A promising visit

John Kerry lobs the ball in India's court

United States Secretary of State John Kerry, on his first visit to India since assuming office, did well to assuage his host's concerns regarding the Afghanistan-Pakistan situation by referring to the "red lines" the US expects the Taliban not to cross, which include renouncing violence. India had reason to be worried about the current talks between the US and the Taliban as a prelude to the former's planned withdrawal from Afghanistan next year. Much as India may want to highlight its strategic interests in Afghanistan and the grievous losses it continues to suffer due to cross-border terrorism, it is not a front-line state as far as the US is concerned and so its views may have less purchase than those of Pakistan. The discussions also nudged along the done deal on nuclear co-operation where progress appears to be slower than expected, by stressing the proposed joint venture between Westinghouse and the Nuclear Power Corporation of India.  

China's shadow always looms large in all discussions of Indo-US relations. Growth is not the only domain where India has lost out to China. Despite President Barack Obama's soothing whispers about the strategic Asian partnership with India, China is the number one partner of the US not just in Asia but globally in strategic and economic issues. Hard-headed realism should tell India to concentrate instead on where its strength lies; in former president Bill Clinton's memorable words, "the economy, stupid!" For India, the bilateral trade and investment issues on which Mr Kerry and India's External Affairs Minister Salman Khurshid seem to have dwelt are perhaps the best takeaway from this visit. India must not worry overly about the immediate matter of work permits for Indian IT personnel. The bite of the US immigration reform Bill expected to be passed later this summer may not be as bad as its bark, since it proposes to more than double the limit on H-1B visas to 195,000 even as companies - mostly Indian - that primarily depend on such employees will be penalised.

The US clearly sees India as a possible partner in developing human resources as well as a trade source and investment destination with improved policy parameters. This was evident from Mr Kerry's invitation to top Indian economic policy makers, including Finance Minister P Chidambaram and Commerce Minister Anand Sharma, to a CEOs' forum in Washington next month. India should capitalise on this desire both in the short and medium terms. It must exploit fully the opportunity offered by the falling rupee in furthering the already strong areas of IT and outsourcing trade, taking care not to ruffle American feathers by claiming these as its natural rights. It must continue to develop niches in the areas of manufacturing exports, such as components and sub-assemblies in automotive industry, as has been successfully done by some leading Indian firms. But confidence-building mechanisms for greater investment in India remain the real challenge. That requires addressing specific concerns of interested firms such as simplified, timely and transparent decision making as well as equitable settlement of disputes. The devil, as the proverb goes, is in the details.