India

Indian Investment in the U.S. and the Road to the BIT

Aug 12th, 2011
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By Elizabeth Foster

Indian Minister of Commerce Anand Sharma, who recently agreed with U.S. Trade Representative Ron Kirk to fast-track negotiations on a Bilateral Investment Treaty, or BIT.

Indian Minister of Commerce Anand Sharma, who recently agreed with U.S. Trade Representative Ron Kirk to fast-track negotiations on a Bilateral Investment Treaty, or BIT.

Secretary Clinton’s visit to India on July 19 and President Obama’s own visit in November last year demonstrated that the U.S.-India relationship continues to be a priority for the Obama Administration. This relationship is also viewed with growing importance on Capitol Hill, where the Senate India Caucus has grown to 38 members since its founding in 2004. There is, however, a lingering perception among some Americans that India is partially responsible for the outsourcing of American jobs. As long as high unemployment persists, and job creation remains the foremost concern of a majority of Americans, the perception of the relationship as a one-way street could present an impediment to initiatives that would foster greater Indian investment in the American economy. To remedy this, American officials must emphasize the tangible economic benefits Americans derive from Indian investment.

Jose Fernandez, Assistant Secretary of State for Economic, Energy, and Business Affairs has said that “foreign investment will be one of the most important drivers for the creation of new jobs” in the U.S. economy. Indian investment exemplifies this trend. Indian companies have saved over 40,000 American jobs by acquiring failing American companies, and altogether Indian companies employ over 60,000 Americans across the U.S according to a 2010 FICCI study (PDF). (more…)

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India-Bangladesh Relations: Sustaining the Momentum

Jul 30th, 2011
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By Sanjana Basu

In last week’s U.S.-India Strategic dialogue in Chennai, Secretary Clinton urged India to step up its leadership role in the region. She specifically stated that India “has a great commitment to improving relations with Bangladesh, and that is important because regional solutions will be necessary on energy shortages, water-sharing, and the fight against terrorists.”

Secretary Clinton greets attendees at her address at the Anna Centenary Library in Chennai.

Secretary Clinton greets attendees at her address at the Anna Centenary Library in Chennai.

This statement could not have come at a more opportune time. For the first time since 1975, India and Bangladesh have embraced a historic opportunity to build a lasting relationship. A sustained diplomatic investment in a robust bilateral relationship will produce positive results for both countries. The effects of better bilateral relations can only strengthen India’s “Look East” policy. But, as a recent essay in Outlook India put it: “Merely looking east won’t do. India now must hold Bangladesh’s gaze.”

During Minister S.M. Krishna’s Dhaka visit in July, Bangladesh and India signed two trade-related pacts. These included a Bilateral Agreement on Promotion and Protection of Investments (BIPPA) which came into effect on July 9, and a Standard Operating Procedure to facilitate transit from neighboring Bhutan. Dhaka and New Delhi also agreed to enhance security cooperation, acknowledged steps toward signing an interim deal on the shared waters of River Teesta and River Feni, and began talks on a framework agreement for the demarcation of the last 6.5 kilometers of their land border. (more…)

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Should the U.S. Provide the Joint Strike Fighter to India?

Jul 5th, 2011
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By Amer Latif

The HAL HF-24 Marut, India's first indigenous jet, flew with the Indian Air Force from 1961-1985.

The HAL HF-24 Marut, India's first indigenous jet, flew with the Indian Air Force from 1961-1985.

Recent Indian press reports have indicated that Lockheed Martin is seeking to provide the Joint Strike Fighter (JSF) to India as a possible late entry to the Medium Multi-Role Combat Aircraft (MMRCA) competition after the U.S. was excluded as a finalist in late April. The Senate Armed Services Committee increased the buzz when it passed an amendment to its markup of the Defense Authorization Bill that requires the Secretary of Defense to provide “a detailed assessment on the desirability and feasibility of the future sale of F-35 Joint Strike Fighters to India…”. Any decision to release the Joint Strike Fighter to India will be a complicated one that will most assuredly be marked by spirited debate within the U.S. government and on Capitol Hill.

One side of the discussion could highlight India’s close relations with Russia and its plan to jointly develop a fifth generation fighter (PAK-FA) with stealth capabilities. Some U.S. officials will likely have serious concerns about JSF technology and know-how ending up with Russia and its PAK-FA program. Concerns about technology transfer, always a challenge, will be complicated further by the Indians’ continued reluctance to sign the Communications Interoperability and Security Memorandum of Agreement (CISMOA) and the Basic Exchange and Cooperation Agreement for Geo-Spatial Data (BECA).

