IN ASIA

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Obama’s Visit to India Signals Rapidly Evolving Relationship

January 28, 2015

Sagar Prasai Obama in IndiaOn his three-day visit to India, President Obama became the first U.S. president to attend the annual Republic Day parade with Prime Minister Narendra Modi, in what many are calling a sign of strengthened relations between the world’s largest democracies. In Asia editor Alma Freeman caught up with The Asia Foundation’s India country representative, Sagar Prasai, from his office in Delhi for his perspective on what this means for U.S.-India relations, regional integration, and Prime Minister Modi’s push for greater foreign investment.

Thousands of spectators braved the chilly rain to attend Republic Day celebrations on Monday. How do you think Obama’s visit was received by the public overall?

The Republic Day Parade is a nationally televised event in India. For most Indians, it is a sight that inspires an assuring sense of nationalism, symbolizes the country’s military and economic progress, and allows a moment to revel in state-produced pomp. Coming out of a fairly protracted antagonism of the cold war years, the U.S.-India relationship has evolved very quickly since the 1990s. Most Indians who came of age then don’t even recall India’s “anti-American” past and most Indians born after the 1990s are subsumed by the power of American cultural symbols and newfound consumerism that draws them ever closer to all things American. In a country where the youth make up the majority, embracing the new has become as easy as forgetting the past, and President Obama’s presence in the Republic Day parade for all intents and purposes symbolizes that transition in the public psyche. The story of the growing convergence in economic and geopolitical interests of the two countries may or may not matter to the public, but the idea of becoming U.S.-friendly does.

Both leaders spoke about the importance of a global partnership and India’s role in ensuring security and peace. What do you see as the biggest areas of potential for India in a stronger relationship with the U.S.?

India’s growing economic weight and military power needs a purpose and a position in global politics. For India, a stable neighborhood, a secure Indian Ocean, deeper economic integration with countries in the Pacific Rim, and increased U.S. investment in Indian manufacturing have become key geopolitical deliverables in the near term. For the U.S., India can become a dependable security partner in an essentially unstable region, a fast-growing market for high-value U.S. exports, and a geopolitical counterweight to the growing power of China. As long as the U.S. remains ready to promote India’s geopolitical interest, India is likely to oblige on all three counts of U.S. interest in India. This partnership has tremendous potential but the pace of delivery on both sides has to match the rhetoric.

Obama ended the visit with a pledge of $4 billion in investments and loans, seeking to release what he called the “untapped potential” of a business partnership with India. Since his inauguration, Modi has pushed for a new deal for foreign investors, easing procedural obstacles, even creating a one-stop portal, “Make in India” to facilitate. What do you see as the biggest challenges that Modi faces in pushing this forward?

U.S.-India trade currently hovers around $100 billion; the $4 billion investment is not a significant amount but it signifies the United States’ will to promote trade and investment in India. “Make in India” may move faster in protected sub-sectors such as defense than in the open market. India still needs to do much more in regulatory reforms – it currently ranks 142nd on the World’s Bank’s “Ease of Doing Business Index,” and its infrastructure needs serious upgrading before it can truly sell “Make in India” to the open market. I would say energy is India’s biggest challenge. Even as the two countries were able to “seal the deal” on civil nuclear cooperation on Sunday, a number of issues need to be resolved before U.S. nuclear power plants in India are able to supply the amount of energy that India’s ambitious growth plan demands.

In a blog piece about Modi’s whirlwind visit to the U.S. in September, you wrote that: “It is difficult to imagine that India’s claim on the high seat of global politics will be recognized by the rest of the world without India being able to take care of the problems in its own backyard effectively.” South Asia remains the least integrated regional bloc. What is India under Modi doing to strengthen its role in the region, and what are the major sticking points that keep it from integrating more successfully?

The biggest change since Modi’s arrival has been that India has taken a much more open and sincere stance on the regional integration issue. The regional integration agenda has historically suffered from limited political will, poor connectivity infrastructure, and lack of integration institutions. Now that the political will appears to have evolved, work on the other two fronts requires a significant ramping up. Beyond the generic elements, Indo-Pakistan relations are an important factor in regional integration in South Asia. Pakistan is going through a soul searching of its own as well. What to do with political Islam in Pakistan is a Pakistani as well as an Indian question. The two countries are still reluctant to take the obvious steps to improve relations but are playing with the idea of a normalized relationship more sincerely than before. If the Indo-Pakistan piece of the puzzle falls in the right place, South Asian integration becomes a matter of planning and implementing rather than wishing and dreaming.

The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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In Asia is a weekly in-depth, in-country resource for readers who want to stay abreast of significant events and issues shaping Asia's development, hosted by The Asia Foundation. Drawing on the first-hand insight of over 70 renowned experts in over 20 countries, In Asia delivers concentrated analysis on issues affecting each region of Asia, as well as Foundation-produced reports and polls.

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