Obama's India visit may be more style than substance

A weakened US President Barack Obama visits India this week to counter perceptions he has relegated the Asian power behind rivals China and Pakistan, but he may struggle to seal deals to help usher in billions of dollars of business. See special

A weakened US President Barack Obama visits India this week to counter perceptions he has relegated the Asian power behind rivals China and Pakistan, but he may struggle to seal deals to help usher in billions of dollars of business.

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Economic ties are booming but Obama's visit from Saturday to Monday may fail to live up to President Bill Clinton's 2000 trip that helped break the diplomatic ice, or President George W Bush's visit in 2006 when a civil nuclear deal was hailed as a landmark in ties.

Obama's drubbing in the mid-term elections may also tie his political hands when it comes to bold policy moves on India as growing worries emerge that outsourcing in cities such as IT hub Bangalore is worsening mass unemployment in the United States.

It was a sign of the times that Obama told the Press Trust of India that India should open up its markets to US companies, a stance that may dominate a 10-day trip of Asia aimed at boosting US exports and jobs, crucial for his presidency's fate.

"On his upcoming trip, I think that the best India can hope for is a consolidation of the relationship established under President Bush."

An increasingly confident India wants recognition of its global weight. It wants a permanent seat on the UN Security Council and for the United States to allow exports of dual-use technology, banned after India's nuclear tests in 1998.

India's booming trillion-dollar economy is one of the few a stars in a struggling world economy, offering US investors massive opportunities. There are reportedly more than 200 executives accompanying Obama on his visit to Mumbai and Delhi.

On the agenda will be lucrative defence ties. The United States has held more military exercises with India in the past year than any other country, and US firms Boeing and Lockheed Martin Corp are bidding for a $11 billion deal for 126 fighter jets.

No big breakthroughs
A bilateral trade boom has seen total flows treble to $36.5 billion in goods in the decade to 2009-10, but the United States slipped from number one to three in India's trade partners.

India lags China, the United States' third-biggest trading partner.

Washington faces a host of hurdles, including Indian worries that signing defence pacts -- which are necessary for the US arms sales to go through -- may land New Delhi in a wider entanglement with the US military.

The civil nuclear deal with the United States was signed to great fanfare, but it struggled through parliament and now the accord has sparked criticism that US companies in the sector will be discouraged to invest due to high liabilities.

Obama has already played down ending a ban on US exports of dual-use technology, telling the Press Trust of India it was "very difficult and complicated" to meet Indian expectations.

Obama may offer some support for India's place for a permanent seat on the U.N Security Council, but he will likely step short of a full endorsement.

"It will be the opportunity to consolidate all that we have built in the past decade," Foreign Secretary Nirupama Rao was quoted as saying in the Indian Express. "We are not in a stage in our relationship for dramatic breakthroughs and big-bang."

For its part, India will be wary of perceptions it is putting its eggs into one US basket despite Obama's personal ties with Prime Minister Manmohan Singh. Any sign of India's sovereignty being undermined can rally political opposition against Singh.

Singh leads a coalition of fickle regional allies and his Congress Party has had its roots in statist and non-alignment policies since independence in 1947, policy vestiges that still remain among some of its most powerful politicians.

Singh toured east Asia in October before Obama and announced he would be meeting the Chinese premier in India in December.

In the absence of a Doha trade deal, India spread its wing to negotiating trade deals with the likes of the European Union and, in a mark of economic power moving from west to east, the ASEAN bloc of Southeast Asian nations, Japan and Malaysia.

"India will never put all its eggs in one basket, although the US may be the biggest basket of all," said Naresh Chandra, a former Indian envoy to Washington.

India's reluctance to embrace Washington further was perhaps hindered by Obama's first year, when there was a perception his administration was focused more on shoring up a chaotic Pakistan or dealing with China's rise than getting close to the world's largest democracy.

Early campaign talk from Obama that disputed Kashmir should be discussed as part of a wider thrust to bring peace to Afghanistan and Pakistan sparked a storm of criticism in India. He later backed down on the idea.

"Past projects remain incomplete, few new ideas have been embraced by both sides, and the forward momentum that characterised recent cooperation has subsided," the Center for a New American Security said in a report.

"There remains a sense among observers in both countries that this critical relationship is falling short of its promise.

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