Unlikely to be as friendly towards India as the previous administration.
“Change has come to America,” said US President-elect Barack Obama in his victory speech at Chicago on November 4 last year.
After his presidential inauguration on January 20, what will be the nature of the “change” for ties between the US and India? India’s Ambassador to the US Ronen Sen has sent an assessment report to the Ministry of External Affairs, noting that the incoming administration may not be as friendly as the previous administration.
The global financial crisis cast a cloud over the US election campaign in 2008. Promising change, first at home, was Obama’s main campaign plank. This included stopping the flight of “US jobs” abroad due to the outsourcing industry and protecting US businesses.
Here are some issues that will have a direct bearing on the Indo-US ties in the future:
Outsourcing: During his campaign, Obama’s prescription to combat job losses due to outsourcing was to withhold tax breaks to companies that ship jobs overseas. India’s software and services exports were nearly $40 billion during FY08, with the US as its largest market.
However, former US Secretary of State Madeline Albright, who was Obama’s representative at the G-20 summit held in November 2008, told Planning Commission Deputy Chairman Montek Singh Ahluwalia that outsourcing would not be on Obama’s immediate agenda.
Immigration: Obama’s focus is on preserving jobs for US citizens and to this end, he is against companies “gaming” the system to secure visas for employees.
Indians, especially those with H1B or L1 visas, contribute an estimated $2 billion to the US social security every year, but do not get benefits since India and the US do not have a “totalisation agreement”. After two rounds of talks to sign such an agreement, the Ministry of Overseas Affairs officials are scheduled to meet US officials again this year.
During the US-India Information and Communications Technologies Working Group meeting in December 2008, India sought “an increase in the number of non-immigrant visas; prevent passing of legislation that will prevent companies from applying for visas or increase bottlenecks for applications; expedite the visa process; and finally, revisit Indian quotas to reflect market realities”.
India Inc is confident that any drastic changes in the immigration policy would not affect skilled Indian workers as the pressing concern for the US is to fix the immigration bureaucracy and meet the demand for jobs that employers cannot fill.
Trade and labour issues: The Obama administration will give far greater attention to labour standards, according to a senior Indian bureaucrat. Along with the special safeguards mechanism in agriculture for developing countries that wrecked the Doha Round negotiations in Geneva last year, labour issues will complicate matters for developing countries like India at the WTO.
Commerce Minister Kamal Nath’s statement that “revival of the weakest” and “not the survival of the fittest” must be considered during the WTO negotiations could be used by the developed countries like the US to continue subsidising their constituents.
South Asian politics and nuclear non-proliferation: Obama has made it very clear that he would shift focus from Iraq to Afghanistan and Pakistan. With its gaze fixed on the Taliban and the Pakistan-Afghanistan border, India is the elephant in the room for the Obama administration. Strategic affairs expert K Subrahmanyam has said South Asia is not Obama’s primary interest and the US policy will be based on “Obama’s developing familiarity with political realities in South Asia”.
While the strategic partnership between India and the US is cemented, this is not the case with Pakistan. But New Delhi should not assume the US will continue to support Pakistan forever, according to Subrahmanyam. US Secretary of State Hillary Clinton, during her Senate confirmation hearing last week, said: “We (US) should also lay the groundwork for ratification of the Comprehensive Test Ban Treaty (CTBT).” Clearly, the Democratic dispensation will put CTBT back on the global non-proliferation agenda. However, External Affairs Minister Pranab Mukherjee said last week that India would not sign the CTBT.
