US Secretary of State Hillary Clinton urged India to further open its markets to US companies, reduce protectionist barriers and speed up the purchase of its military technology and equipment, even as Indian officials speaking on the condition of anonymity pointed to the “extraordinary clarity of the conversation” between the two sides.
The frank exchange was dominated by the state of play in the Afghanistan-Pakistan region, with the US side admitting the situation there was so grave because of the “continued selectivity” with which the Pakistani leadership continued to deal with the problem of terrorism. Iran was not mentioned in the conversation at all.
External affairs minister S M Krishna, who spoke for 12 long minutes in his opening remarks – Clinton spoke for around five minutes – also took the opportunity to test the growing trust by seeking redressal of the Indian software community’s frustration over the reduced number of H1-B visas, as well as the accumulated $1 billion in social security that Indian software professionals were forced to pay when they worked in the US.
Clinton is believed to have heard Krishna’s complaint. She said she would address these soon, although with the US economy in dire straits, it is unclear how she plans to handle the politically sensitive issue of outsourcing jobs and funds transfers. With as many as 500,000 Indian software engineers now paying $1 billion over seven years in social security, and no channels available for its reparation to India, Delhi’s demand for a “totalisation agreement” which enables this transfer could now gather strength.
A joint statement issued at the end of the Delhi leg of Clinton’s three-day visit, which also takes her to Chennai tomorrow, spoke of the growing menu between the two sides, ranging from a civil aviation safety agreement to women’s empowerment, via greater cooperation in Afghanistan.
But the overwhelming sense of Clinton’s visit came from her several public pleas to India to keep its side of the bargain with America. Clinton repeatedly pointed out that by pushing through the Indo-US civil nuclear energy agreement, the US had undertaken the kind of heavy lifting with India it had only earlier attempted with close allies like Japan.
For example, Clinton urged the government to ratify the Convention on Supplementary Compensation for nuclear damage by the end of the year and make India’s domestic nuclear liability laws consonant with the International Atomic Energy Agency. Analysts said she hoped, thereby, to create the space to allow US nuclear industry to reopen nuclear commerce with India.
Analysts pointed out that US nuclear giants like GE and Westinghouse, who were intending to participating in India’s nuclear energy sector after the passage of the civil nuclear agreement, had been holding back on its plans because of the clause in India’s liability law that sought to transfer liability to the company which had sold the equipment. Over the next 15 years, according to Reuters, India’s nuclear energy market could touch $150 billion.
“We need to resolve those issues that still remain so that we can reap the rewards of the extraordinary work that both of our governments have done,” Clinton said in the press conference, with Krishna by her side.
However, if India’s domestic law prevented the US nuclear industry from reaping part of the profits generated by the opening up of India’s nuclear energy sector, Delhi could look at opening other avenues to financially benefit America, Clinton implied.
Apart from opening its markets and reducing protectionist barriers, India could pursue military-to-military cooperation and technology sales, she indicated. Moreover, as India has chosen to knock out the two US fighter jets bidding for India’s $10.6 billion fighter jet contract, speculation is rife that the US could now offer the F-35 to India to buy as a fifth-generation aircraft.
In fact, even cooperation in counter-terrorism seems to have a financial aspect, as India spends a considerable amount of its $400 million budget on homeland security on buying equipment from the US.
Still, with both sides unable to concentrate their minds on one big project, like the civil nuclear deal, analysts said a common understanding between India and the US on the Af-Pak region was commendable.
Saying Pakistan remained a “key ally” in the US fight against terror, Clinton complimented India for maintaining a dialogue with Pakistan so that both countries could keep the rhetoric low even as they dealt with terrorist incidents.
She noted she had sought to impress upon Islamabad that it needed to fight terrorism on its “own behalf’ and that while the US “had made clear that (it) wanted a long-term relationship with Pakistan, (we) cannot tolerate safe havens for terrorists anywhere.”
