• Home
• /
• Opinion

A trip tuned for trade

The much-vaunted “strategic” and “political” aspects of the Indo-US bilateral relationship took a backseat to business as President Barack Obama whizzed through India on his three-day sojourn. In fact, no sooner did the redoubtable Air Force One land amidst the whirligig of Mumbai, India’s financial capital, than Obama unfurled an agenda steeped in trade and commerce.

Even before he flew out of Washington, the US administration had made it clear that the Presidential visit would primarily be about trade relations and “how that would translate into American jobs”. So in that sense, the trip went strictly according to the script. Clearly, in the wake of a historic drubbing in the mid-term US elections, and a disconcerting 10 per cent unemployment rate back home, the beleaguered President could hardly be blamed for playing America’s salesman-in-chief.

The choice to begin his India trip with Mumbai—over Delhi, the political nucleus – was itself revealing. As was the composition of Obama’s traveling caravan where America’s chief diplomat, Secretary of State of State Hillary Clinton, and an old India friend, was conspicuous by her absence while commerce secretary Gary Locke was on board.

Obama had also brought along with him the largest American business delegation ever to have accompanied a US president to a foreign country. A 200-plus star constellation of American business leaders and giants of the corporate world including Jeffrey Immelt of General Electric, Jim McNerney of Boeing Co, David Cote of Honeywell International Inc’s and Indian American Indra Nooyi, the CEO of Pepsico Inc.

On day one itself, the President addressed three marathon gatherings at the US-India Business and Entrepreneurship Summit in Mumbai attended by Indian corporate tsars like Ratan Tata, Rahul Bajaj, Anil and Mukesh Ambani and Anand Mahindra, to name a few.

Obama’s charm offensive at the summits paid rich dividends as American companies snagged a raft of landmark deals worth $10 billion on day one. The contracts—in areas as diverse as agriculture, clean energy, defense and infrastructure—include a $ 2-billion equipment order from the Anil Ambani Group firm Reliance Power and the purchase of 30 Boeing 737 aircraft by low-cost carrier SpiceJet. Reliance Power has also announced a deal to secure $ 5 billion in funding from the US Export Import Bank for gas-based and renewable energy projects totaling about 9,000 MW.

In addition, new business was promised for Harley Davidson, Duke Medicine of Durham, and Bell Helicopter. While these big ticket deals were like oxygen for a gasping American economy, for Obama the real deal was that they would have a multiplier effect by creating 54,000 new jobs for Americans who are staring at a shortfall of 300,000 new jobs.

Obama dubbed India as the “creator” and not a “poacher” of US jobs and iterated that the Indo-US relationship had evolved to a stage where India was “creating jobs, growth, and higher living standards in both our countries.”

Be that as it may, the irony in the American premier’s comments was unmistakable. In the not too distant past, Obama had unleashed a strident anti-outsourcing rhetoric against US companies who were farming out back office jobs to low-cost countries like India. But now, in a remarkable volte face, Obama was looking upon India as a “job creator” for an embattled America!

The President also announced important trade reforms that removed from a restricted list three of India’s remaining four defense and space entities—the Indian Space Research Organisation, the Defense Research & Development Organisation and the Bharat Dynamics. This move, predict industry experts, will give India’s space and missile programmes access to cutting-edge technology while simultaneously opening up India’s multi-billion dollar high-tech market to US manufacturers of dual-use technology.

However, despite doing phenomenal business on Indian shores, Obama was quick to iterate that America’s economic relations with India have untapped potential. India, he iterated, was America’s 12^th largest trade partner while The Netherlands, with a “smaller population than Mumbai”, was far bigger. Compared to China too, India’s exports to the US are a mere fraction of the Chinese exports, which total a phenomenal $ 229.2 billion.

With the salience accorded to economic ties by Obama on his trip, analysts estimate that trade will henceforth occupy center stage in the Indo-US bilateral relationship and change its dynamic forever. Never mind if Obama’s overt focus on business during this trip is also reflective of “the erosion of US’ global economic standing”.

In fact, policy makers admit anonymously that erstwhile American presidents would never have dabbled in commerce as unabashedly as Obama did on his India trip. Such matters, they concede, are usually left to the White House’s commerce department. On the contrary, Obama was so direct in his approach to business in India that he could well have been mistaken as the leader of a trade delegation!

Not that this is a bad thing. Commercial synergy between India and the United States has given an added ballast to the bilateral relationship in the past. Exports of US goods to India have already quadrupled over the last seven years to about $ 17 billion while exports of services have tripled to about $ 10 billion a year. The duo’s fast-growing economic relationship has been a mutually advantageous one as Indian companies are the second fastest-growing investors in the US.

Playing benefactor for a change has been good for India’s ego too. Until now, the country has only had its hand outstretched for aid, technology and capital. Its image as the “dynamic creator of jobs” and income opportunities for a global superpower, is indeed a refreshingly different one. And President Barack Obama’s visit brought home this new truth in unambiguous terms.

Neeta Lal is a New Delhi-based 
senior journalist