Obama’s trip a step up for India

By: Naveed Hussain

The much-anticipated maiden trip of US President Barack Obama to India, later this month, is already making headlines, with breathless commentaries on possible opportunities for the two sides. The relationship of 60-odd years between the world’s two biggest democracies has been characterised by ebbs and tides, with the Pakistan factor playing a key role in their bitter-sweet relationship. President Obama’s predecessor, George W Bush, though unpopular at home, delivered a civil nuclear deal to India despite strong opposition from Islamabad and despite Delhi’s reluctance to ratify the Nuclear Non-Proliferation Treaty (NPT). But there is no big ticket item on Obama’s trip — the longest he will make to any foreign country during his presidency so far.

So what does New Delhi expect? The list isn’t too long. One, it expects President Obama to lift export restrictions on sensitive hi-technology put in place after the 1998 Pokhran nuclear tests. Two, it wants unequivocal US support for a permanent berth on the UN Security Council. And three, India wants President Obama to address its concerns over billions of dollars of aid given to Pakistan.

In return, the burgeoning Indian economy and its quest for arms, fuelled by the growing military might of China, has a lot to offer. In June this year, British Prime Minister David Cameron, on a tour to India, clinched $1.1 billion in defence deals. The Obama administration knows that India, one of the world’s biggest arms markets, is expected to spend $112 billion on defence acquisition between now and 2016. And President Obama will be pushing for the existing American tenders for defence contracts.

But the lion’s share is expected to go to America’s rival, Russia, as New Delhi is expected to sign an approximately $30 billion stealth fighter co-production deal with Moscow, during President Dmitry Medvedev’s trip next month. High on President Obama’s priority list will be India’s assimilation into global non-proliferation bodies, such as the Nuclear Suppliers Group, Missile Technology Control Regime, the Australia Group and the Wassenaar Arrangement. Obama may also press India to begin serious commercial negotiations with American nuclear suppliers as a follow-up to the nuclear deal.

Now the million-dollar question: What can Pakistan expect from this trip? Not much, frankly speaking. America doesn’t want to estrange India — a country with which President Obama says his country is going to have one of the “defining relationships” of the 21st century. Proof: Obama skipped Pakistan in his upcoming tour.

Islamabad expects the Obama administration to play a role in resolving the Kashmir dispute which has been bedeviling Pakistan-India relations since their inception in 1947. At the recent strategic dialogue meetings in Washington, Foreign Minister Shah Mahmood Qureshi did raise this issue. But the State Department quickly moved to preclude the possibility of US mediation, saying Washington will encourage bilateral dialogue between the two countries to resolve the issue. So there is little possibility of this issue figuring in talks between President Obama and Prime Minister Manmohan Singh. But Pakistan and Afghanistan will surely be on the agenda. India has become the biggest regional aid donor with its $1.3 billion worth of civilian projects in Afghanistan. The US is happy with this ‘developmental role’ but Pakistan is not; it is wary of the increasing Indian presence in its backyard. The real test for President Obama will be to strike a balance, or at least some semblance of balance, in its de-hyphenated relations with the two hyphenated neighbours.

Published in The Express Tribune, November 2nd, 2010.

(The writer is shift in charge at The Express Tribune).

 

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  • Rupee News  On November 2, 2010 at 2:10 am

    Though top US officials in India termed the anti-outsourcing rhetoric ahead of the American Senate’s mid-term elections as “insignificant footnotes in a voluminous book of indispensable partnership between the two countries”, a former aide of Obama said the Democrat President would not announce any change in his policy that disallowed tax breaks to companies that outsources job to other countries.

    At an interaction on “US-India Relations: How India Can Strengthen its Position” organised by the Observer Research Foundation, Pete Dagher, the former chief campaign manager of Obama, said he did not foresee the American President announcing any change in his administration’s policy of discouraging outsourcing of jobs to other countries.

    “It’s unlikely. I don’t think the President will open up for jobs”, said Dagher, while responding to a query if Obama might make any announcement to allay India’s concern over the possible impact of American protectionism on its Information Technology industry.
    Obama announced a few weeks ago that his administration would offer tax benefits only to firms that would create jobs in the US. It is being seen as a move that might hit Indian IT industry in a big way.

