Q&A with Lalit Mansingh - ‘US wants to move on & boost ties’

How do you view the course of bilateral ties between India and the US as Prime Minister Naren-dra Modi gets ready to make his first trip to the US, after 2002?

Mr Modi won the general election on the promise of change. Change for him means rapid economic growth. And for him, foreign policy is one of the principal instruments with which India can accelerate its economic growth. In all his meetings with world leaders, India’s economic growth and security have come up as twin priorities. By the end of this year, he would have met not only the leaders of the neighbourhood and other global leaders individually, but also participated in five major regional summits (Brics, Asean, European Space Agency, G20 and Saarc), apart from addressing the UN General Assembly. He is accelerating the process and going ahead with all guns blazing.

Mr Modi has sequenced his meetings with Japanese Prime Minister Shinzo Abe, Chinese President Xi Jingping and US President Barack Obama to derive competitive advantage for India.

During Mr Obama’s tenure, India-US ties actually started to slow down, while they were seemingly still expanding on paper. Over the past two years, bilateral relations plunged to the lowest point since 1998. This started with the 2012 Budget that brought in retrospective taxation, unfriendly investment regulations and uncertainty over the fate of economic reforms. Even as late as March this year, the US National Association of Manufacturers was calling for sanctions against India. The US Trade Represen-tative was also being urged to declare India as a “priority country” under Section 301, which would bring mandatory sanctions agai-nst India. American insensitivity in handling the Khobragade incident provoked unprecedented outrage in India. All this was a far cry from what the relations were supposed to be!

Do you think America’s denial of a visa to Mr Modi in 2005 will cast a shadow?
That is a dead issue now. Mr Modi was gracious enough to say it will not come in the way of ties. The US has demonstrably reached out to the Modi government by sending three of its top officials to engage with the new government. It was their way of saying they wanted to move on and raise the level of engagement.

External affairs minister Sushma Swaraj recently said that visa issues and immigration laws would top the agenda for India in talks between the two countries. Will the US address Indian concerns?
There has been pressure on US companies hiring foreign skilled personnel. India will send a strong message that any curtailment on the movement of its skilled personnel will be a barrier to India doing business in the US. It is likely that Mr Modi will receive some assurances from the US on this.

What are the likely deliverables for India from PM Modi’s visit?
It is expected that there will be an announcement of the renewal of the 10-year defence cooperation agreement that lapses next year. The US is already a major supplier of defence equipment to India. Mr Modi may look for transfer of technology and large US investments in India, especially in infrastructure, on the lines of the commitments he has recently received from Japan and China.

However, there are structural weaknesses. Mr Obama cannot directly commit US companies to invest in India in the same way in which Chinese leaders or even the Japanese can. The US line has been that India should make its investment climate attractive for American companies. That is why Mr Modi is reaching out to US business directly. By encouraging joint ventures and raising the FDI limit in the insurance and defence sectors from 26 to 49 per cent, Mr Modi will be able to point out that India has changed its rules to welcome more foreign investment. A revival is anticipated of the 27 odd high-level dialogues with the US, which had languished under UPA-2. This is likely in key sectors like energy, agriculture, education and financial services.

What will the US be looking for?
The US is looking for the global trade facilitation agreement to be concluded and does not want India to be the major roadblock. Mr Modi has held his ground but may agree to a compromise that takes into account India’s food security concerns. The US also wants India to make changes in its nuclear liability law to ensure that the vendors are not faced with unlimited liability in case of a nuclear accident. The US, of course, will want to further strengthen defence ties with India and expect high value defence orders to continue. Above all, the US will look for India to be a critical dialogue partner for regional and global issues.

Will India join the US in its strategy of containing China in Asia through the US policy of re-balancing its naval assets in the Asia-Pacific?
I think the Modi government will continue with India’s policy of pursuing a strategic partnership with the US, which stops short of a military alliance. Importantly, China is the world’s fastest-growing economy and India’s biggest trading partner. China is also promising to bring vast amounts of investment into India. At the same time, India is worried about China’s strategy of aggressively pressing its territorial claims while drawing India’s immediate neighbours into its embrace. India is hedging its bets with China. Hence the strategy of strengthening ties with Japan, China’s principal rival in East Asia and closer cooperation with other regional powers like Australia, Indonesia, Vietnam and Korea.

Keeping a wary eye on China’s moves in the Indo-Pacific region is implicit in the Indo-US strategic partnership. This will not, however, extend to joining the US in a policy to contain China.

How much focus will there be on the AfPak region in the discussions?
There will definitely be discussions on the developments in Pakistan and Afghanistan. India is likely to raise the issue of continued American military assistance to Pakistan. While clarifying the reasons for suspending the dialogue with Pakistan, Mr Modi will drive home the point that Pakistan’s policy of cross-border terrorism and encouragement of secessionist elements in India will no longer be acceptable. Both sides will welcome a higher level of intelligence sharing and counter terrorism cooperation.