Obama in Delhi to seek greater access to Indian markets
January 25, 2015, 6:23 am

Indian Prime Minister Narendra Modi gives a warm welcome to US President Barack Obama on 25 January in New Delhi [Image: MEA, India/Twitter]

Obama, during his second state visit to the Asian giant, will hold talks with his Indian counterpart Pranab Mukherjee and the Indian Prime Minister Narendra Modi on a diverse range of topics including cyber-security, anti-terrorism, climate change, the barriers to nuclear trade, regional security, H1B employment visas for Indian workers.

Breaking protocol, Indian Prime Minister Modi greeted the US President at the airport in New Delhi on Sunday morning.

India’s total trade with the US currently stands at about $100 billion. However, China has replaced the US as India’s largest trading partner.

Obama will also hold a summit with US and Indian business leaders in the Indian capital. Earlier on Saturday, the US President announced he will shorten his trip to India, cancelling his plans to visit the iconic Taj Mahal on Tuesday, some 250 kms from the national capital and divert to Saudi Arabia to pay respects after the death of King Abdullah.

The two sides are expected to renew a defence partnership agreement for another 10 years. Preparations have been made for Obama and Modi to also eke out a cyber-security and an anti-terror cooperation agreement.

The Indian Prime Minister faces strong challenges, including an uphill task of easing trade spats with America ranging from protectionism to patent rights.

US trade representative Michael Froman has last year urged India to dismantle its “wall of protectionism”, strengthen its intellectual property rights (IPR) regime and focus on improving the business environment.

The US in October launched an out-of-cycle review of India’s IPR regime. The US has often blamed India alleging it is a regular offender of global IPR laws.

The US Chamber of Commerce and 15 other US business associations have also, in September, complained about barriers to free trade put in by the Indian government. The Chamber is the biggest lobbying group for US business.

Restrictive Indian trade policies have delayed American export and investment to India, a USITC report said last month.

“US exports to and investment in India would be significantly higher if not for Indian policy barriers,” the US International Trade Commission (USITC) said in its report.

Meanwhile, during his State of the Union address last week, Obama’s primary focus was on attempts to “bring jobs home” to the US that have been lost to cheaper manufacturing hubs abroad, in an unwelcome reference to India. India’s software-export industry relies on an army of workers to service clients in the US, its biggest market.

Obama will be the first US President to attend the January 26 Republic Day parade in New Delhi. Russian President Vladimir Putin and former French President Nicolas Sarkozy have attended the event in the past.

Meanwhile, Indian media reports quoting Indian government officials suggest there has been some progress in sorting a logjam over the India-US nuclear deal signed in 2008 that had been stalled over the tough provisions in India’s Civil Nuclear Liability Act.

New Delhi is scrambling to respond to concerns of US companies over the tough law.

Ahead of Obama’s visit India had offered to set up an insurance pool to indemnify global nuclear suppliers against liability in the case of a nuclear accident.

Under a 2010 nuclear liability law, nuclear equipment suppliers are liable for damages from an accident in India.

The revised proposal of an “insurance pool”, however, has been rejected during the tenure of the previous government in India. The US side has also sought “clarification of Section 46” of the law that appears to allow Indian victims to sue operator or supplier for fault-liability.

Washington is also keen to reinforce the bond between the two “major democracies” even as it seeks India’s support to it’s much hyped Asia-Pivot policy, widely seen as a bid to contain a rising China. Obama had hoped his foreign policy “pivot” toward Asia would shift US government attention away from trouble spots like Afghanistan and Iraq and toward a region brimming with economic opportunities.

US President Barack Obama said on Tuesday that China poses a threat to America’s mantle of economic leadership.

In his State of the Union address on Tuesday, Obama said China must not be allowed to write trade rules for Asia. Obama was referring to China’s regional FTA talks, the RCEP, as well as the mammoth China-backed Asia-Pacific FTA negotiations that was launched in November last year at the APEC summit.

India has joined the RCEP trade talks and the China-led Asian Infrastructure Bank launched last year.

“But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair,” said Obama.

TBP