    Dagher also said that the President was unlikely to mention anything against China and Pakistan. He was responding to a query from retired diplomat and former Indian envoy to the United Nations Arundhati Ghose.

  • Laila  On November 2, 2010 at 2:24 am

    US companies hope to consummate some large contracts during President Barack Obama’s trip to India in early November, according to a top aide.

    There are “a number of large contracts” between American and Indian companies, and “we hope to consummate some of these deals,” Quoted by: National security aide Mike Froman.
    Obama also will go to the Taj Hotel to commemorate the Mumbai terrorist attacks and to the Gandhi museum.
    The first day will focus on Obama’s message on economics, increasing exports and jobs.
    Obama and Prime Minister Manmohan Singh of India will probably talk about climate change during Obama’s visit.
    On the second day in India, Obama will visit a Mumbai school and participate in Diwali celebrations. Then he’ll go to a town hall with university students, where he’ll focus on partnerships, agriculture and food security. Obama will highlight India’s successes as the world’s largest democracy.
    On Day three, Obama will go to New Delhi to have a “private dinner” with Prime Minister Manmohan Singh.
    The next day, Obama will lay a wreath at Mahatma Gandhi’s Samadhi at Rajghat, then meet with Manmohan Singh and give a news conference. He’ll also address the Indian parliament before going to a state dinner. On Nov 9, he’ll go to Jakarta.
    His wife will accompany him.
    Will he discuss violation of Indus Water Treaty?
    Will he discuss Kashmir?

    • Tanvir Ahmed Siddiqui  On November 2, 2010 at 5:49 am

      Ms Laila:
      As you have given details of his itenerary … and as also mentioned by the writer “there is no big ticket item on Obama’s trip” i therefore think there is nothing to discuss in perspective of Pakistan-US and Pakistan-India relationship. Hardly anything is expected to change here or there.. It is only that He is not visiting Pakistan. That is may be because of the most unpopular Govt. of Pakistan.

  • FM  On November 2, 2010 at 3:52 am

    In 90s I found that US Embassy had a research team to explore and identify the business avenues in India. They used to then consider India a very big dumping place to trap them in the interest of USA. USA has the biggest Embassy property in India as compared to any other Embassy. Business development is part of their permanent Policy apart from non Muslim ffriendly country “India”
    FM

  • Rupee News  On November 2, 2010 at 3:56 am

    Delhi an apt location for Obama’s Obituary to Outsourcing

    Amid indications that outsourcing could become a hot issue in the November polls, President, Mr Barack Obama, has made his stand on the issue clear, saying that tax breaks should go to companies that create jobs in the US and not overseas.
    Mr Obama comments came close on the heels of the Ohio state Governor passing an executive order to ban outsourcing, a development that has raised concerns in India that is often described as the world’s back office.
    Significantly, Mr Obama’s policy speech on economy came in Ohio itself, where he made clear his determination to end tax loopholes that provide incentives for investment in overseas jobs, saying he will provide a generous tax credit to companies that create more jobs in the US.
    It is interesting that Obama is telling the US citizens that he is opposed to outsourcing services to India, and will no longer give US industries tax cuts for outsourcing there.

    Yet he will not tell this to the people of India. He is a chamelion President, changing colours to adapt to whichever environment he is in, telling them whatever they’d like to hear – but all of which are untruths.

    This is purportedly the most expensive Presidential trip in US History.His cavalcade will include Air Force One, 18 cargo planes and two extra jumbo jets carrying hundreds of secret service agents, communications equipment, a team of White House chefs, doctors, 100 journalists and 45 vehicles, half of which are used as a decoy motorcade, Obama will be accompanied by 200 business leaders, including Nooyi and McGraw-Hill publishing house’s CEO Terry McGraw, during the visit. (Dean Jamison published on the Kabul Times).

