The coming week will witness some intense diplomatic activities between India and the U.S, as Secretary of State John Kerry and Commerce Secretary Penny Pritzker travel to New Delhi for the second Strategic and Commercial (S&C) dialogue and Defence Minister Manohar Parrikar arrives in Washington. Senior officials from 12 different U.S. agencies will be part of the S&C dialogue that will be co-chaired by the U.S Secretaries and their Indian counterparts External Affairs Minister Sushma Swaraj and Commerce Minister Nirmala Sitharaman.
The signing of the Logistics Exchange Memorandum of Agreement (LEMOA) is likely to top the agenda of Mr. Parrikar in the U.S capital. While the U.S is keen to have the LEMOA signed, India is pushing for forward movement on high technology trade. With the induction into the Missile Technology Control Regime (MTCR) earlier this year, India is now eligible for higher technology purchases. Ratification of the Paris climate treaty by India and its admission into the Nuclear Suppliers Group (NSG) will be on the agenda for the S&C dialogue.
India and the U.S started the annual strategic dialogue in 2009 and the commercial track was added last year, recognising that both aspects are often intertwined.
“The two governments are also likely to continue discussing strategic topics ranging from climate change cooperation, national security and counter-terrorism, priorities in the Indian Ocean region as well as top economic priorities such as positioning U.S. companies for success at the sub-national level. In particular, the commercial track of the dialogue will continue to see heightened focus on ease of doing business, the U.S.-India partnership on tourism, developing a digital infrastructure, and roundtables on infrastructure and clean energy,” said Mukesh Aghi, president, USIBC (US India Business Council).
There is an increasing sense among the U.S policy makers that while the Modi government is open to investment, it is as reticent as previous governments on trade. “I think on the investment climate, there would be more positive views than negative. The Modi government has lifted FDI caps at a record pace, personally courted investors, and the FDI inflows are among the highest of any country. But on the trade side, there is disappointment. We'll likely end the Obama tenure without any progress on neither a Bilateral Investment Treaty nor a common vision or approach to key issues at the World Trade Organization,’ said Richard M. Rossow, Wadhwani Chair in the U.S. India Policy Studies at the Center for Strategic and International Studies (CSIS).
Both countries may finalise and announce a framework for cooperation on cyber security, said Mr. Rossow. “Setting the rules of coordination in this space is critical, and will mark real progress. Otherwise, this will be mostly about wrapping up smaller issues and setting plans for engagement in the next U.S. administration,” he said.
During Mr. Parrikar’s visit, India’s request for unmanned aircraft Predator for maritime domain awareness will be on the agenda. Membership of the MTCR makes India eligible for purchasing them from the private sector manufacturer General Atomics and the proposal is under the active consideration of the U.S government.
Dr Vivek Lall, Chief Executive, US and International Strategic Development at General Atomics — a former NASA scientist and Boeing official who has steered major defence deals between the two countries — declined to comment. “It is a government to government discussion. General Atomics will be opening an office in India this year.”
The U.S State Department's assessment of global investment climates recently was critical of India, but “overall, U.S. industry continues to be very bullish on the economic opportunities in India,” said Mr. Aghi. “…while industry is often anxious to see reforms passed quickly, industry also recognizes and respects the fact that India is a robust democracy where any reform most be a consensus-driven process. American industry is buoyed by the passage of the GST, a bankruptcy and arbitration code, and the real estate bill. Issues that were earlier insurmountable are now back on the table and being tackled through consistent dialogues,” Mr. Aghi said.
