Why Obama Coming ?

by Harish Gupta, National Editor, Lokmat Group

For Prime Minister Narendra Modi, it is no mean an achievement to get US President Barack Obama as chief guest at the Republic Day parade next Monday. The parade, with its procession of tableaux representing features of states and region, is a colourful tribute to India’s cultural diversity, which, in its turn, is the centerpiece of the Constitution which was born on this day.

But the military overtone of the show, with tanks rolling down the capital’s Rajpath and fighter planes streaking, gave it an unmistakable cold war-stamp that would have made the presence of a US president strike a jarring note. While British and French prime ministers had occupied the chair next to the Indian prime minister, that too more than once each, and Japan’s Shinzo Abe sat there last year, there was no US president to witness the pageantry atop Raisina Hill on a chilly January morning. But this year President Obama obviously found the charm of Modi, and a changing India, irresistible.

His presence will obviously break the heart of Pakistan’s rulers, its military in particular. Having been used to thinking of itself as America’s ‘special’ ally, till the ‘war on terror’ began, and it was caught two-timing, with Osama bin Laden found and killed by the US Navy in its own backyard, Pakistan has been surly at each time India and the US get close. President Obama’s presence at the Republic Day parade in Delhi will therefore have a shock value which Islamabad may find hard to absorb.

From across the Himalayas to the north, however, China is far too self-confident to read too much meaning into the US President’s presence at the Indian celebration, however significant it is for its novelty. Though Modi is critical of the late Jawaharlal Nehru and his legacy, he seems to be an ardent follower of non-alignment, which was the bedrock of Nehru’s foreign policy. China’s official publication People’s Daily noted it first when, in an article last October, it noted India’s “rootedness” in its “non-aligned culture”. China has noted the caution in Modi’s steps during his visit last year to Japan where he signed plenty of business deals but managed to put on ice a security agreement that threatened China. Nor is there apprehension in Beijing that India may join the US’s current “rebalancing” exercise in Asia, mainly to contain China. It will involve stationing 40,000 US soldiers in Japan and 28,500 in South Korea, apart from a spectacular American naval presence in Australia. But China will surely watch the solidification of US-India economic ties which were full of promises till 2008 but started waffling since then. That is when Republican President George W. Bush bade goodbye to White House and his Indian counterpart, Dr. Manmohan Singh, saw his power declining  in the political calculus of his own party, the Congress.

Modi is not an ideologue like his

predecessors. He means business, like the US

Obama began with a perception of India totally different from that of Bush. It was a domestically bred perception, arising out of the worst recession to hit America after 1930. It saw, between February 2008 and February 2010, GDP of the US shrinking 5.1 per cent and 8.3 million jobs lost. Riding to presidency as a champion of those who’d lost out due to turbulence in the economy, Obama launched a virtual crusade against “outsourcing” of American jobs. Eventually the term “outsourcing” became a code for India as the new President kept repeating the word ‘Bangalore’ in almost all his anti-outsourcing speeches. To come with the Presidential jibe was a series of tweaks in tax laws that made outsourcing increasingly costly, and hardening of visa rules making temporary work visas difficult to obtain. In 2008, the US had gone out of its way to help India frame its civil-nuclear law despite being a non-signatory to NPT, considered a basic requirement to obtain global nod for publicly pursuing even a developmental nuclear agenda. But soon the two countries ceased to be on the same page and the law became a dead letter, with no push coming from Washington to suppliers of either nuclear power plant equipment or the fuel, enriched uranium, for helping India. The US of course did not allow its indifference to India to border on hostility. But falling orders from US firms surely arrested the growth of India’s IT industry, which, in its turn, stymied hopes of a salaried middle class becoming India’s engine of growth.

There were new hopes on the horizon with Modi coming to power in India. Modi was earlier held in distrust in Capitol Hill due to his suspected failure to stanch the 2002 communal violence in Gujarat. After he became Prime Minister, though, the pragmatic policy planners of Washington soon discovered that Modi is not an ideologue like a long line of past Indian leaders. On the other hand, he means business, like the US.

No wonder, therefore, that immediately after the parade on January 26, Obama and Modi will rush to a CEO’s meet jointly sponsored by their governments. There is still another businessmen’s meet on the card before Obama and Michelle, the first lady, fly back home. Beyond the optics that come with the US President visiting a foreign country, the course of the future Indo-US relations will be set by the joint business ties that emerge out of these meetings. Its contours were in fact drawn by the two leaders in September last when Modi visited Washington.

For President Obama, the Delhi visit may be an occasion to admit that damning “outsourcing” was more a campaign rhetoric than an honest grouse for the largest US outsourcing,  of virtually the entire manufacturing industry, had taken place to China. And there was hardly anything that America could do to reverse it as long as China was successful in keeping labour and other inputs cost down.

But, with wages spiraling and input cost edging upwards,  the ‘China advantage’ may not last long. Foreign businesses in China have already begun moving across in the neighbourhood, to Cambodia and Vietnam. But India is the best natural option. It has history and demography on its side. It is the best candidate to become the “workshop of the world Version 2.0”, after China retires into the affluence of doing things for itself, like Japan or Taiwan, rather than sweating it out for an American boss. India can replace China in its present role provided it finds a leadership that can create a skilled workforce, offer infrastructure and keep protests—a by-product of democracy—within control.

Looking at Modi, Obama is wondering if the guy can!

(The author is

National Editor,

Lokmat group)