By Payal Mitra

Edited by Liz Maria Kuriakose, Associate Editor, The Indian Economist

In the past few years, with the rupee in freefall, major Indian pharmaceutical companies being busted by American agencies, diplomatic disasters in the form of Khobragade, condemnation of outsourcing to India, and major restrictions put in place on Indian business in US, a lot of mending is to be done. And now all eyes are set on Mr. Modi, who promises to revamp the government with his decisive leadership. Apart from the mountain of expectations and challenges facing the forthcoming duration of his tenure, a crucial job will be to improve India’s global standing and foreign relations. The upcoming US invitation to Mr. Modi, after just a week into the government was eagerly awaited nationwide. Burying the past hatchet, Mr. Modi, with his business friendly attitude, and hopefully a cooperative US government, could greatly help reinvigorate Indo-US ties.

Here is a basic five point agenda of the crucial issues that should be addressed at the meet:

  • Trade: It is crucial to ensure a healthy mutually beneficial trade relationship. US exports to India have increased by 491% since 2000. So it is of utmost necessity that the US softens their stand on outsourcing and also removes some of the heavy restrictions imposed on Indian companies in the US in terms of a cap on the number of permitted H1B visas and increased tariffs levied on these MNCs for every foreign national hired.

The recent move by three workers’ groups urging American citizens to boycott companies like Infosys on account of them not hiring enough locals, must be addressed and resolved immediately to make India more job-secure.

Apart from this, increased opportunity for Indian investment in the US, and an increased limit on FDI in various sectors in the Indian economy like e-commerce, retail, insurance, and so on could be advantageous to both nations.

  • Defence: Though this sector needs a strong domestic footing to compete with the military sophistication and self-reliance of other chief nations, it is a fact that India is not in a position to serve its military interests on its own. It still needs to outsource military equipment and arms from other leading powers in this field. According to the Pentagon, the official annual defence budget of China in the year 2013 was $119.5 billion against India’s $39.2 billion. So in order to establish its global position and maintain peace in the region, India must necessarily match up to its neighbours. The US too, would find this relationship beneficiary as India is one of the largest importers of defence technology. Step one in this direction will be to reinvigorate the Defence Trade and Technology Initiative (DTTI) between the Office of the Secretary of Defence and the Indian National Security Advisor. Launched in 2012, the DTTI is aimed at breaking down barriers between the two countries’ defence bureaucracies and enhancing defence trade and technology exchange. Last fall, the Former Deputy Secretary of Defence Ash Carter made progress with the initiative, especially during a visit to India. The Obama administration is said to be keen for co-development of defence goods and technology, and not simply as a buyer-seller relationship. The US has signed billions in defence contracts with India over the past few years, but still lags behind Russia, another defence supplier to India. The US should attempt to help facilitate India’s defence modernisation and enable American companies to pursue partnerships that support India’s interest in developing its domestic defence production sector. The Indian willingness to adhere to US technology protection agreements will be critical in moving the Indo–US defence relationship forward. Also, the 2005 New Framework for the US-India Defence Relationship which expires in 2015 should be taken up as a priority for both the nations and they should make provisions for jointly redrafting an updated agreement.
  • Civil Nuclear Sector: A lot of work is to be done in this area, especially because of the stiff opposition the BJP had shown to the historic nuclear deal in the past, including pushing for a nuclear liability legislation that complicated US companies’ ability to invest in civil nuclear project in India. It must make its stand clear now, and rebuild the trust. It was the BJP, which during its previous tenure, paved the way for the historic 2008 nuclear deal through its launch of the Next Steps in Strategic Partnership (NSSP) dialogue. This dialogue aimed at facilitating increased cooperation in civilian space and nuclear programmes, high-technology trade, and on missile defence issues.
  • Countering Terrorism and maintaining regional peace: With the US pulling its troops out of Afghanistan, a security vacuum will be created in the neighbouring region which is a threat to the stability of the region. The two countries must discuss the possibilities of jointly combating any instability and terrorist activity in the area.
  • Apart from this, this first meeting must improve the ties between the two nations and encourage further dialogue on issues like environmental protection, maintaining open and free seaways, tourism etc.

A lot depends on this initial meet. India needs to be able to project herself as a strong, independent, yet friendly and trustworthy nation to the world. A nation, that could be formidable when crossed, but else strong and dependable; one that can usher in growth and in time become indispensable at the global stage.

Payal is a second year student at St. Stephen’s College, Delhi, pursuing a Bachelor of Science degree in Physics. When she is not trying to make sense of endless equations and the most complex theories, she is an avid reader who likes to believe that she has a strong liking for the world outside physics too. She has a knack for finding problems, and fervently prays for a brainwave to their solutions someday. She hopes to help reflect change in society, wherever possible. For any comment, please email her at: payal.mitra@hotmail.com

Posted by The Indian Economist | For the Curious Mind