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Business News/ Opinion / Online-views/  Narendra Modi the business diplomat checks in
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Narendra Modi the business diplomat checks in

If there is one theme that emerges in the walk up to Obama-Modi meeting, it is that the new political dispensation in India is distinguishing between India's business and political interests

The only problem Narendra Modi will face going into the bilateral meeting with the US will be the fact that Barack Obama is now a lame duck President. Photo: MintPremium
The only problem Narendra Modi will face going into the bilateral meeting with the US will be the fact that Barack Obama is now a lame duck President. Photo: Mint

Later this week Prime Minister Narendra Modi will leave to attend the annual United Nations jamboree. It would be his first visit as Prime Minister, but what is more interesting is that later, Modi will bilaterally engage with Barack Obama, President of the United States. It is a keenly awaited meeting, as much for the Americans and Indians as for other countries looking to get a piece of business action in emerging India.

Obama has had to wait for an audience with Modi, as the Prime Minister preferred to first focus on India’s neighbourhood—making Bhutan his first foreign port of call—and then travelled east to Japan before returning to India to welcome the leader of one of India’s two troublesome and geographically contiguous neighbours, China. Presumably, this is a strategy that would keep the US guessing, especially in the backdrop of their mea culpa on Modi’s visa status—the fact that Modi has ignored this personal slight after becoming the Prime Minister would only further confuse the Americans who are used to viewing the world linearly in terms of good or bad.

If there is one theme that emerges in the walk up to the Obama-Modi meeting, it is that the new political dispensation in India is distinguishing between India’s business and political interests. This distinction is of course far more nuanced but seems to free conversation on furthering business and economic cooperation from being hostage to political disagreements.

A similar thinking had managed the breakthrough with the US at the turn of the new millennium. Both countries focused on the doables to bring about some common ground—exactly why the momentous civil nuclear deal was struck in 2005 between Manmohan Singh and George W. Bush.

This thinking was visible, without results though, even in the dialogue with Pakistan, when the government was barely a few weeks old; another matter that internal turmoil in Pakistan nixed the scope for furthering the dialogue. It was most apparent, however, during the just-concluded visit of the Chinese President Xi Jinping.

The Chinese conveyed their reluctance to work around troublesome political baggage—a lost opportunity in my view—by forcing a confrontation along the Ladakh border even as the summit talks were on. Modi overlooked the infraction—preferring instead to make his point of view clear publicly (in front of the media) and bilaterally (rather severely)—and went ahead with a slew of business deals.

A minister summed up the substance of the dialogue as “good business, tense border".

Previously, the border issues would have held the entire discussion hostage. Clearly, peace and prosperity have been given a chance, while the trust deficit continues.

The Chinese, the smart negotiators that they are, will figure that the political power of a parliamentary majority cannot be wished away. And my guess is this is exactly the reason the Chinese took the public and private comments on the testy border situation on the chin. From the Indian point of view, by going half the distance it has also taken the first steps in changing the set pieces in global diplomacy.

An opinion poll undertaken by InstaVaani for Mint, immediately after the India-China dialogue concluded, shows people reflecting similar sentiments. About 54.3% surveyed maintained that they did not trust China, but two in three (66%) said that the partnership between the two countries would benefit the Indian economy.

Interest in the India story is rekindling. It is a no-brainer. A population of 1.25 billion and a mid-sized economy of nearly $2 trillion is looking to make the next big push for growth. And this cannot come about unless the creaky infrastructure is replaced, the skill deficit bridged and, most importantly, new financial resources are tapped. It is a once-in-a-lifetime business opportunity that cannot be ignored, especially at a moment when the rest of the world is struggling.

India on its part has to convince the world that it is committed to persisting with the transition to a rules-based regime. The trauma of retrospective taxation still haunts world business; India’s recent intervention in the ongoing negotiations of the World Trade Organization (WTO) on new rules for trade facilitation seems to have confused many (largely because of the rather biased spin given by the global media).

The only problem Modi will face going into the bilateral meeting with the US will be the fact that Obama is now a lame duck President; worse, his popularity ratings are at a tremendous low. And in the last few years, the President has done precious little to further the dialogue between the two countries—in fact, his administration is guilty of letting things drift to the point that once again relations are testy. Which only makes the case for business diplomacy that much stronger.

Anil Padmanabhan is deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com

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Published: 21 Sep 2014, 08:52 PM IST
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