. officials aren't promising. In a meeting with reporters to outline Obama's schedule, for instance, U.S. Undersecretary of State William Burns would say only, "Given India’s rise and its significance, we believe that India will be a central part of any consideration of a reformed Security Council," continuing America's "natural candidate" line, which clearly stops short of pushing for immediate reform.

What the U.S. wants

America's ambitions for Obama's visit are smaller, perhaps, but would send clear signals that the economic and strategic relationship between the U.S. and India is growing closer. As a big win, the U.S. is still pushing for a revision of India's nuclear liability laws, which the U.S. nuclear lobby argues have robbed the 2008 Indo-U.S. civilian nuclear agreement of its significance by creating a business advantage for the state-owned nuclear firms of Russia and France.

To provide a much-needed boost for the American economy, the U.S. would also like to see India further loosen restrictions on foreign investment in multi-brand retail for stores like Walmart and finalize billions of dollars in defense contracts that would reportedly create tens of thousands of U.S. jobs. But here, too, little progress is expected.

Though India signed the Convention on Supplementary Compensation for Nuclear Damage (CSC) in October, its own Civil Liability for Nuclear Damages Act remains in force. Moreover, with its failure to win compensation for victims of the 1984 Bhopal gas tragedy from Union Carbide as the backdrop for the negotiations, India appears both unwilling and politically unable to water down the 2010 law. As minister of state for science and technology, Prithviraj Chavan, told a gathering of reporters at the Founder’s Day celebration of India's Bhabha Atomic Research Center, “We won’t accept any conditions and agreements will be on our terms."

For the other items on the U.S. wish list, there's optimism on the question of if, but doubts regarding the question of when. Recently, India's commerce minister said the 51 percent cap on foreign direct investment in single-brand retail (e.g. the Nike store) could soon be eliminated, but said that a "consultative process" would be required before the ban on investment in multi-brand stores could be raised to an investment limit of 51 percent.

And while Obama is expected to conclude a $3.5 billion deal to buy 10 C-17 transport aircraft from Boeing, no decision is expected on an $11 billion tender for multi-role fighter jets — for which America's Lockheed Martin and Boeing are competing with European, Russian and Israeli manufacturers.

Wiggle room

Nevertheless, with some $50 billion in bilateral trade — and a broad trade balance — both the U.S. and India have strong economic incentives to ensure that Obama's visit is a success. As a result, both governments have worked hard to develop a set of "deliverables" where they believe there's a good chance to demonstrate tangible progress. These items include relatively anodyne projects in the areas of alternative energy and agriculture. But there could also be some wiggle room on defense moves that would provide clearer signals of a developing strategic partnership.

India is pushing for the U.S. to remove its space agency and defense research organization from the Bureau of Industry and Security "Entity List" that restricts them from purchasing so-called "dual use" technologies with potential nuclear applications, while the U.S. is pushing for India to sign several agreements that it says would facilitate better military cooperation.

Progress on neither is guaranteed, but both moves would mark significant steps forward. The removal of export controls — which were put in place after India tested its nuclear bomb in 1998 — would bring India a step closer to the acknowledgement as a legitimate nuclear weapons state that was the implicit promise of the Indo-U.S. nuclear pact.

Meanwhile, India's signing of America's three arcane defense pacts — the communications interoperability and security memorandum of agreement (CISMOA), the basic exchange and cooperation agreement for geo-spatial cooperation (BECA) and the logistical support agreement (LSA) — would demonstrate that the political and defense establishments in New Delhi no longer fear sacrificing neutrality if it means gaining a broader role in geopolitical affairs.

So far, the U.S. appears closer to removing export controls than India is to signing the defense agreements.

This August, Obama announced a general easing of restrictions on exports of products with potential military applications. And in praising India for signing the CSC, U.S. Undersecretary Burns expressed guarded optimism about the Entity List, saying, "We’re also making progress on cooperation in space and updating export controls to reflect the reality of a 21st century partnership in which India is treated as a partner and not as a target."

In contrast, Indian Defense Minister A.K. Antony reportedly told U.S. Defense Secretary Robert Gates point blank at an October meeting in Washington that India would not sign the three "enabling" defense agreements during Obama's visit. Though the U.S. conducts more military exercises with India than with any other country, Indian defense officials maintain that the unsigned agreements do not pose a major impediment to the cooperation, and political concerns make signing the deals difficult.

"The implication of that [reluctance to sign the pacts] is that India should not be seen in too warm an embrace with the United States," said former Air Vice Marshal Kapil Kak, referring to the desire in some quarters to adhere to the Cold War policies written when India was a leader of the Non-Aligned Movement. "[But] if India wants to exercise greater responsibility and influence and larger strategic and security capacities in the broader neighborhood, then India will have to take specific stances in situations."

The trick for Obama will be to connect enough dots to create the big picture he needs to convince the remaining naysayers in India.

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