Barely four months after Indian prime minister Narendra Modi held a summit meeting with U.S. president Barack Obama during a five-day visit to the United States, the two leaders will meet again, this time in New Delhi. The September 2014 meeting was largely interpreted as a success, with collaborations announced in economic growth, energy and climate change, defense, and science and technology cooperation. With a second meeting coming so soon after the previous one, how can the two sides move the relationship forward? What areas are most likely to take priority? And what signals should one look out for?
NBR has been closely following the progress of the India-U.S. relationship by seeking out analysis from long-time India watchers. As part of this series, NBR interviewed Alyssa Ayres, senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relations, who served as U.S. deputy assistant secretary of state for South Asia from 2010 through 2013. In this interview, Dr. Ayres offers insights on the major issues under discussion, explains what the introduction of new key personnel in the Obama administration means for the relationship, and considers how the two partners may proceed as the security environment rapidly evolves in South Asia.
President Obama’s trip to India in January is high on symbolism. Not only will it mark the first time that a U.S. president visits India during both his terms; it will also mark the first time a U.S. president attends Republic Day celebrations as guest of honor. But beyond the symbolism, what is this visit about?
The areas of cooperation that the White House delineated in the joint statement after Prime Minister Modi’s visit to Washington in September 2014 provide a pretty good guidepost for what we can expect to happen in terms of announcements, further cooperation, and signals. First, it hasn’t been too long since the two leaders have had a summit. The invitation to attend Republic Day is wonderful, but it comes just four months after their Washington meeting, so there just hasn’t been that much time during which staff on both sides would have been developing new initiatives. Announcements of “deliverables” will probably showcase continuity with the priorities emphasized on September 30. The way the joint statement from the September 2014 meeting is ordered, the first issue is economic growth and the second is energy and climate change. Those are the areas where I would expect to see some more announcements. It has been a long-standing goal of the Obama administration to increase U.S.-India trade fivefold from $100 billion to $500 billion, so there could be steps toward implementing this vision. One area where we might hear more could be the infrastructure platform that the Department of Commerce has put in place corresponding to the Indian government’s interest in infrastructure development; the talent and skills of U.S. companies could be helpful—the platform is about finding a way for them to know about the opportunities out there.
Clean energy and climate change was the area where we saw a big announcement in September of a billion dollar financing line that the U.S. Export-Import Bank would make available in collaboration with the Indian Renewable Energy Development Agency. I would look at clean energy research and collaboration as very successful examples of India-U.S. cooperation in the last couple of years. It would be terrific if India manages to do more on climate change with the United States, within the multilateral framework, but Indian officials have been consistent in noting their country’s need for growth and their low per capita emissions even in the medium term. That’s why I think an emissions-focused agreement with targets is less likely, and that’s also why U.S.-India cooperation on these issues has been more focused on developing new technologies and efficiencies in the field of clean energy
There could also be more cooperation in water and sanitation like the new Water, Sanitation, and Hygiene (WASH) alliance announced in September 2014 that will be serving as a knowledge partner to help private and civil society groups in India focusing on the national urban development mission. We might also keep our eyes open for announcements in defense cooperation, whether something in defense trade—under the Defense Trade and Technology Initiative (DTTI)—or possible further progress toward renewing the 2005 new framework agreement on defense cooperation.
In recent times, India and the United States have made progress on important issues through sustained exchanges at higher levels, including the November 2014 breakthrough on implementation of the WTO Trade Facilitation Agreement (TFA). However, there are other issues of divergence, such as civil nuclear liability law, climate issues, and visa concerns, to name a few. Is any concrete progress on these or any other issues likely during President Obama’s visit?
India’s decision not to ratify the TFA in July, before finally reaching an agreement in November, has been a very difficult issue for the United States. I believe a bit of baggage from the incident still continues. India’s backing out is a bruise on that aspect of trade relations that is hurting India’s ability to aim for a more ambitious trade target with the United States—for example, looking down the line at the Trans-Pacific Partnership or the possibility of negotiating a bilateral free trade agreement (FTA). Right now, people are still looking back at that process of the TFA and not understanding where India is on a lot of these very thorny trade questions, so it is probably better to just wait a while. The civil nuclear liability law will probably not be front and center, though obviously it is an issue of concern, as it has been for some years to the United States. It does seem, however, that there is a new appreciation in India of some of the ways in which the law creates problems for Indian companies, too, so we will have to see how this unfolds domestically. There have been a series of meetings between the contact group that was set up bilaterally to see how the U.S. and India could operationalize the commercial part of U.S.-India civil nuclear collaboration. We haven’t seen anything announced so far—perhaps something will be announced during Obama’s visit.
Like many other tough problems, a lot of the visa issues that India has flagged are caught up in comprehensive immigration reform in the United States and are not India-specific, one-off matters. They are broader issues that have to do with the United States’ immigration laws and way we handle visas. In fact it is actually a better story than people recognize. There has been a lot of attention to the movement of high-skilled persons (H1B or L category visas). However, if you look at the data on this, India accounts for the great majority of foreign nationals who receive these U.S. work visas—almost 64%. The next closest country is China, at 8%. For changes on this, we will have to see what happens in the U.S. Congress. There are a couple of issues that India would like to see movement on that really depend on congressional action; immigration reform is one such issue.
The other issue that is important to India and many other U.S. partners is access to liquefied natural gas (LNG). Because of the way U.S. legislation covers LNG exports, case-by-case permission is needed for countries that are not FTA partners. This issue comes up a lot, with different people recommending that Congress revise the law so that the U.S. system is more flexible. Other countries like Japan or Ukraine have been caught in this situation. India might see movement on these issues—not specifically related to India but as part of a broader agenda of the new Congress.
