A visit that builds on what was already very good rapport.
Indian Prime Minister Modi’s visit to Washington earlier this week was more than his symbolic bear hug of President Trump in the Rose Garden. But there did not need to be a breakthrough with the sartorial prime minister, because India and the U.S. have already broken through.
Given all the press hype about H1-B visas for Indians in the U.S., climate policy, and trade, one could naively think the visit would be adversarial. Mainstream media did their best to create doubt and divisiveness. Their message was fixated on differences — and not on the strategic ties that connect us. An observer might have concluded that India-U.S. relations are caustic indeed. But this is not the case.
It so happens that relations with the Republic of India are one of the few success stories of American foreign policy in recent years. They have been excellent since Bush 43 and the signing of the U.S.-India nuclear deal in 2008, which fosters collaboration in science and technology well beyond the construction of civilian nuclear facilities. Further, there are now maritime cooperation agreements in place that permit the use of naval bases and the sharing of intelligence and proprietary information. Boeing and Lockheed Martin are leading examples of collaboration in the aerospace and defense sector, with plans for production of the F/A-18 Super Hornet and the F-16 Fighting Falcon. Further, on the day of Modi’s visit, the U.S. approved the sale to India of 22 non-weaponized UAVs made by General Atomics.
India has had many years to prepare for a more stringent U.S. position on H1-B visas, of which 70% reportedly are held by Indian nationals. During FY 2017, over 85,000 were issued in total. As the impassioned debate over the merits of globalization continues, it is fair to say that Trump is committed to restoring American jobs, and his position on this aspect of immigration is quite predictable. Surely the Government of India would have a similar view if 60,000 American expatriates were deployed in low to mid level IT jobs in Bangalore.
Leading business process outsourcing firms Infosys, Tata Consultancy Services, and Wipro knew for a decade about this challenge, as various bills to limit such visas were examined by Congress. Consequently, these strategically directed blue chip companies should be expected to have contingency plans. Further, while Nandan Nilekani, co-founder of the business process outsourcing firm Infosys, laments the position of the Trump Administration, he also believes it will ultimately be to India’s benefit as more IT professionals will remain in India.
With regard to climate change, India is fundamentally a coal-fired economy for the production of electricity, with about 60% of its power derived from this source. However, the pace of deployment of clean energy projects has been rapid, with India already achieving 22% of its aggressive 2022 goal of 175 GW capacity from renewables — of which 100 GW is solar. Of special note, and as I have recently written in these pages, this GW capacity is estimated to be equivalent to the entire electricity output of Germany. Although India is the fourth largest emitter of greenhouses gases in the world, when per capita measurement is used, it ranks tenth.
The U.S. has an annual trade deficit (goods and services) with India estimated at $31 billion for 2016. As a comparison, Mexico was about $56 billion and China $310 billion for the same period — these are estimates of the Office of the U.S. Trade Representative. The Confederation of Indian Industry advises that from 2011-2015, India’s share of the U.S trade deficit was only 2.5%; various other countries ranked higher. Market access, tariffs, competition, and bureaucracy all need to be looked at; however, it is fair to say that trade policy is not a lead elephant in the parade.
There are other operating issues with differences such as retrospective tax policy, airline safety, drug adulteration, IP protection, and censorship. However, both countries need to stay on point with respect to three strategic issues of mutual importance: the ascent of China, vulnerability to Islamist jihad, and foreign direct investment.
Recent media efforts to accentuate differences over visas, climate change, and trade are by no means so-called fake news. But they are fake emphases.