New Delhi: India and the US played hardball on key issues during their second strategic dialogue on Tuesday, the first high-level contact after President Barack Obama’s visit to the country in November.
After the initial honeymoon period, the two countries are now taking up meatier issues, many of which are contentious.
The American delegation, which was led by US secretary of state Hillary Clinton, who arrived on Monday, pressed India to amend its domestic nuclear liability laws in conformity with international norms and reduce trade barriers to allow US firms better market access. Similarly, India singled out its concern over visa restrictions in the US that were beginning to hurt Indian software companies.
In an indication of growing maturity of the still-young bilateral relationship, both countries differed on key issues, but preferred instead to focus on the positives, and signed pacts on bilateral aviation safety and cyber security that will boost counterterrorism cooperation.
Once known as estranged democracies, ties between India and the US have been on the upswing in the past decade, with three US presidents—Bill Clinton, George W. Bush and Obama—visiting the country since 2000.
Three US presidents had visited India in the five decades preceding that.
Describing the talks with external affairs minister S.M. Krishna as “productive”, Clinton highlighted three issues: trade and investment, security cooperation, and civil nuclear cooperation relating to the landmark 2008 civil nuclear deal signed by India and the US that enabled India to buy atomic power plants, technology and fuel from the global market after a gap of more than three decades.
“India and the US can take further steps to reduce barriers, open markets and encourage new partnerships, jobs and opportunities for millions of our people,” said Clinton. The issue of opening up India’s financial, insurance and retail markets was an issue that also came up at Clinton’s meeting with finance minister Pranab Mukherjee on Tuesday.
“From the American side, the focus (of the visit) was on economic partnership. They want to use the strategic platform to get greater market access to India and encourage India to move towards the second generation of economic reforms,” said Kanwal Sibal, a former Indian foreign secretary.
On security, Clinton said both sides were continuously “deepening” and “expanding” efforts in counterterrorism. She reiterated her country’s zero tolerance to terrorism and made it clear that the US was not willing to give a “pass” to any terrorist operating out of Pakistan. The US recently carried out an operation inside Pakistan and killed Osama bin Laden in his hideout outside Islamabad.
But when asked about Pakistan dragging its feet on bringing to justice the perpetrators of the 2008 Mumbai attacks, Clinton said: “Obviously there is a limit to what both the US and India can do, but we intend to continue to press as hard as possible.” The attacks killed 166 people, including six Americans.
Extending bilateral defence deals, non-existent till a few years ago but now worth $8 billion (around Rs35,700 crore), would also help India meet its security challenges, she said.
Clinton also promised that the US was committed to the 2008 India-US pact as she reassured India that the recent tightening of rules by the Nuclear Suppliers Group (NSG), the body that controls global atomic commerce, would not jeopardize the agreement that gives exceptional status to India, which is not a signatory to the Nuclear Non-Proliferation Treaty (NPT).
India has been concerned about the fallout of the 24 June vote by NSG that curtails access of key technology, including enrichment and reprocessing, to countries that have not signed NPT.
Clinton urged India to bring its domestic law, which calls for a high penalty on suppliers rather than operators of atomic power plants in case of a nuclear accident, in conformity with the international Convention on Supplementary Compensation (CSC).
“We are looking forward to India ratifying the CSC for nuclear damage before the end of this year... 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.
India’s nuclear liability law has made it difficult for US firms such as General Electric Co. to enter the country’s estimated $150 billion nuclear power market.
In his comments, Krishna said India and the US had agreed to resume negotiations on a bilateral investment treaty. “I also took the opportunity to convey to Clinton the concerns of our IT (information technology) companies in sending their professionals to execute projects and conduct business in the US. I highlighted that Indian IT companies are contributing to the US economy through investments, employment and supporting US competitiveness,” he said, referring to the US increasing the visa fees for those in the IT sector.
Krishna also added that he had requested Clinton to consider a totalization agreement that will allow Indian workers to repatriate their payments under the social security scheme. Currently, they forfeit it.
Clinton also briefed India on US plans to complete its troop withdrawal from Afghanistan by 2014. Krishna on his part urged the US to consider the “ground realities” in Afghanistan, where a resurgent Taliban has been making considerable inroads. “We have impressed on the US and other countries, who have a major presence in Afghanistan, that it is necessary for them to continue in Afghanistan,” Krishna added.
“I would call the strategic dialogue of today a high-level review. Neither of us are coming to the table with expectations, (which) if not accepted by the other side, one would feel disappointed. There is nothing make or break in this dialogue. It shows a maturing of India-US ties,” said Lalit Mansingh, India’s former ambassador to the US.