    One of the keys to job creation is to encourage companies to invest more in the United States. But for years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,” Mr Obama said at Cleveland.
    The president said he was determined to change that.
    “I want to change that. Instead of tax loopholes that incentive investment in overseas jobs, I’m proposing a more generous, permanent extension of the tax credit that goes to companies for all the research and innovation they do right here in America,” he said, with Ohio Governor Ted Strickland standing by his side.
    With election due in November for 37 of the 100 seats in the United States Senate, and the opinion polls painting a grim picture for the Democrats, Mr Obama sought to project the tax issue as a key policy difference between his party and the Republicans.
    “I think if we’re going to give tax breaks to companies, they should go to companies that create jobs in America — not those that create jobs overseas. That’s one difference between the Republican vision and the Democratic vision. And that’s what this election is all about,” Mr Obama said.
    Washington : President Barack Obama today underlined his determination to end tax incentives for companies that create jobs overseas, saying he will provide a generous tax credit to companies that create more jobs in the US.

    Amid indication that outsourcing could become a hot issue in the November elections, Obama said the tax breaks should go to companies that create jobs in the US and not overseas.

    “One of the keys to job creation is to encourage companies to invest more in the United States. But for years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,” Obama said in his speech on economy at Cleveland, Ohio.

    The President said he was determined to change that. “I want to change that. Instead of tax loopholes that incentivise investment in overseas jobs, I’m proposing a more generous, permanent extension of the tax credit that goes to companies for all the research and innovation they do right here in America,” Obama said with Ohio Governor Ted Strickland standing by his side.

    “I think if we’re going to give tax breaks to companies, they should go to companies that create jobs in America — not those that create jobs overseas. That’s one difference between the Republican vision and the Democratic vision. And that’s what this election is all about,” Obama said.

    Running behind in opinion polls, Strickland of Democratic party, who till now was going out of his way to woo Indian companies, last week passed an executive order that banned outsourcing, arguing that this undermines economic development and has unacceptable business consequences.

    “Outsourcing jobs does not reflect Ohio values,” Strickland said in a statement after he signed the executive order.

    Reacting to the order, the Indian IT sector, which gets 60 per cent of its export revenue from the US, termed the move as discriminatory and said it amounts to a trade barrier.

    The move, which comes ahead of Obama’s visit to India in November, follows a controversial legislation that increased H-1B and L1 visa fees, hitting India’s over USD 50 billion IT industry.

    The Indian industry will take up the issue with its US counterparts and seek government’s support to flag it with the American authorities.

    “Nasscom is leading a delegation to the US later this month and will be taking this up with relevant officials in the US,” the apex body of the IT and ITES industry said in New Delhi.

    Obama said his proposal will help small businesses upgrade their plants and equipment, and will encourage large corporations to get off the sidelines and start putting their profits to work in places like Cleveland and Toledo and Dayton.

    Infosys expresses concern over Ohio state govt’s move

    Bangalore, PTI

    Infosys, the country’s second largest software company, today expressed concern over the Ohio state government’s move to ban IT outsourcing to offshore locations such as India.

    Infosys CEO & Managing Director Kris Gopalakrishnan said, “We are concerned with the recent news from US about banning offshore outsourcing by Ohio State government departments.

    “Infosys’ initiative in the Public Services sector is focused on creating a domestic Delivery Center in the US hence this should not be affected.”

    Meanwhile NASSCOM in a statement said: “Ohio state’s proposed ban on outsourcing of government IT projects comes at a time when the November elections to the United States Congress and Ohio governorship are drawing nearer”.

    “There is more such electoral rhetoric that can be expected in the next few months. While the public sector represents a small fraction in the overall demand for offshored services, it does represent a future focus area”, it said.

    Globally, governments are beginning to see the benefits that can be reaped out of employing Information Technology in public services. India too is opening up not only in IT, but other areas, representing a growth market for global and domestic companies.

    “Ohio’s ban on outsourcing can only be viewed as counterproductive to the US government thrust on reducing public deficit and possibly lead to an increased tax burden on its citizens”, it said.

    “It is imperative that the focus on free trade remains strong, but instances like Senator Schumer’s Borders Security Bill and the Ohio State ban on outsourcing only reinforce our stand on discrimination”, he said.

    Incidentally, international trade is a federal subject and NASSCOM is studying the legality of such a Bill being passed by a state government.

    NASSCOM is leading a delegation to the US later this month and will take this up with relevant officials in there.

    Footlink

    Ohio outsourcing ban is trade barrier: India Inc

    New Delhi, PTI

    The Indian IT sector, which gets 60 per cent of its export revenue from the US, today said the move by the state of Ohio to ban outsourcing by government departments to offshore locations like India is discriminatory and amounts to a trade barrier.

