Happy Republic Day India and the US took their civil nuclear deal forward on Sunday, potentially opening up a market worth billions of dollars to US companies, and giving India access to important technology in another sign of the warming relationship between the two countries. The operational details of the nuclear agreement are yet to be worked out. The two countries also agreed to partner in the development and production of defence equipment and renewed their bilateral defence agreement that is expiring this year. The developments came on Day 1 of US President Barack Obama’s visit to India. On Day 2, President Obama will be the chief guest at the Republic Day celebrations, the first time a US head of state will attend the 26 January parade. The visit is significant for both countries, say analysts. The US would like its companies to have access to India’s huge market and also forge a relationship to counter China’s growing influence. India, which is trying to revive its economy, would like investments and technology from the US. The relationship between the two countries has ranged from indifferent to acrimonious in the past. There was, however, no talk on Sunday of India agreeing to a climate deal of the kind China signed with the US recently. In a joint statement, the two countries also agreed to expand cooperation in the Asia-Pacific region, implicitly sending a warning to China, which has been increasingly asserting itself in the region. In a first, India and the US agreed to set up a hotline between the Indian Prime Minister and the US President, as well as another one between the national security advisers of the two countries. Both sides also agreed to increase the frequency of their summit meetings to ensure the “critical partnership” gets a “a new thrust and sustained attention”—in Narendra Modi’s words. There was also a declaration of friendship between the two countries, as well as a shared vision document for cooperation in the Asia- Pacific and Indian Ocean regions. Modi acknowledged that he and Obama had established a rapport. “I can say that relations between countries depend less upon full-stops and commas and more between the relationships between the leaders, the openness; how much they know each other; and the chemistry between them— this matters more and is very important,” Modi said. Obama arrived in New Delhi on Sunday morning on his second bilateral visit to India of his presidency. Obama was welcomed by Modi at the airport with a warm hug that seemed to set the tone for the interaction between the two leaders later in the day. The two leaders met twice without aides and also went in for delegation-level talks over lunch. Modi later described Obama’s second visit and acceptance of his invitation to be the chief guest at India’s Republic Day celebrations as indicative of the “transformation” of the India-US relationship. “It tells us that our two nations are prepared to step forward firmly to accept the responsibility of this global partnership—for our two countries and for shaping the character of this century,” Modi told reporters adding the India-US relationship was a “natural global partnership” that “is needed even more in our world of far-reaching changes and widespread turmoil”. Obama shared similar sentiments in his comments to reporters, describing India as “critical for America’s success in the 20th century”. An India-US Delhi Declaration of Friendship noted that mirroring the close ties between the two countries, “India and the United States agree to elevate our long-standing strategic partnership, with a Declaration of Friendship that strengthens and expands the relationship between our two countries.” As part of the declaration, India and the US committed to elevate their strategic dialogue to a “Strategic and Commercial Dialogue”, reflecting the commitment of both sides to “strengthen commercial and economic ties to advance mutual prosperity, regional economic growth and stability”, a text put out by the Indian foreign ministry said. It also involves “meaningful security and effective counter-terrorism cooperation.” On the hurdles impeding the operationalization of the 2008 civil nuclear agreement, Modi said both sides were moving “towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability”. The pact signed in October 2008 has not yielded any contracts for American companies despite the fact that it was the US’s efforts that resulted in overturning a 34-year-old embargo against India that barred the country from sourcing nuclear plants and technology from the international market. American suppliers were wary of entering the Indian market given that India’s 2010 nuclear liability law puts the onus on suppliers rather than operators in the event of an accident. During Modi’s visit to Washington in September, the two countries decided to establish a contact group that would break the logjam. The group, which met earlier this week in London, agreed that India would create an “insurance pool” to hand out compensation in the event of a nuclear accident. The companies putting money into the kitty include India’s state- run insurer General Insurance Corp. of India and four other public sector undertakings, said Amandeep Singh Gill, joint secretary for disarmament in the Indian foreign ministry. “These companies put together contribute Rs.750 crore to the insurance pool and the balance would be contributed by the government on a tapering basis. This is the general shape of the pool”—similar to 26 such mechanisms existing globally, Gill said. Obama on his part described the removal of impediments in the way of commercializing the deal as a “breakthrough” understanding on two issues that were holding up our ability to advance our civil nuclear cooperation. “The impact of this Delhi breakthrough on the nuclear issue will re-energize and reset the moribund India-US bilateral relationship and this will in all likelihood have a beneficial ripple effect on all the other issues that are awaiting traction during the current Obama visit,” said Uday Bhaskar, a strategic analyst with the Society for Policy Studies think tank in New Delhi. Indian companies welcomed the breakthrough in civil nuclear cooperation. “We are happy to know that an agreement has been announced between the Indian and US governments on the contentious issue of civil nuclear liability,” said M.V. Kotwal, director and president of heavy engineering at Larsen and Toubro Ltd. “Although details would need to be studied, I feel confident that, given the strong emphasis placed by our government on ‘Make in India’, the interests of all stakeholders, including domestic industries, which have been steadfastly supporting India’s own nuclear programme, will be adequately addressed,” he said in an emailed statement. On defence co-development and co- production, India will manufacture Raven drones in the country, foreign secretary Sujatha Singh told reporters at a briefing. This was among four projects that will be taken up as pilots for co-production and co-development, she said. A joint statement released on the occasion said both sides had agreed to “form a working group to explore aircraft carrier technology sharing and design, and explore possible cooperation on development of jet engine technology”. On trade and economic relations, India and the US agreed to negotiate a bilateral investment treaty as Obama lauded Modi for the steps he has put in place to revive the Indian economy. Obama and Modi “affirmed their shared commitment to facilitating increased bilateral investment flows and fostering an open and predictable climate for investment”, the joint statement said. In the area of clean energy and climate change, Obama said the US would finance solar power projects in India. The two countries also released a joint strategic vision for the Asia-Pacific and Indian Ocean regions given that the two nations were the world’s largest democracies “bridging the Asia-Pacific and Indian Ocean region” and “reflecting our agreement that a closer partnership between the United States and India is indispensable to promoting peace, prosperity and stability in those regions”. “India and the United States are important drivers of regional and global growth. From Africa to East Asia, we will build on our partnership to support sustainable, inclusive development, and increased regional connectivity by collaborating with other interested partners to address poverty and support broad-based prosperity,” it said. India has been strengthening economic and strategic ties with many South-East Asian nations while the US has announced plans to re-focus its attention to the region after the Iraq and Afghan wars. In an oblique reference to China and its recent territorial disputes with its neighbours in the South China sea, the vision statement said that both countries affirmed the “importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea”.
Posted on: Mon, 26 Jan 2015 07:03:04 +0000
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