India, US eye deals in energy and agriculture ahead of Obama visit

Trade irritants have threatened to dampen US president Barack Obama’s visit to India in November but on Tuesday both sides tried to iron out the wrinkles.

Officials from both sides signalled a hunt was on to identify investment projects that Obama and Singh could sign during the visit in areas such as energy, education, agriculture and infrastructure.

“‘Get Something Done’ should be the mantra now,” said commerce secretary Rahul Khullar in his opening remarks at the Trade Policy Forum meeting in Washington.

“We should view this meeting as a forerunner to president Obama’s upcoming visit to India. The wide range of topics our focus groups have been discussing attests to the breadth of our economic relationship,” added deputy US trade representative Demetrois Marantis.

The Wall Street Journal reported on Tuesday that the Obama visit is likely to centre on job-creating deals for the US in the defence sector. Last week, a US delegation visited India to identify big investment ideas.

America has always projected itself as a crusader for global free trade and railed against Indian protectionist policies, but the boot is now on the other foot.

Commerce and industry minister Anand Sharma has blasted America’s protectionist policies and an Ohio ban on outsourcing as “regressive.” He is likely to take up the issues on Tuesday with forum co-chair US trade representative Ron Kirk.

Visiting foreign secretary Nirupama Rao, who is giving a lecture at Harvard University, on Tuesday said India had pressed its concerns; “It (outsourcing) is one of the issues in the relationship. We have taken it up with the American administration. They are aware of the concerns we have on this issue and the fact that our companies are being targeted for no reason.”

The Obama government is increasing the cost of an H-1B visa for Indian workers by $2,000, adding a roughly $250 million annual bill to the Indian IT industry. Sharma had written to Kirk last month about how the “highly discriminatory” move would hit India.

“It is an issue the administration is hoping to work with to see if we can come up with an acceptable alternative solution,” Kirk told the US media.

India’s trade deficit ballooned to $56.6 billion in the April to August period and it threatens to widen as the Indian economy continues to expand at 8.8% while the slow recovery in the US, turns India’s second-largest trading partner protectionist. Indian exporters could find the US a harder market to crack open as they come up against a wall of anti-import measures.

Adopting a protectionist stance, the US House of Representatives recently passed two bills — the “Made in America Act” and the Berry Amendment Extension Act — that stipulate that the US Congress and the US Department of Homeland Security buy only goods and services made in the US.

The US government will use the trade forum to protest the impact of India’s nuclear-liability legislation that it views as unfavourable to US nuclear suppliers. India maintains “the law is final” although the US wants prime minister Manmohan Singh to trump India’s liability law by striking a bilateral agreement in which India would pledge to indemnify all foreign nuclear firms.