Clip_104President Barack Obama’s two-day visit to India is being seen as the first real test for Washington and New Delhi – two capitals looking to elevate their relationship as an important strategic partnership. But atmospherics aside, how transformative is this latest display of camaraderie likely to be for the two countries? And how are events in New Delhi likely to be read in Islamabad?

Heavy on metaphor

President Obama’s decision to accept New Delhi’s invitation to attend India’s Republic Day ceremony – a first for a sitting American president – is being hailed as nothing less than an international tribute to India, and heralded by politicians and the news media as a sign of New Delhi’s arrival on the world stage. As one announcer told the crowds gathered on Republic Day, it is ‘a proud moment for every Indian.’ Indian newspapers were quick to make much of the bear hug which Prime Minister Modi greeted President Obama with as America’s first couple stepped of Air Force One and the natural chemistry between the leaders of the world’s oldest and largest democracies. That President Obama opened his remarks to the media with a smattering of Hindi was a remarkable spectacle, given that a year ago Modi was persona non-grata in Washington, and was denied a visa to the United States.

Civil-nuclear deal ‘breakthrough’

On the first day of his visit, President Obama announced, to considerable fanfare, that the deadlock on the six-year-old Indo-US civilian nuclear power agreement had ended. This deadlock related to the commercial implementation of the landmark 123 Agreement inked in the Manmohan era, and is now predicted to unblock millions of dollars in nuclear trade. In layman’s terms, the two sides have essentially resolved differences over the liability of nuclear suppliers to India in the event of a nuclear accident, US demands on monitoring the whereabouts of US-supplied nuclear material to the country, and India’s membership to the four non-proliferation regimes which will now open up New Delhi’s access to high technology. To address these issues, India has proposed a nuclear liability insurance pool that will involve a state insurer and be backed by government. Until now, US companies had been reluctant to construct nuclear plants in India unless they were shielded from liability after accidents – an assurance Indian lawmakers had been unwilling to extend owing to a strict liability law passed in 2010.

Defense, dollars and drones 

That India’s Republic Day parade prominently featured Russian made Mi-35s was ironic. However, President Obama has clearly expressed that Washington is keen to compete for India’s defense market. Over their two-day discussions, President Obama and Prime Minister Modi renewed the 10-year defense pact between their two countries and agreed to cooperate on aircraft carrier and jet-engine technology. The US-India Defense Technology and Trade Initiative (DTTI) is also poised to increase joint-production and joint development: in particular, the two countries agreed to work on joint production of small-scale surveillance drones, as well as equipment for Lockheed Martin Corp’s C-130 military transport plane. Detractors of the agreement, however, argue that these initiatives are still modest compared to India’s agreements with Moscow: it is worth remembering that India continues to be the world’s largest consumer of Russian arms.

Business and investment

Addressing a roundtable of top Indian CEOs and businessmen, President Obama made it clear that he sees India as the next big market for US investors. On the close of his second day in New Delhi, the American President pledged $4 billion in investments and loans, seeking to tap what he called the unreali​s​ed potential of the two countries’ business and strategic dealerships. The US Export-Import Bank will also finance $1 billion in exports of ‘Made-in-America’ products; the US Overseas Private Investment Corporation, meanwhile, will lend $1 billion to small-and medium-sized enterprises in rural India. Other deals inked over the two days range from an Obama-Modi hotline to financing initiatives aimed at helping India use renewable energy to lower carbon emissions. In this regard, $2 billion will be committed by the US Trade and Development Agency for renewable energy, a key focus of both governments.


The two leaders also identified terrorism as a major threat, agreeing that there should be no distinction between terrorist groups. President Obama is believed to be looking to push India into a bigger role in battling the spread of the Islamic State. The two sides have also pledged to deepen cooperation on maritime security. Since the 2008 Mumbai terror attacks, counter-terrorism cooperation has evolved significantly vis-à-vis intelligence-coordination and cooperation between law enforcement agencies to curb terrorist financing. The renewed pact is further expected to elevate cooperation in criminal law enforcement and military exchanges. Maintaining that terrorism remains a principal global threat, Prime Minister Modi stressed, ‘It is taking on a new character, even as existing challenges persist. We agreed we need a comprehensive global strategy and approach to combat with it. There should be no distinction between terrorist groups. Every country must fulfill its commitments to eliminate terrorist safe havens and bring terrorists to justice.’

Clip_160The Pakistan factor

President Obama is the second US President after Jimmy Carter not to visit Pakistan on his India trip, and first President George H. Bush not to have visited Pakistan at all. The United States has worked hard to assure Pakistan that President Obama’s visit to India will not in any way jeopardise its relations with Islamabad; Advisor to the Prime Minister on National Security Sartaj Aziz has also underscored the visit as an opportunity for the US to ​ leverage its newfound capital in New Delhi to​ urge India back to the negotiating table​ with Pakistan,​ restart ​the bilateral ​dialogu​e​​, and end unprovoked firing along the LoC​. But there was little reported reference to Pakistan in public or private conversations during the two-day deliberations in New Delhi.​ ​


While the visit has been hailed as ‘transformational’, it was noticeably truncated owing to President Obama’s plans to fly to Saudi Arabia on his way home. Perhaps bending to the pressure of increasing NRI muscle, President Obama has also assured Prime Minister Modi that he will look into India’s concerns on the H-1B visa issue (popular with Indian technology workers), as well as a broader Indian presence in the United States as part of his comprehensive immigration reform strategies. Interestingly, however there has been no major breakthrough – only modest agreements – on the issue of climate change, unlike Obama’s visit to Beijing last year where he managed to nail agreements on carbon reductions. India continues to remain adamant about not making legally binding emissions cuts, which would compel it to roll back on industrial activity and therein economic growth. Furthermore, Indo-US ties are still fragile: presently India only accounts for 2 percent of US imports, and one percent of its exports. And while annual bilateral trade between Washington and New Delhi has reached $100 billion, this still amounts to less than one-fifth of US trade with China. In the field of cooperation over nuclear energy too, US suppliers face stiff competition: while the US has pledged to help build at least 8 reactors in India, France is currently building six reactors, while Russia has already made plans to build 20.

President Obama’s visit to India has reinforced the perception of US-India strategic partnership, notably in the nuclear, defence and defence technology domains. This could embolden India to persist with its hard line against Pakistan and is certainly detrimental to strategic stability in South Asia. Grandstanding will not promote peace and prosperity in this region. A vision of amity and cooperation for mutual progress and prosperity is essential, while the politics of alliances and alignments is counterproductive.

The visit, however, is unlikely to have a major impact on either the Indo-Pak or Pak-US bilateral relationship. The visit is reflective of a clear shift in the United States’ policy towards South Asia favouring India, as opposed to the balancing act that US historically had tried to perform in its approach to India and Pakistan. The United States is no longer as close to Pakistan as it once was, while India has evolved into an important, strategic partner for Washington. The Indians are also looking at a much broader relationship with the United States, and one that accommodates changing geopolitical dynamics including China’s position in the region.​ However,​ it is​ hoped that Washington will bring some influence to bear on India to be more reasonable in its policies vis-à-vis Pakistan, which will be beneficial to stability in South Asia as a whole. On the subject of the nuclear deal signed between India and the US, these arrangements have been finalized for a while, and there is no need to read too much into the latest breakthrough. A strategic conventional imbalance between India and Pakistan has existed for a while, and this will not necessarily be exacerbated by President Obama’s most recent visit.