Furthermore, co-production may not be an option for India since all final assembly of JSF aircraft is currently scheduled to take place in the U.S. with no plans to co-produce the aircraft with foreign partners. Regional factors will also need to be taken into account, as the introduction of stealth technology onto the South Asia subcontinent will almost certainly unnerve the Pakistanis and could be a game changer for Indo-Pak stability. The prospect of India possessing a stealth fighter with the ability to deliver nuclear weapons will certainly raise alarm bells in Islamabad, and could adversely affect already-fragile U.S.-Pakistan relations. (more…)

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Video: Secretary of Homeland Security Napolitano Speaks at CSIS on the U.S.-India. Strategic Dialogue

Jun 9th, 2011
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During President Obama’s trip to India in November of last year, the U.S. and India announced a new Homeland Security Dialogue between the U.S. Department of Homeland Security and the Indian Ministry of Home Affairs. Secretary Napolitano just returned from India, where she discussed cooperation on critical infrastructure protection, cybersecurity, interdicting illicit financial transactions, and greater intelligence sharing with her Indian counterparts. Speaking at CSIS last week, she discussed these areas of cooperation, and took questions from the audience about the U.S.-India security relationship. You can watch the video of the session below.

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India’s State Elections: People vs. Power

Jun 1st, 2011
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By Arti Dhar, Intern Scholar, Wadhwani Chair in India-U.S. Policy Studies, CSIS

Members of the Communist Party of India march in West Bengal.

Members of the Communist Party of India march in West Bengal. Photo by Kaushik Narasimhan, used under a Creative Commons license.

Five Indian states went to the polls from April 4 – May 10 for the Indian state elections of 2011. Though the Congress-led central government continues to reel under charges of corruption, mounting attacks from the opposition, and high inflation, local political allies led by charismatic personalities led the Congress-led United Progressive Alliance (UPA) coalition to victories in three out of the five states.

This election was the first big test for the Congress party following India’s recent “scam season.” The results brought a much needed morale boost to the party. However, the respite is temporary at best. If the loss in Tamil Nadu of the DMK party, a key federal ally of the Congress, is any indication, corruption influenced the decisions of the electorate in important ways. With several rounds of state elections scheduled over the next few years leading up to the national election in 2014, it is imperative for the UPA government to immediately and substantively address issues of national concern, such as corruption and soaring food prices, to regain some of its lost credibility with the people.

The Electoral Landscape
The dates of the polling were staggered over several weeks to ensure security and transparency. As the only political party with a major stake in all five States Assemblies as well as at the Center, these elections were particularly significant for Congress and its coalition as it reaches the midway point in the five-year mandate it won in 2009. (more…)

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Video Discussion: Should India Be Invited Into APEC?

Mar 21st, 2011
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Ernie Bower, Senior Adviser and Director of the Southeast Asia Program at CSIS, and Karl Inderfurth, Senior Adviser and Wadhwani Chair in U.S.-India Policy Studies at CSIS, discuss whether or not the United States should invite India to join the Asia Pacific Economic Cooperation (APEC) Forum during its chairmanship of the Forum this year:

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Enter the Elephant: India is Part of Asia

Feb 11th, 2011
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By Ernest Z. Bower, Senior Adviser and Director of the Southeast Asia Program, CSIS

Ganesh, the elephant-headed Hindu god, is considered an important symbol in India and widely revered in mythology as the “remover of obstacles.” Strategically, including India in new strategic conceptions of Asia could help to do exactly that—remove obstacles, enhance balance and help create regional architecture robust enough to welcome rising super powers in a manner that preserves peace and prosperity in Asia and globally.

Encouraging India to focus on Asia should be a shared interest of the United States, ASEAN, and other Asian powers. India clearly understands the benefits of deeper engagement in Asia; Prime Minister Manmohan Singh’s “Look East” policy articulates the strategic and economic benefits with lucidity. Still, the policy is not being implemented with the kind of energy that makes partners believe India is serious. Security in the Indian Ocean combined with the prospect of new markets and investment opportunities should be compelling entry channels, but an all-encompassing focus on Pakistan is monopolizing foreign policy bandwidth in New Delhi.

To the extent that Southeast Asia’s diverse countries share a foreign policy and national security outlook, the focus of common interest is balancing great-power influence in the Asia Pacific and Indian Ocean. U.S. secretary of state Hillary Clinton called the Association of Southeast Asian Nations (ASEAN) the “fulcrum for the region’s emerging regional architecture.”  The region is comfortable with that concept, namely being the center of a balanced, peaceful, and prosperous Asia. (more…)

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2nd US ASEAN Summit: What's on the Menu in Manhattan?

