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15 January 2015, Gateway House

What Modi-Obama can achieve together

During President Obama’s visit to India to attend the Republic Day parade, if he and Prime Minister Modi announce specific agreements related to the two most vibrant components of the relationship—defence and technology—it will pave the way for real progress on the September 2014 US-India joint statement.

Director, Gateway House

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President Barack Obama’s unprecedented second visit to India while in office will also mark the first time an American head of state has attended India’s Republic Day parade as the chief guest.  The visit can take the bilateral relationship to a higher level if India and the U.S. announce one specific and significant decision each in defence and technology—the two most dynamic components of the relationship.

Modi can announce that India will amend its nuclear liability law such that U.S. companies can participate in the building of nuclear power plants in India.  The U.S. must take the remaining Indian companies off the Entity List (EL) of its Export Administration regulations. The companies were put on the EL as part of sanctions—such as denial of technology or of machinery—imposed since India’s 1974 nuclear tests. (In 2011, the U.S. removed the nine remaining space- and defence-related Indian companies from the list, but some, including entities of India’s Department of Atomic Energy, remain.)

Obama has already stated in the joint statement after Modi’s visit to the U.S. in September 2014 that “India meets Missile Technology Control Regime [MTCR] requirements and is ready for membership in the Nuclear Suppliers Group.” Now, the removal of Indian companies from the U.S.’s list will signal to the world that the two countries are real partners.

It will enable both sides to move forward purposefully on elements of the joint statement—such as setting up various bilateral task forces to resolve specific differences, including on the WTO issue, intellectual property rights (IPR), and climate change.

Some of these task forces have already been constituted and have made real progress. For example, following the U.S.-India Trade Policy Forum (TPF) in November 2014 in New Delhi, both countries came to an understanding that eased India’s food security concerns so that the World Trade Organisation’s Trade Facilitation Agreement could be concluded in December 2014.

The first meeting of the Intellectual Property Working Group held in November in New Delhi, as part of the TPF, ended with a joint acknowledgement of the importance of affordable medicines and the benefits of traditional Indian medicine. This could imply a softening of the U.S.’s position on IPR in pharmaceuticals.

India’s environment minister Prakash Javadekar and U.S. envoy for climate change Todd Stern held a meeting on the sidelines of the Lima summit in December. However, the U.S.-China Joint Announcement on Climate Change in Beijing in November 2014 requires the U.S. and China to reduce CO2 emissions by around 30% by 2025 and 2030, respectively—and this is not desirable for the planet or  for India, which will be unfairly pressured to cap its own emissions.

A softening of India’s unwavering position on climate change—that developed nations have a historic responsibility, and all countries must follow the principle of carbon emissions  per capita, not per nation—is expected after Obama’s visit later this month. But Modi must resist U.S. pressure and push for a deal that is in line with former prime minister Manmohan Singh’s 2008 pledge that India will not quantify a cap, but its emissions will “at no point exceed that of developed countries.”

The U.S. also partnered with India for the first time at New Delhi’s annual technology meet—the ‘U.S.-India Technology Summit’—in November. The CEOs of over 20 American tech companies—including Oracle, Microsoft, and Lockheed Martin—also participated in the summit to discuss partnerships, sales, and other collaborations.

At the Vibrant Gujarat Summit—where the U.S. was a partner country for the first time—in Gandhinagar last week , Secretary of State John Kerry led a delegation of American policymakers and representatives from around 90 U.S. companies. The presence of United Nations secretary general Ban Ki Moon and World Bank president Jim Yong Kim at the summit points to a revival of interest in India, marked by the signing of more than 21,000 MOUs (memorandum of understanding) in total, 17,000 of them in the MSME (micro, small and medium enterprises) sector. This could also signal greater interaction and more deals in the future between American and Indian companies.

Defence and technology

In addition to taking Indian companies off the EL list, India and the U.S. must work on other pending issues. The two countries have failed to move forward on defence technology transfers. India snubbed the U.S.’s much-lobbied export of its Javelin missile system in November, in favour of Israel’s Spike missile system with transfer of technology (ToT) provisions. However, Modi and Obama can finalise other technologies from among the 20 items—including launch systems for aircraft carriers and anti-tank missiles—offered by the U.S. under the Defence Trade and Technology Initiative.

The increase in FDI in defence up to 49%, and the signing of an in-principle agreement for the co-production of the Kamov-226T helicopter with ToT provisions between India and Russia, will presumably infuse a sense of urgency among the Americans to move more rapidly on this front.

Nuclear energy

After affirming India’s eligibility for the MTCR—and also supporting its eventual membership in the Nuclear Suppliers Group (NSG), the Wassenaar Arrangement, and the Australia Group—in September, the U.S. must now champion those inductions as well as India’s permanent membership at the UN Security Council.

In particular, Chinese obstructions must be addressed, as former president George W. Bush did when he took the lead in pushing for an NSG waiver for India, in order to sign the India-U.S. Civil Nuclear Agreement.

Obama will have to bring Japan on board with India’s civil nuclear programme, particularly after India and U.S.-ally Australia inked a uranium supply deal of their own in September. That will enable part Japanese-owned American companies like GE-Hitachi and Westinghouse to build nuclear plants in India. With Russia already committing in December to build 12 nuclear power plants in India, the U.S. will have to move quickly.

If India and the U.S. stride forward purposefully on these critical fronts during and after Obama’s visit to New Delhi, the two countries can eventually move beyond the bilateral equation and jointly address global challenges.

Ambassador Neelam Deo is Co-founder and Director of Gateway House. She has been the Indian Ambassador to Denmark and Ivory Coast with concurrent accreditation to several West African countries. 

Karan Pradhan is a Senior Researcher at Gateway House: Indian Council on Global Relations.

This piece originally appeared on Asian Age, here 

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