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Business News/ Politics / Policy/  India, US draw up blueprint to work around differences
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India, US draw up blueprint to work around differences

A joint statement by Narendra Modi and Barack Obama emphasizes the importance the leaders attach to bilateral ties between India and the US

The joint statement by Prime Minister Narendra Modi and US President Barack Obama stressed the economic aspect and trade ties in the relationship. Photo: PTIPremium
The joint statement by Prime Minister Narendra Modi and US President Barack Obama stressed the economic aspect and trade ties in the relationship. Photo: PTI

India and the US have drawn up a blueprint to work around their differences and breathe new life into strategic ties once described by President Barack Obama as one of the defining partnerships of the 21st century.

Obama recognized that India’s “rise as a friend and partner is in the US’s interest" and Prime Minister Narendra Modi “emphasized the priority India accords to its partnership with the US", said a joint statement issued after the latter’s visit to Washington on the second leg of a five-day trip to the US.

The statement described the US as a principal partner “in the realization of India’s rise as a responsible, influential world power".

Modi’s visit to the US, his first as Prime Minister, was aimed at getting to know Obama and reinvigorating a relationship that has cooled in recent years mainly because of friction in trade and economic ties. During his visit, Modi met chief executives of 11 US corporations for breakfast to court investments, particularly in manufacturing.

The joint statement stressed the economic aspect of the relationship. With two-way trade clocking fivefold growth since 2001 to nearly $100 billion in 2013-14, both leaders decided to initiate steps that would boost trade by another fivefold, the statement said, without mentioning a timeline.

Modi and Obama “committed to work through the Trade Policy Forum to promote a business environment attractive for companies to invest and manufacture in India and in the US", it said.

“In order to raise investment by institutional investors and corporate entities, the leaders pledged to establish an Indo-US investment initiative led by the ministry of finance and the department of treasury, with special focus on capital market development and financing of infrastructure," the statement said.

There will be talks early next year under the aegis of the commercial dialogue on “new areas of cooperation, including innovation in advanced manufacturing," the statement said. Obama supported the Modi government’s plan to skill young Indians for the global workforce and as entrepreneurs “through new partnerships to share expertise and global standards for skill development in India, including by reinvigorating the higher education dialogue," it said.

American firms would be the “lead partner" in developing smart cities in Ajmer, Visakhapatnam and Allahabad, the statement said. India would be hosting two US trade missions next year focused on meeting India’s infrastructure needs with US technology and services, the statement said.

Modi was on his first visit to the US in nine years and it came nearly four months after the US revoked a visa ban in place since 2005 against Modi for allegedly failing to control riots that killed more than 1,000 people, mainly Muslims, in Gujarat in 2002 when he was chief minister of the state.

During his two-day stay in Washington, Modi met Obama twice. After the official talks, Obama told reporters he was impressed by Modi’s interest in addressing poverty and growing India’s economy, as well as his determination that India should help bring about peace and security in the world.

“I want to wish him luck in what I’m sure will be a challenging but always interesting tenure as Prime Minister," Obama said. Modi, on his part, noted that India and the US already have the foundation of a strong partnership. “We now have to revive the momentum and ensure that we get the best out of it for our people and for the world," he said.

In a unique departure from protocol, Obama took Modi on a short motorcade drive from the White House to the memorial honouring slain US civil rights leader Martin Luther King Jr.

From the look of things, “Modi seems to developed a working chemistry with Obama" and “both sides seem to have worked out a way to get the India-US relations out of stagnation", said Uma Purushothaman, a fellow at the New Delhi-based Observer Foundation think tank.

She was referring to differences across the expanse of ties that have stressed the India-US relationship. The latest irritant surfaced in July over the trade facilitation agreement (TFA) under the World Trade Organization (WTO) when India demanded that the TFA be accompanied by a parallel agreement giving it more leeway to subsidize and stockpile food than allowed by the WTO.

On regional issues, both countries expressed concern over the threat posed by terrorism by groups such as the Islamic State of Iraq and the Levant in West Asia and others like Pakistan-based Lashkar-e-Taiba, Jaish-e-Mohammad and the Haqqani network.

“The Prime Minister and the President reaffirmed their shared interest in preserving regional peace and stability, which are critical to the Asia Pacific region’s continued prosperity," the statement said.

Without naming China—whom the US considers a strategic rival and with which India has an unsettled boundary dispute—the statement said Modi and Obama “expressed concern about rising tensions over maritime territorial disputes, and affirmed the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea." The reference was to China imposing restrictions on air and shipping links through waters it considers disputed with its neighbours such as Vietnam and the Philippines.

Reuters contributed to this story.

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Published: 02 Oct 2014, 12:23 AM IST
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