dna edit: A fresh start

Delhi and Washington have sent a signal that should cut through the static about the India-US relationship generated by the BJP’s electoral victory. For all the speculation about Prime Minister Narendra Modi giving Washington the cold shoulder in retaliation for being denied a visa since 2005, it was never a very likely scenario. The US is simply too important a player for any democratic leader to let personal pique affect the bilateral relationship substantively. And Washington, for its part, has made its eagerness to engage with Modi clear over the past few days. It’s an opportunity neither administration can afford to waste.

The Modi administration’s domestic and foreign policy overlap — ramping up economic activity and building infrastructure via, among other means, inviting FDI — makes US participation imperative. Washington, meanwhile, needs a good working relationship with Delhi more than ever — both as a business partner given its own economic compulsions and in light of the many geopolitical challenges it faces where a cooperative Delhi would make matters easier.

The economic checklist is fairly straightforward. US industry has been jonesing for an easier route into the Indian market for years now. Delhi’s signals that it means to raise investment caps in sectors such as defence and insurance will go over well in Washington. Scrapping retrospective taxation — a distinct likelihood — will help as well. And the perception of Modi as a business-friendly leader with little patience for red tape and bureaucratic tangles is an asset in itself. Some impediments will remain — Delhi is unlikely to budge on issues such as FDI in multi-brand retail and nuclear liability norms, for instance — but on the whole, Modi speaks a language of economic pragmatism Washington will find easy to understand.

In return, the latter will have to send its own signals, from easing up on H1-B visas for Indians to backing off on the anti-outsourcing rhetoric and making it clear that the Devyani Khobragade affair was a one-off and it is respectful of Delhi’s sensibilities. And both sides must demonstrate the ability to think out of the box; for instance, they could use the congruence between Modi’s interest in renewable energy, demonstrated in Gujarat, and Obama’s own enthusiasm for it to kickstart investment and joint projects in related areas.

The tricky part will be engaging on the geopolitical issues — not necessarily at the September meeting, but in the near future — where the bilateral relationship will, to some extent, have to be filtered through the prism of their respective equations with other countries. For instance, the just-concluded Shangri-La Dialogue in Singapore was notable for the open acrimony between Chinese representatives and their US and Japanese counterparts. Modi, however — while he is likely to take a firm stand on Sino-Indian border issues — has good ties with Beijing that he will not compromise by allowing a perception of Indo-US cooperation aimed at China. Similarly, while Washington wanted Delhi to criticise Moscow’s moves in Ukraine, the latter refused to do so given the long history of the Indo-Russian relationship, defence sector ties and the importance of working with Russia in a post-US Afghanistan. Modi is unlikely to change this. The same goes for Iran; Tehran is just too important to Delhi with regard to energy security and Afghanistan for it to toe Washington’s line. Come September, Modi will have to strengthen the Indo-US economic relationship enough that the inevitable clashes of national interest remain secondary issues.