Much hype and hoopla, but can Narendra Modi pave way for future dividends in America?

  • Pramit Pal Chaudhuri, Hindustan Times
  • Updated: Sep 26, 2014 13:59 IST

When environment minister Prakash Javadekar announced that New Delhi had rejected an American green deal — access to renewable energy technology in return for an agreement to phase out climate-changing hydrofluorocarbons (HFC) — he may have killed United States President Barack Obama’s number one interest in the coming India-US summit.

That an obscure HFC agreement should loom so large in the bilateral relations of the world’s two largest democracies is a metaphor for how thin the substance of India-US ties has become.

Read: Indian diaspora organising 'monumental' reception for Modi

The primary blame lies on the combination of a dysfunctional Manmohan Singh government and the quid pro quo mindset of the Obama administration. But Prime Minister Narendra Modi’s week-long stay in the US is unlikely to transform the diplomatic landscape. The real hope lies in the seeds that Modi can plant in Washington today — and reap years hence.

Watch:Modi arrives in Frankfurt en route to the US

There is a lot less commonality between the worldviews of the two leaders than is comfortable. Like two separate jigsaw puzzle sets, the Modi and Obama pieces don’t fit together well.

For example, the geopolitical basis of the relationship remains parlous.

Obama continues to believe in a post-US withdrawal Afghanistan that goes via Islamabad. Thus the Indian establishment believes strongly that Washington’s manoeuvring lies behind the failure of Abdullah Abdullah to win the recent Afghan presidential elections. India can’t decide what exactly is Obama’s policy towards China. The embrace of the G-2 became the ‘pivot to Asia’. But the pivot remains intangible and the sense that the US cannot be trusted when it comes to China is widespread.

The George W Bush administration deliberately sought to hold institutional conversations with India on all kinds of regional developments. Obama has allowed most of these to dry up. The White House press note on the Modi visit said that the two leaders “will also focus on regional issues, including current developments in Afghanistan, Syria and Iraq” and consider how “India and the United States can work together with partners.” Between the lines: New Delhi and Washington have had no substantial communications on any of these issues for years.

It’s not as if Obama doesn’t have international security problems aplenty. There’s a lot of turmoil in West Asia. There is Ukraine and Russia. The list goes on. The fact is Washington doesn’t think New Delhi has much to contribute. India, on the other hand, has reverted to its traditional sniping at US action or inaction without offering any constructive solution. Obama’s people have said that these problems have distracted them from the Modi visit — indicating they don’t see a connect between the two.

The economics of the relationship will now largely be about Modi winning the confidence of corporate America. He will argue that he will transform the business environment of India in the next two years — and they should have their investment plans ready for that moment.

What is striking is how little the US fits in with Modi’s long-term economic vision of a massive infrastructure splurge that will, in turn, allow India to erect the sort of competitive manufacturing sector that it lacks today. Among other things, Washington cannot provide the sort of state-channelled financing that a Japan, China or even South Korea can for India’s infrastructure boom. As Ashley Tellis of the Carnegie Endowment has noted, “The ability of the US to serve today as an official source of capital for India’s development is highly limited.” The US doesn’t even manufacture that much: Apple’s brain may be in San Francisco, but its muscles are in Shenzhen. And, no, shale gas hasn’t changed things that much.

India’s economic engagement with the US remains, by far, its largest with any single nation when one considers the whole spectrum of activities from remittances to capital flows to technology. Preserving and expanding this indispensable relationship should be Modi’s priority.

This will require slowly reconstructing India’s relations with various power centres in Washington, including the US Congress and the Wall Street. Thus Modi may complain that planned US immigration reforms will kneecap India’s software firms, but that depends on the US Congress not Obama. And India has frittered away much of the political capital it once had with that Capitol Hill. A lot of the anti-Indian trade action by Washington has been driven by US firms like IBM, Microsoft and Pfizer infuriated by various populist or protectionist Indian policies.

Says retired US diplomat Teresita Schaffer, “The real point is that India needs to reinvest in the US. The US also needs to reinvest in India. From the US perspective, the deliverables for us are a second order thing.”

However, Modi may not feel like investing too much in Obama. By November, the US president will probably see both houses of Congress slip into the hands of a hostile Republican Party. The US presidential campaign will effectively kick-off next spring. “India should begin investing in the next president,” admitted a representative of the US pharmaceutical lobby, rated the most powerful commercial interest group on Capitol Hill.

Though they will both be all smiles at the Rose Garden, the two leaders will struggle to find common ground. Obama and Modi are both exceedingly focused on their domestic agendas. The US president believes his legacy will be healthcare, gay rights and climate change. India only overlaps on the last issue.

There was a frisson of excitement in the White House when Modi was elected — and it was discovered he had written a book on climate change and publicly said “I have a special interest in climate change.” The US system began holding endless high-powered inter-agency meetings on this topic alone.

The HFC agreement was seen as a doable climate change initiative in a short timeframe. But Modi failed to take the bait. The Indian leader’s foreign policy vision is so far lacking in any sense of constructive multilateralism. Modi speaks of an ‘Indian way’ of handling climate change which, it seems, is largely confined to things within national borders. Ironically, this is a mirror image of Obama’s isolationist sentiments. And the combination means a visit that will be about Modi selling a future India to Americans but offering little in the present for America’s leader.

Also read:America our natural global partner, says Modi as he heads to US

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