Indo-US relations at a decisive juncture
Posted on November 24th, 2010

By Philip Fernando, former Deputy Editor, Sunday Observer, Sri Lanka

Indo-US relations are going beyond the basic bilateral interests. They include key joint projects worth several billion dollars amidst China’s colossal global presence. The relations are at a crucial and decisive stage according to most observers. The urgent need for capital inflow into India and job creation in USA was alluded to as the main reason for getting together; what many observers called the attitudinal adjustments following Barrack Obama and Manmohan Singh meeting in Delhi recently.

 One of the major steps agreed under Obama-Singh dialogue was lifting of controls on exports of technology by the US to India – for both military and civil uses. India is likely to spend nearly US $80 billion over the next five years on defence related capital expenditure.

 President Obama announced that US will remove Indian organisations from the so-called entity list, thus permitting greater co-operation in a range of hi-tech sectors like civil space and defence. Indian PM Singh hailed the US decision stating “This is a manifestation of growing trust and confidence of each other.”

 Singh was ebullient about the American commitment to support a permanent seat for India at the UN Security Council. He had projected a need sustain a nine-ten percent growth for India over the next three decades and $ one trillion worth of investment in infrastructure over the next five years.

Two middle roaders

President Obama and Prime Minister Manmohan Singh – obviously better policy wonks than glad-handing politicians – were seemingly savouring the moment, enjoying adulation on the global stage that seemed to have eluded them at home.

Both were considered middle roaders.

Singh’s middle path economics signified tactful avoidance of ideological battles between the free market and Government control of resources akin to Indira Gandhi style volatility in economic policy.

 Singh seemed enamoured by the West’s pragmatism and deep-rooted entrepreneurial optimism about the future that had radiated a certain imitable ethos despite hard times.

Obama, meanwhile is facing an indignant Tea Party in US denouncing the expansion of government activity as socialist usurpation of free entrepreneurial spirit, found Singh’s approach attractive.

 India’s economic competitiveness may have spurred the attitudinal shift, modelled on what United States itself had trail-blazed a century ago. That had ironically gone sour in USA as the sense of entitlement the aging US population insistently clung on to caused pessimism among most Americans facing dire economic prospects.

Personal diplomacy taking hold

Even as general historical responses to China’s growing presence have underpinned Indo-US relationship, the personal bond between Obama and Singh, played a key role.

Obama has called Singh his guru and Singh called Obama “a personal friend and a charismatic leader who has made a deep imprint on world affairs.”

 Observers pointed out that Singh’s relations with the Sri Lankan President also showed the same successful inter-personal diplomacy. Singh’s proficiency surfaced following George W Bush’s overtures to India a few years ago. Obama cemented that trend stating that India and USA were creating the defining partnership of this century.

 The complex Indo-US policy dynamics have veered from warm embrace of pre-independence days to the harsh frostbite of the cold war with India becoming a friend of the USSR and to the less acrimonious give and take of recent years. The shared need to foster capital movement among the two countries and keeping pace with China’s spectacular growth also gained currency.

During Obama’s visit, over 20 deals worth $10 billion were signed between India and US corporations, over and above the defence know-how accessibility mentioned earlier.

 India and USA signed an MoU for cooperation in shale gas technology to exploit its vast avant-garde resource, according to Oil Ministry sources. USA is a pioneer in the field of shale gas, an unconventional gas trapped in sedimentary rocks.

Oil Secretary S Sundareshan said the MoU will help India identify the shale gas resource in the country and frame policy regime for exploitation of the resource.

Weather and crop forecasting

Sundareshan said the main elements of MoU include shale gas resources in India, technical studies to commence on shale gas exploration and training of Indian personnel in the area of shale gas.

 India is targeting the first round of auction of shale gas areas for exploration before the end of 2011. India intends to join a boom in shale-gas exploration that has fuelled more than $39 billion of acquisitions in the US by several companies. “US Geological Survey will carry out studies on shale gas resources and will provide report to India. India and the US are also working jointly on weather and crop forecasting according to Foreign Secretary Nirupama Rao. Leading American agricultural institutes played a key role in fostering green revolution in India in the 1960s.

India is seeking US expertise in medium-range weather forecasting that could play a critical role in enhancing agricultural productivity. Indian universities would participate in this venture.

 Fifty percent of Indian population is involved in some type of agriculture. The two sides have set up three working groups for strategic cooperation in agriculture and food security, food processing, agriculture extension, farm-to-market linkages and weather and crop forecasting. The groups were set up during a recent India-US agriculture dialogue held in New Delhi.

 By signing major trade deals with India US has elevated India as US’s top trading partner. Obama announced “We have agreed to keep reducing trade barriers and resist protectionism.”

Obama famished for jobs in America glibly announced that the purchase of US Cargo planes by India will create 22,000 jobs in America-all politics is local wagged one Indian observer.

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