Geopolitical Analysis

By K.N. Pandita

Most heads of the government world over, including Prime Minister Dr. Manmohan Singh, have felicitated President Obama on his re-election. The common factor in these messages is of increasing prospects of bilateral trade with the US under President Obama’s second stint in the White House.

Some of the leaders expect breaking new fields of cooperation. Chinese President Hu speaks of “cooperative partnership”; British Premier David Cameron envisages EU-US trade deal and New Zealand Prime Minister talks of the initiatives like “Trans-Pacific Partnership.” German Chancellor Angela Markel envisions overcoming global economic and financial crisis.  

In his congratulatory message, Indian Prime Minister has also reflected his country’s hopes and views on Obama’s re-election applauding his personal commitment to a “rewarding association to build further on the global strategic partnership that the two nations have built over the last four years.”

How will Indo-US relations shape during Obama’s second tenure? This question will be hotly debated at home and abroad in political circles. It is a dimensional subject, and each component will be treated on its merit. That is how the course of bilateral relationship works between two big countries, both adherents of democratic order.

India did not figure in any detail during presidential campaigns of 2012 when the two contestants dealt with their foreign policy. Why did they keep world’s largest democracy off their radar while fiercely debating crucial foreign policy parameters of respective parities? The only plausible explanation for this deliberate omission can be that India has established herself a strong democracy and strategic ally in the Asian continent. This recognition will become the lodestar in charting bilateral relations during Obama’s next tenure. A reading between the lines of PM’s congratulatory message is sufficient indication that the two nations have assiduously built global strategic partnership during past four years.

Another element contributing to no-mention of India during the election hiatus is growing consensus in Washington that having close ties with New Delhi is vital, both to open a big export market for U.S. goods and to have a strong strategic ally in Asia.

A look in retrospect shows that during his first term, President Obama pegged US’ Indian policy to three components viz. expanding trade, ramping up military cooperation and staying out of the India-Pakistan dispute over Kashmir.

During his first term, Obama increased military and counter-terrorism cooperation with India. U.S. companies completed several large defence deals including the sales of military transport planes, airlifters and long-range maritime reconnaissance aircraft, though American firms were snubbed in the sweepstakes to supply India with a new generation of fighter jets. Washington has been eager to support India as a strategic buffer against China and its ambitions in the Indian Ocean region. This has found reflection only subtly in PM’s message but more pronouncedly in the message of the New Zealand Prime Minister in which he spoke about “Trans-Pacific Partnership.” That’s a trend that’s unlikely to change.

But we cannot miss noting that despite booming bilateral trade, we were under pressure for big-ticket economic reforms that India had been stalling for several years, including the relaxing of foreign investment rules for retail, insurance, and defence. The retail overhaul, an issue that has invited opposition’s ire, was recently enacted by the Indian government, paving the way for the entry of # HYPERLINK “http://online.wsj.com/public/quotes/main.html?type=djn&symbol=WMT” Wal-Mart Stores Inc. # HYPERLINK “http://blogs.wsj.com/public/quotes/main.html?type=djn&symbol=WMT?mod=inlineTicker” WMT-0.23% and others, while a move to liberalize the insurance sector is being considered in Parliament.

Our apprehensions about Obama’s follow through on Indo-US civilian nuclear energy deal didn’t come true The U.S. fulfilled its final commitments. It was India  that raised the issue of producing accident liability regulations that U.S. nuclear equipment firms felt were out of step with international standards and too risky.

There appears no strong political issue to warrant derailing of Indo-US relations in next four years. Kashmir has been bit irritant. After convincing himself of Theo-fascist links of Kashmir insurgents, Obama decided to stick to the line of former President, George Bush that “the U.S. wouldn’t insert itself.”   In future, facilitating a bilateral dialogue between the two Asian neighbours, but without any solid commitment, is likely to remain the parameter of US view on Kashmir issue. This does not mean wrapping up of Track I initiative.

Iran entered Indo-US relationship, almost by stealth, through Iran’s nuclear adventure.  India voted against Iran in IAEA, obviously under US pressure. India’s nearly 16 % crude purchases from Iran dwindled to 10 % after imposition of sanctions on Iran. Yet at the same time, the US still considers Indian intermediary to prevail upon Iranians not to outstretch their nuclear ambitions.

By and large, Indian business community and corporate houses have expressed optimism of growing Indo-US trade, economic and financial ties under Obama’s second term India Inc. has welcomed the Obama re-election, saying it would help further strengthen American economic and strategic partnership with India.

“A historic second term for Obama augurs well for the now established India-US strategic and economic partnership,” said R.V. Kanoria, president, Federation of Indian Chambers of Commerce and Industry (FICCI).

“The strategic partnership has been nursed painstakingly by the Obama administration and we roundly applaud the stellar vision of President Obama in strengthening cooperation in higher education, defence and homeland security, agriculture and nuclear cooperation,” Kanoria said.

Applauding Obama’s re-election, Adi Godrej, president of the Confederation of Indian Industry (CII), said: “Indian industry is hopeful that both countries will continue to strengthen economic ties by lowering barriers to trade and investment, and fostering a climate that is conducive to the growth of businesses on both sides.” Anand Mahindra, chairman of Mahindra and Mahindra, said in the second term Obama would strive to build a real legacy, keeping aside politics. “The second term of a US president is the more fascinating one. With politicking out of the way, it’s time to build the real legacy,” Mahindra said on Twitter.

But notwithstanding these encouraging symptoms, there is a specific area that could rub up good bilateral relationship the wrong way. Will Barack Obama take a less

During the re-election campaign, Obama had stepped up his rhetoric against industries that move jobs out of America.  His administration has been criticised by outsourcing industry bodies in India for tightening visa rules.

“Not the best news for India or the IT outsourcing industry,” Phaneesh Murthy, chief executive officer of iGate Corp, said in response to Obama’s victory. India had criticised Obama administration for a hike in visa charges for companies that have the majority of their employees overseas as “highly discriminatory” and detrimental to the profitability of Indian IT companies.

India’s $100 billion IT services sector has seen a sharp slowdown in growth in recent quarters as Western clients hold back on spending. Europe and the United States account for around three-quarters of the industry’s revenues. Nevertheless, India’s outsourcing chiefs are hopeful that in his second stint in the office, President Obama will do right things.

In conclusion, we should be clear that countries essentially work for national interests. That is true of any party coming to power. India has to continue to be cooperative and resilient, resolve bottlenecks through sustained negotiations and never lose sight of international peace as the ultimate goal of a level-headed state.
(The writer is the former Director of Centre of Central Asian Studies, Kashmir University).