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Modi, Obama striking the right chord
Wednesday January 28, 2015 9:52 PM, Syed Ali Mujtaba,

Modi Obama meetThe visit of US President Brach Obama during India's sixty sixth Republic Day celebrations in New Delhi has injected a new vitality into the economy and foreign relationship of the two countries. Inspite of skeptics calling it a 'sell out', Obama's visit has turned a new leaf in otherwise sulking Indo- US relationship.

During three days of interaction in New Delhi, India's Prime Minister Narandra Modi and US President Brach Obama, talked on first name terms, recorded a radio programme together and spent hours speaking at different events. Both reminded of business leaders, despite the bonhomie and camaraderie shown during the time spent in the moments of defining partnership.

The two sides elevated the bilateral relationship into a new India-US Delhi Declaration of Friendship. This is a significant chapter in the annals of India-US relationship. However, the sub text is the two countries have embarked on a journey where both have to tread on miles to go journey.

The center piece of Obma's visit to New Delhi was the nuclear deal. India and the US made a breakthrough agreement on commercial implementation of their landmark civil nuclear deal that was signed six years ago but fell into rough weathers due to clarity on many issues.

The Indian Prime Minister assured the nation that the civil nuclear commercial cooperation with the US is in consistent with Indian laws, international legal obligations, and technical and commercial viability.

The current Indo-US civil- nuclear deal is interpreted to have ended the decades of India's nuclear isolation because of its refusal to sign the Nuclear Nonproliferation Treaty (NPT).

The US' concern was over India's stringent civil nuclear liability law that puts the onus for any accident on suppliers. India had objection to the US insistence on control in perpetuity over the nuclear fuel and equipment.

Now India and the US have agreed to work towards a proposal to set up a $250 million insurance pool with money from all stakeholders to pay off any liabilities. The insurance pool is aimed at indemnifying companies building nuclear reactors in the country, against liability in case of an accident.

This is the most significant agreement because, despite a groundbreaking 2006 pact, the U.S. companies desisted from setting up nuclear reactors in India and had become one of the major irritants in the bilateral relations.

Hereafter the US is committed to work jointly for India's entry to the four multilateral export controls regimes - the Nuclear Suppliers Group, the Missile Technology Control Regime (MTCR), the Australia Group, and the Wassenaar Arrangement.

The next big achievement of Obama's visit is defense cooperation with India. India and the US entered a new strategic phase of co-production of some defence projects. The two sides renewed the 10-year Defence Framework Agreement and the Defence Trade and Technology Initiative (DTTI).

The new framework is to enhance the bilateral defence partnership with more intensive joint military exercises and maritime security efforts among others.

Under the DTTI, which is for co-production, both countries have agreed on four projects, including the Raven unmanned aerial vehicle (UAV), and the "roll-on, roll-off" intelligence, surveillance and reconnaissance module for the Lockheed Martin-manufactured C-130 J transport aircraft. Both sides are also to form a working group to explore technology for aircraft carriers and also share the design of jet engine technology.

In the field of energy, US President expressed interest in participating in India's 100 gigawatt solar energy project. The U.S. Trade and Development Agency is willing to aim to leverage nearly $2 billion in investments in renewable energy in India.

US and India pledged cooperation on mutual climate and clean energy goals. India and the US made important progress on combating climate change under 'Partnership to Advance Clean Energy' (PACE) an umbrella program to technical work on emerging technologies.

The agreements include; expanding PACE to extend funding for research on solar energy, energy efficiency, and advanced bio-fuels. Next was enhancing bilateral climate change cooperation to achieve a successful and ambition agreement in Paris this year. Cooperating on Hydro-fluro-carbons to make concrete progress in the Montreal Protocol scheduled this year. Then, launching air quality cooperation to help urban residents, reduce their exposure to harmful levels of air pollution.

The US President announced a series of additional steps that will generate more than $4 billion in trade and investment with India while supporting thousands of jobs in both countries. These funds would release what US President called the "untapped potential" of a business and strategic partnership with India.

Both sides also agreed to resume talks on the bilateral investment treaty and on a totalisation agreement. They also agreed to start discussions on social security agreement that is so important for the hundreds and thousands of Indians professionals working in the US.

US Export-Import Bank will finance up to $1 billion in exports of 'Made-in-America' products to India. The U.S. Overseas Private Investment Corporation will lend $1 billion to small and medium-sized businesses across India in rural and urban markets. The US also assured cooperating with India on the Digital India programme.

The United States views India as a vast market, but has been frustrated with the pace of New Delhi's economic reforms. India accounts for only 2 percent of U.S. imports and one percent of its exports. Under President Obama, trade between the two countries has increased by about 60 percent to nearly $100 billion a year. The two-way trade is now poised to reach the $500 billion mark by 2020. However, this still is much less to US-China trade.

Obama lamented that there are still too many barriers, hoops to jump through, bureaucratic restrictions that make it hard to start a business, or to export, to import, to close a deal, deliver on a deal with India. To this, the Indian Prime Minister vowed to do more to improve the business environment. He announced that U.S. investment in India had doubled in the past four months.

The two sides also inked three MoUs between the US Trade and Development Agency and the governments of Andhra Pradesh, Rajasthan and Uttar Pradesh for the smart city projects involving Ajmer, Allahabad and Vishakhapatnam.

India and the US have noted commonalities in their regional policies. This provides opportunities for both the countries and other Asia-Pacific nations to work closely to strengthen regional ties. The two also announced a Joint Strategic Vision to guide their engagement in the region.

Both India and the US hope to build enough momentum to forge a relationship that will help balance China's rise by catapulting democratic India into the league of major world powers. In a joint statement the two countries made a veiled reference to China's territorial claims.

The two leaders stated their commitment to freedom of navigation in the South China Sea. This statement is significant as it is seen as potential counterweight to China's assertiveness.

Obama's visit underlines the confidence that New Delhi can increasingly be prepared to engage with global security. In the US perception, India can play a key role in battling Islamic State in West Asia.

Both the leaders agreed to exchange information on individuals returning from these conflict zones and to continue to cooperate in protecting and responding to the needs of civilians caught up in these conflicts. The two sides have decided to set up a hotline between the two leaders.

In sum, what the diplomats were struggling to achieve over the years, the two leaders Narander Modi and Brach Obama did so by striking a common chord and that too without any whimpers.

[Syed Ali Mujtaba is a journalist based in Chennai. He can be contacted at]

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