Sep 23rd, 2010
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By Ernest Z. Bower, Senior Adviser & Director, CSIS Southeast Asia Program

SUMMARY

US President Barack Obama will host eight of the ten leaders from the Association of Southeast Asian Nations (ASEAN)[i] in New York on Friday, September 24, 2010 at the 2nd US ASEAN Summit.  The meeting underlines renewed American policy energy being invested in Southeast Asia.  Headlines from the discussion should focus on three areas:

1.       Security alignment including a restatement of a common position on the South China Sea;

2.       Economic growth and trade – particularly ASEAN’s leaders seeking an update from the President on the health of the US economy and a read on whether the mid-term US Congressional elections might be an inflection point after which the US can return to a proactive posture on trade; and

3.       Burma – specifically exploring a way forward on how the US and ASEAN can encourage Burma’s leaders to introduce political space in the November elections or beyond.

The fact the meeting is taking place in September in the United States is important in that it institutionalizes renewed US engagement in ASEAN ahead of key steps forward in the creating of regional security and trade architecture in Asia.

On the other hand, the fact that the Summit is taking place in New York not Washington and without the leader of ASEAN’s largest country and economy, Indonesia, underlines the fact that while policy intent is clearly substantive engagement, there is still much work to be done to align the US and ASEAN.

Despite the best intentions of the principles, the meeting will certainly be viewed through the prism of perceived increased tension between China and its Asian neighbors particularly related to disputed maritime territories.

Here are some Critical Questions about the Summit and what we can expect:

(more…)

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Absent in Danang: Urgent Need for A US Trade Policy in Asia

Aug 25th, 2010
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By Ernest Z. Bower, Senior Adviser and Director, CSIS Southeast Asia Program

A political commitment to trade is badly needed in the United States.  That point is underlined as the economic and trade ministers from the Association of Southeast Asian Nations (ASEAN) gather in Danang, the largest city in central Vietnam positioned on the white sand beaches of the coast and nestled next to the beautifully preserved ancient city of Hoi An.  The ASEAN Ministers are there meeting with their counterparts from all the other East Asia Summit members –  and future member – Australia, China, India, Japan, Korea, New Zealand and Russia (the prospective member).   Even the EU is represented at a ministerial level at the meeting.  As the proverbial roll call of serious players on economic integration and trade in Asia is called in Danang, one important actor is missing:  The United States – absent.

The gap in US strategy for intensifying its engagement in Southeast Asia is clearly trade.  While the United States is starting to connect the dots diplomatically and on security architecture, our trade professionals, some of the most hard-core, experienced Southeast Asia hands in the Administration, are essentially benched as they wait for political and policy decisions to put the US trade leadership back into the game.  That call is clearly being held hostage by the White House and its focus on U.S. midterm elections in November.  Political will better follow elections quickly – meaning pre-Thanksgiving, ideally during President Obama’s extended November tour of Asia – or US engagement in the region will continue to be incomplete and less than strategic. (more…)

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Answer: Washington, DC

Aug 19th, 2010
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By Ernest Z. Bower, Senior Adviser and Director, CSIS Southeast Asia Program

In late September or early October, President Obama will take the historic opportunity of hosting the first US ASEAN Summit on American soil.  The Summit will be the second of its kind following the inaugural meeting held in Singapore last November.  There are two options for venue being considered now in the White House: New York, on the margins of the United Nations General Assembly (UNGA) or Washington, DC – the American capital.  There is only one correct answer to this foreign policy test: Washington, DC.

While the policy teams at State, National Security Council, the Pentagon, Commerce and USTR will understand immediately the core importance of ASEAN, political leaders may not have connected the dots yet.  ASEAN is vitally important to the United States.  It is home to 10 countries including two US allies (Philippines and Thailand), anchored by Indonesia – a G-20 member and next chair of ASEAN, 620 million people, a $1.5 trillion GDP, important strategic and commercial sea lanes and navigational routes and is our 4th largest market for American exports.  Not only that, but the US as nearly three times the investment in ASEAN as it does in China and nearly 10 times as much as in India.  There is no way the United States can double exports without hard core focus on a trade policy and trade enabling initiatives by the US Export Import Bank, OPIC, Trade Development Agency, Commerce and FCS and others in this region.  Finally, ASEAN will be the fulcrum of new trade and security architecture in the Asia Pacific for this century.  Secretary of State Hillary Clinton has been clear about the importance of “ASEAN centrality” in these new structures that will be the foundation of US national security and economic prosperity for the coming decades.

(more…)

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