    Through an executive order last month, Ohio Governor Ted Strickland prohibited the expenditure of public funds for services provided offshore.

    The move comes ahead of the impending visit of US President Barack Obama to India in November.It also follows a controversial legislation (border security law) increasing H-1B and L1 visa fees, hitting India’s over USD 50 billion IT industry.

    The Indian industry will take up the issue with its US counterparts and seek government support to flag it with the American authorities.

    “Nasscom is leading a delegation to the US later this month and will be taking this up with relevant officials in the US,” the apex body of the IT and ITES industry said here.

    Nasscom said it would also seek support from Commerce and Industry Minister Anand Sharma, who is visiting the US later this month. Sharma is likely to take up the matter with the US Trade Representative and other senior officials.

    It said since international trade is a federal subject in the US, Nasscom is studying the legality of such an order by a state government.

    “Ohio’s ban on outsourcing can only be viewed as counter -productive to the US government thrust on reducing public deficit… It only reinforces our stand on discrimination,” it said.

    Nasscom said it would not be surprised if more such “electoral rhetoric” follows in the run-up to the November elections to the US Congress and Ohio Governorship.

    Infosys Technologies, the country’s second largest software exporter, said, “We are concerned… about banning offshore outsourcing by Ohio State government departments.”

    Ganesh Natarajan, the chairman of the CII national committee on IT and the CEO of Zensar Technologies, said that while the Ohio development would not have much of a financial impact on IT firms, the issue would be taken up with the US trade mission visiting India this month. Indian IT firms earn most of their revenue from the private sector in the US.

    Despite these irritants, the US would remain the major market for Indian IT firms, he said.

    Assocham said the Ohio ban amounts to a trade barrier and the move would be against the US’s interest.

    The stock market, however, shrugged off the developments, with shares of TCS, Infosys and Wipro moving up today.

  • Sajjad Ahmad  On November 2, 2010 at 7:56 am

    Salam

    Obama’s visit to India is to add bones in India’s neck and thats it. India would get public support for its ambitions in UNSC. Additionally, would like to gain access to hi technology, as said by the writer and surely greater role in Afghanistan. Other gains, which India is expecting including America’s not-clear approach towards Kashmir. I personally believe that America wants to see Kashmir as an independent state and not a part of either India or Pakistan. Moreover, more access to American labour market, some surerities against provision of defence equipment to Pakistan also include in -India’s list.

    While USA is primarily focusing on India’s wealth. Multi billion dollar defence deals are one of the many objectives of Obama’s visit to India. It also wants to gain access to India’s large (but poor) market. Enhanced Indian role in Afghanistan and its baa baa against China please America.

    What is playing a key role between US and India relations is Israel factor. Both Israel and India are die hard enemies of Muslims. Pakistan’s Islamic identity and its 7th largest military in the world, powered by Nuclear arms and missiles do not let both to sleep with peace. India fed up from us becaus we are a key hurdle in their way to be a regional power. Whenever it stands or will stand against China, Pakistan throw a stone on their glass houses. Israel’s ambitions to grab more arab land also could not be fulfiled without elimination of nuclear and non-nulcear military power of Pakistan. Pakistan’s downfall will surely let down the rest of Muslim world. The way Libya surrendered its nuclear capabilities and if any success to Anti-Islam countries, the Muslim world will find it nowhere inthe world. And that would be a good time for land grabers in Arab.

    Both, especially Israel are very special to USA and Europe too. And USA in perticular will not and could not to forget to protect the interests of Israel in the rest of the world.

    In the name of the religion, which they had abandoned, they are spreading hate and destruction in the whole world and Allah knows, when it will end.

  • Rafiq Mian  On November 2, 2010 at 6:44 pm

    It must be an interesting trip for Obama – our backyard not being a part of it. I remember Bush seemingly playing cricket with our boys.

    Intersting – Obama is not even getting into the Bush-like cricket scenario. Clinton whisked us in his times.

    Should Obama? I do not think so – who are we? What have we proven to the world in our favor. Never in life – I have seen a worse goverment.

    Come on – let us look at ourselves and ask ourselves my dearies: Khudee ko kar bulund itna — ????

    What do we have unto observation for the world to see – for heavens sake !!!!!

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