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PM Modi in US, take two

As PM returns to American shores, his US agenda creates a simultaneous domestic economic reform agenda.

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A year after decisively resetting US-India ties and setting a new rockstar bar for community outreach in New York, Indian Prime Minister Narendra Modi’s current US visit stands to bring expectations back down to Earth. Most of his visit will be focused on the UN, outreach to Silicon Valley’s Indian diaspora and to American business leaders. But the multilateral agenda is complicated and slow-moving; so are India’s economic reforms, which hold the key to attracting further business and investment. From the Modi agenda in the US, then, look not for big breakthroughs, but for incremental progress on issues important to both New Delhi and Washington.

Last September, Modi’s US visit received a stratospheric level of attention. His Madison Square Garden homecoming by the Indian-American community was charged with excitement. The Modi-Barack Obama summit in Washington, with a symbolic stroll around the Martin Luther King Jr memorial, begat a bromance and resulted in the joint declaration of an Indo-US “vision statement”. A mere four months later, the bonhomie continued when Modi offered a precedent-breaking invitation to Obama to be the first-ever American chief guest at India’s Republic Day. That summit resulted in an important “Delhi Declaration of Friendship” and a “Joint Strategic Vision for the Indian Ocean and the Asia Pacific Region”.

It’s hard to see “Modi in the US”, take two, match the level of excitement either of his visit last year, or of Republic Day. For one, Modi’s return to US shores this year now seems routine for a world leader, no longer weighed down by the visa questions of the past. For another, the policy announcements that came from previous summit-level meetings need to shift to the less glamorous implementation phase, not more vision declarations. But the third reason is that the core pursuits for Modi at the UN and with US investors hinge on tough reform slogs, both multilaterally and at home, which will inevitably take much more than a visit to realise.

Take the UN issues first. India has two overarching priorities for Modi’s New York interactions: UN Security Council expansion to include a permanent seat for India, and a larger role in the governance — especially mandate setting — of international peacekeeping. India has been advocating strongly for Security Council reform for decades, and while the US has endorsed a permanent seat for India in an expanded Security Council, the politics of this issue are so complicated (How big should it get? Who should be on it, and how is each region represented? What about veto power?) that it will likely require years to achieve. On the question of peacekeeping, where India, Bangladesh, and Pakistan are the largest troop-contributing nations in the world and therefore on the frontlines, a summit-level meeting will focus on new challenges in increasingly violent contexts. Attention to this issue, which is central to international peace and security, will help advance discussions of mandate reform, but it is unlikely that the session itself will produce a result.

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Modi will also visit California, where he will interact with the Silicon Valley Indian-American community, in another mega-arena style gathering that should be on the scale of Madison Square Garden. He will meet top tech leadership from Adobe, Apple, Cisco, Facebook, Google, Microsoft, Qualcomm, Tesla and others. The CEOs of Google, Microsoft and Adobe are all of Indian origin, a point of pride for India, and an illustration of the larger ecosystem that links US tech with India. Modi’s own social media posts about his agenda emphasise his Digital India and Skill India campaigns, and how US tech companies can get involved. A newly announced “India-US StartUp Konnect” initiative appears designed to link US and Indian innovators even more closely. He is slated to participate in a renewable energy discussion at Stanford, one of the most innovative universities in the US. Technology, innovation and clean energy: These are all areas with India-US collaboration underway, and so his visit will showcase naturally occurring commercial cooperation.

Staying with the private-sector outreach, Modi has a business component to his New York trip as well, including meetings with major US CEOs and a dinner hosted by Fortune magazine. Given that the hallmark of his interactions with global business leaders has been to pitch for investment in India, especially under the Make in India umbrella, that’s likely to be the subject of his conversations on the east coast, too. The pitch is welcome, and has brought a new pragmatic commercial vigour to Indian diplomacy. But in a free-market economy like the US, the results ultimately come if individual businesses find a profitable opportunity for their investments. Washington, unlike some governments with state-owned enterprises, does not direct private investment.

Indeed, after the roadshow ends, American companies will all carry out their own due diligence for their own industries, based on current market and regulatory conditions in India. What may look like a positive business opportunity for the auto sector may prove more challenging for apparel, to take one example. That brings the investment focus back to India’s own economy. There are things that governments can do together, like preferential trade deals and investment treaties, which can facilitate commercial ties and therefore encourage greater economic flows. (And here it should be said that the long-pending bilateral investment treaty between India and the US appears nowhere on the horizon, nor does the prospect for any larger trade conversation.) But the outcomes will inherently lie outside the purview of bilateral government talks.

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So as Modi returns to American shores, his US agenda — especially the private-sector agenda — creates a simultaneous domestic economic reform agenda, too. The past year has shown that India’s complex democracy makes continued economic liberalisation a slow and incremental process. Foreign direct investment has increased from a year ago, but the scale of India’s economic ambitions, its infrastructure goals and its job-creation priorities indicate the need for larger trade and investment flows. That will all take time to achieve, and means that the second round of #ModiInUS will, in the end, highlight not big drama, but the hard work that awaits him back home.

The writer is senior fellow for India, Pakistan, and South Asia at the Council on Foreign Relations. She served as deputy assistant secretary of state for South Asia from 2010 to 2013

First published on: 25-09-2015 at 12:21:25 am
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