A good start, now to get the investments going
Given the hype created by the $55 billion promised by the Japanese and the Chinese, prime minister Narendra Modi’s US visit was always certain to compare unfavourably. Though the visit was a successful one in terms of both sides getting to know one another—and, as was the case with the Japanese and Chinese visits, Modi’s charm was a big positive—unlike the Chinese and the Japanese, the US government is in no position to dangle cheques of any significant size before a Modi; extending the defence pact by 10 years, though, was a positive sign of the continuing engagement. US investments are essentially by the private sector, and though the Indian government has made a beginning in trying to sort out policy problems, private sector CEOs in the US have to be convinced; several of them, media reports suggest, were quite open in voicing their concerns to Modi. In other words, big US investments can come in only after US firms are convinced the government is changing things on the ground—even the Chinese and Japanese investments, it has to be pointed out, are contingent upon the government managing to get several policies right.
If big concessions were to be expected from President Obama, Modi didn’t have that much to offer either. India is in no position to put boots on the ground, probably the US’ biggest pre-occupation in the post-ISIS era. India has tied itself in knots on the nuclear liability bill, and it is for India to extricate itself from this—till then, even the agreements signed with US firms to set up nuclear power plants don’t amount to much; what has been agreed to is that both sides are going to continue to try and hammer out a solution. Some big deals involving US defence firms producing in India would have been welcome, but it is not clear whether the 49% equity level is exciting enough—perhaps if, over the year, the government is able to clear enough defence production deals, US firms may bite, but as of now, things look difficult.
On intellectual property rights, similarly, the stance of the two countries is quite dissimilar, and it would be unrealistic to expect either to change their view so suddenly. The best that can be hoped for, and this is what US interlocutors have said is the case, is that when the US conducts its out-of-cycle review of India’s IPR regime later this year, the result will just be a greater degree of dialogue and not actual sanctions. The Indian side talks of greater understanding of its WTO position by the US, but the actual test will lie in how the trade talks progress at the WTO. More progress was expected in the immigration Bill, to address Indian concerns, more so since the House of Representatives Bill is quite different from that passed by the Senate, and it is unfortunate that there were no assurances from the US side. In a nutshell, the visit was important, and in the absence of significant breakthroughs—impossible, given the very different views of both sides—the best that could be achieved was the promise to keep engaged in discussions.