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A Closer U.S.-India Embrace

Author: Jayshree Bajoria
November 8, 2010


President Barack Obama wrapped up his three-day visit to India with agreements worth $10 billion in U.S. exports, expected to generate over fifty-three thousand U.S. jobs. He also pleased New Delhi by backing India's long-standing ambition (BBC) for a permanent seat on the UN Security Council. In a speech to the joint session of the Indian parliament, he stressed: "India is not simply emerging; India has emerged."

High on Obama's agenda was the effort to increase U.S. exports to India. Despite such growing economic ties between the two countries, several obstacles (ForeignPolicy) to trade and investment remain. Obama answered a longstanding Indian demand by eliminating one of those obstacles: He announced relaxed export controls (FT) to India for sensitive technology and removed India's defense and space-related organizations from the U.S. Entity List.

He also tried to allay the concerns of Indian businesses on outsourcing. "There still exists a caricature of India as a land of call centers and back-offices that cost American jobs," he said, "but these old stereotypes, these old concerns, ignore today's realities" (Hindu Business Line). Bangalore-based entrepreneur Narayan Ramachandran recommends the United States should concentrate on jobs in which it has a comparative advantage (Livemint), such as nuclear technology, avionics, aircraft manufacturing, and clean technology.

While the two governments seem eager to build their alliance, they differ on issues from climate change to an international trade regime. But the biggest challenge to the relationship, says CFR's Adjunct Senior Fellow Evan Feigenbaum, is disagreement over Obama's policies toward Afghanistan and Pakistan. Indian expert C. Raja Mohan writes on that the challenge for India is to get the "United States to pressure the Pakistani army to end its promotion of extremism in Afghanistan and India." While in Mumbai, Obama conceded Pakistan's progress on countering terrorism was slower than desired and stressed that any peace between India and Pakistan would be a result of their bilateral efforts. The United States "cannot impose a solution to these problems" (AP), Obama said. Indian Prime Minister Manmohan Singh ruled out any productive engagement with Islamabad as long as Pakistan's "terror machine is as active as ever before."

Obama called the U.S.-India relationship a "defining partnership of the twenty-first century" and encouraged New Delhi's greater role in global affairs. However, he also urged India to play a more responsible role in issues like Iran's nuclear program and pushing for democratic reforms in Myanmar. A "premature power" (YaleGlobal) like India, writes former Indian Foreign Secretary Shyam Saran, faces the challenge to ensure "its role as a global actor does not undermine its ability to deliver the basic development needs of millions of its citizens" which often puts it in conflict with developed economies like the United States. In the face of continued differences in multilateral settings, one way forward, writes CFR's Feigenbaum, could be a focus on innovative bilateral initiatives (BusinessStandard) in areas like energy, trade, and cooperation on maritime security and cybersecurity.

Additional Analysis:

Seven experts offer lessons on what Obama can learn from India in terms of economic competitiveness in the New York Times' Room for Debate blog.

A new report on U.S.-India relations from the Center for a New American Security recommends Washington give concrete meaning to the phrase "strategic partnership" by strengthening collaboration in a number of areas, including counterterrorism, regional security, and promoting democracy and human rights.

George Perkovich of the Carnegie Endowment for International Peace argues U.S. policy cannot do much to help India's rise, but can inflict damage on global problem-solving efforts if it defers too readily to the narrow, often mercantile demands of the current relationship.


U.S. Treasury Secretary Timothy Geithner outlines how the two countries can increase trade and economic cooperation (HindustanTimes) that can contribute to more sustainable global growth.

India's Foreign Secretary Nirupama Rao outlines three basic organizing principles (Outlook) for a sustained and strong long-term strategic partnership with the United States.