How do you perceive the new Congress, with a Republican majority and a new configuration, will be inclined toward India?
The biggest change we are going to see will be in the Senate, as that is where all the committees will be changing leadership. There is some good news—Senator John McCain will be more empowered (as chairman of the Armed Services Committee). He is a big proponent of deepening U.S.-India ties; I think you will see him be more vocal about the U.S.-India relationship. Trade in general will possibly be on better footing because this is one area where the new Congress might look to cooperate with the White House. However, we have seen some members—for example, Senator Orrin Hatch, who will assume chairmanship of the Senate Finance Committee—who have been focused on unfair trade practices in India, so there might be some tension on that front. Intellectual property rights is an issue that will come up to some extent. The Senate Foreign Relations Committee might see a shift that will potentially benefit India, as we see the likelihood of members looking to reassess the relationship with Pakistan. That is an issue India has publicly raised with the United States. On the Committee on Energy and Natural Resources, Senator Lisa Murkowski has previously advocated reworking the way we do natural gas exports, so I would anticipate a broader review of that process, which would certainly benefit India. I am less certain about how the shift to Republican control in the Senate will work for India on some immigration questions. We will have to wait and see how this unfolds.
President Obama’s new choice for secretary of defense, Ashton Carter, played a crucial role in cementing the defense relationship with India by spearheading the DTTI as deputy secretary. Where do you see the U.S.-India defense relationship going under the next secretary of defense?
While the DTTI really helped reshape defense cooperation with India, there hasn’t been any collaboration announced under it. Hopefully something will be agreed upon in the coming year, which will start moving the process along. Dr. Carter is perfectly positioned to do more with India. He knows how the Pentagon runs inside and out, how the acquisitions process works, and how our technology transfer process works. He has been a big proponent of expanding the U.S.-India relationship, and he will be perfectly positioned to take leadership on fleshing out collaboration under the DTTI.
President Obama has limited foreign policy options at his disposal to deal with crises arising in various parts of the world. Do you see him having sufficient bandwidth for South Asia, and India specifically, during the rest of his term?
I can’t speak for the rest of the term, but it certainly does seem that there has been quite a lot of attention on South Asia throughout 2014, not just by the White House but by all members of the administration. After Prime Minister Modi’s victory, there was immediate outreach by President Obama, who sent three cabinet members (John Kerry, Penny Pritzker, and Chuck Hagel) to India over the summer in preparation for the September summit. It is very unusual for the U.S. president to invite a foreign leader to visit on the margins of the UN General Assembly—it almost never happens—and that invitation led to a very successful summit. There has been a lot of mindspace focused on postelection India and in getting to know the new prime minister. After the summit, there was rejuvenated bilateral cooperation with the India-U.S. Science and Technology Summit as well as a meeting of the cabinet-level trade policy forum, the first in four years. Having these meetings is very positive. It is almost unheard of to have leader-level meetings within six months of each other.
With impending geopolitical adjustments in the region, such as the drawdown in Afghanistan, India has questioned the United States’ stance toward Pakistan, which has failed to address terrorist activity emanating from its soil. It has even failed to prosecute those responsible for the 2008 Mumbai attacks that led to the loss of American lives. Strategically, where does Pakistan figure in this administration’s foreign policy?
There are some divergences between India and the United States on how to handle Pakistan, though not necessarily divergences in the way people perceive the nature of the challenges. Pakistan has been a partner and remains a partner for the United States, especially now with the drawdown in Afghanistan. I know that people in India are very concerned about regional stability in the coming years and will remain concerned. At the same time, I do not think that the India-U.S. relationship is limited by the United States’ and India’s different relationships with Pakistan. In many ways, both the United States and India are working on a much bigger scale looking at the entirety of the Asia-Pacific and the full spectrum of global issues. I certainly would not consider the U.S.-India relationship one boxed in by what happens in the U.S.-Pakistan relationship.
For example, India and the United States just finished another round of trilateral consultation with Japan; that specific consultation is going to be upgraded to the ministerial level. This is a big deal. The United States and India are starting to look at where the collaboration will be effective, including on regional and environmental issues. The two countries discuss a wide range of issues spanning the Indian Ocean, the Asia-Pacific, and a host of international organizations. I would hate for there to be an impression that there are some difficult constraints placed on U.S.-India cooperation because of Pakistan. I just don’t think that is the case.
Further exploring the idea of dehyphenation of India and Pakistan, relations between the two neighbors have deteriorated over the last few months. What kind of developments in South Asia would the United States consider to be alarming, and what role might it play in such situations? Is there a likelihood that the Obama administration might move in a direction with Pakistan that will satisfy India?
We have seen a lot of movements from the U.S. administration to indicate to Pakistan Washington’s dissatisfaction with the problem of terrorism and Pakistan’s inability to control some of these terrorist groups. I know that these movements have not been sufficient in India’s view, and I would anticipate that the United States would continue to privately place pressure on Pakistan since these groups are harmful to U.S. interests as well. For example, it is a terrible tragedy that the trials in Pakistan for the 2008 Mumbai attacks, in which six Americans were killed, have not advanced after all these years. The United States has stakes in these questions too and sees many of these issues in the same way as India does. The question is what is the most effective way to try to promote that change in Pakistan, and I have to say, I don’t think anybody has discovered the solution to that problem yet, including Pakistan.
This article appeared on the NBR website on January 19, 2015.