The latest episode of the Modi and Obama Show that took place in New York on Monday should be seen as a season finale.
President Barack Obama is just a few months from becoming a lame duck, as his countrymen turn their attention to the next US presidential elections. Obama is now looking at big deals that can give him a place in history. Prime Minister Narendra Modi has plenty of time left in office, so his focus is the immediate. His foreign policy is about beefing up the Indian economy and boosting his social programmes. This mismatch of interests will mean a period of drift in bilateral relations.
The New York meeting saw both merely recap common areas of agreement, in a fuzzy and non-specific way. More noteworthy was that there was little of substance even in the joint statement issued at an economic and strategic dialogue held in Washington DC six days earlier.
Obama sees healthcare, gay rights and climate change as his legacy. Of these, Modi can assist only in the latter. The US president would like to sign an Indo-US climate accord on the lines of the one he signed with China. While climate change is close to Modi’s heart, he is wary of multilateral commitments in that area. A helping foreign hand for his green energy and clean India programmes is all he wants – and that is what he got. The New York meeting saw a few normal platitudes about climate change. The strategic dialogue had a passing mention of the coming Paris climate summit but a lot more about how the US could help Modi’s renewable energy programme.
The inward-looking agenda of the two leaves little space for intense work on the Indo-US strategic relationship, the overarching glue of the two countries. Compared to what they were just two years ago, relations are much more positive. Washington is enthusiastic that New Delhi has a leader who can come through on his promises. And with even China growth figures falling, India is about the only emerging economy that fits the label.
But there are cracks in relations that need attention. Neither leader is doing much about them though ties could stumble on them if they are neglected.
On the geopolitical side, India and the US are on the same page with the Indian Ocean and China. But they are far apart when it comes to AfPak. In New York, the two leaders seem to have avoided saying anything at all on this. The dialogue joint statement mimics the January statement: fulsome on the Indo-Pacific, vague when it comes to Afghanistan. There is little convergence. New Delhi believes Obama, looking for a political quick fix to cover his troop withdrawal, sees a Pakistan-backed Taliban regime as the answer.
On the economic side, differences are widening. The New York meeting seems to have ignored the issue. The dialogue blandly spoke of welcoming “efforts toward the removal of barriers that impact their participation in global supply chains and sustained implementation of trade facilitation measures”. That is no surprise as the differences are most stark with regards to trade policy. Modi has yet to reverse the commerce ministry’s anti-free trade stance. But if he does not, India and the US will eventually discriminate against each other on the trade and investment front – undermining a key pillar of the strategic relationship.
The US is building a new Asia-America trading bloc in the Trans Pacific Partnership that may see fruition in a few months. The TPP is designed to isolate China but it also keeps out any country unwilling to consider radically opening up its market – the Indian policy of the past few years. The path to joining the TPP once it is set up will be long and tortuous. India would have to first complete its bilateral investment treaty with the US. This would pave the way for joining the Asia Pacific Economic Cooperation bloc, itself a precursor to entering the TPP. That none of this seems to be on the agenda, let alone the resumption of the squabble over food subsidies in the WTO, is telling.
This has been a US summit that will do little to change the contours of a strategic relationship that needs repairs. The next opportunity to do so may be when there is a new US president in office – in January 2017. In the meantime, Modi will look to the likes of Mark Zuckerberg and Elon Musk for deliverables from America.