Article first published as Currency War to the Fore in G20 Ministerial Meeting on Blogcritics.
The US President Barack Obama is visiting India in second week of November. He is bringing several business people along with him while coming to India. Along with lobbying for contracts of billions of dollars, Mr. Obama has aimed at convincing India to be its strategic military partner in the region to secure its interests.
Relations
The relations between India and the US have only been speeded up since 1990 when USSR, the cold war alley for India, collapsed and India began opening up of its market to foreign MNCs, under the stewardship of the then Finance Minister Dr Manmohan Singh. The improvement of relations acquired faster pace in BJP’s coalition government except a brief period of sanctions regime after India’s 1998 nuclear tests under BJP rule, which was lifted in late 2001, maybe partly as a result of September 11 attacks. And that pace increased further in Congress’ coalition government.
Strategic Partnership
The Strategic Partnership Agreement was reached between India and the US in March 2000 while Bill
After two devastating wars of Bush administration, this necessity was multiplied in terms of the interests of the US. America's new relationship with India has come as a broad security, political, technological, and economic arrangement on par with America's relationship with Europe or NATO. The US was even talking about sharing roles in joint space missions. The ex-president of the US, Bush and his first secretary of state, Collin Powel have once talked, back in 2004, of India’s common interests in securing their positions in sea lanes from the Persian Gulf to Malacca Islands. India has already been patrolling with its navy.
Wider Strategy
Apart from defense deals, the US is looking toward India to take part in a wider strategy that would help the US resolve its strategic needs and problems as part of fulfilling its interests in the region. Though the Obama administration is talking of withdrawal of troop from Afghanistan soon, it will not do so as it did not enter Afghanistan to withdraw, in the first place. War on Terrorism and installing democratic regimes were only a rhetorical cover up for the US attacks.
Its main intention could only be the strategic presence of its military in the region, given the past military actions and CIA organized coups throughout the world. While fighting a war and searching ways to counterweigh the surging China, the US would only need a long-term friend in the region. It is seeking to clinch a defense pact Logistics Support Agreement (LSA) that would allow American military to use Indian facilities for certain operations like refueling its warplanes. Though some analysts are skeptical about India’s acceptance of such pacts, their doubts are misplaced given the track record of the Indian rulers in being subservient to the interests of the superpower. The problem is ‘when it takes place,’ but not ‘whether it takes place.’
Nuclear Bills
India also needed the US cooperation with the demise of USSR and rising relations between Pakistan and China including nuclear relations. The Congress coalition government has successfully concluded the strategic partnership agreement during its first stint in power with the passage of “civil nuclear agreement” bill in 2004.
The Indian Parliament has ratified “nuclear damage liability” bill in September bringing down the biggest obstacle for the implementation of the civil nuclear agreement. It paved the way for the US to sell safely the nuclear material and equipment without fear of paying hefty penalties for damages that may occur due to nuclear accidents. It may be recalled that the US made the British Petroleum to set aside $32 billion to compensate the damage caused by its devastating oil spill in Gulf of Mexico.
But, the US’ nuclear supplier companies seem to assume the liability bill unappealing, as it places liability on suppliers in case of nuclear accidents. Reports are appearing that the US is burgeoning for exception of the US suppliers from the liability law.
Technology Transfer
One of the main problems for the partnership to flourish stems from the US’ denial of technology transfer to its so-called friends or partners. Without technology transfer but selling mere the military goods and equipment, the buying countries are expected to depend permanently on the US for servicing. It prevents the buyers to build their own equipment which is what required by the US.
Aircrafts and Fighter Jets
India has long been aspiring for aircraft carriers, but so far not succeeded. Some Indian analysts feel unless the US supply aircraft carriers and transfers technology, the strategic partnership cannot become fruitful. However, Obama will be clinching a deal to supply ten Boeing C-17 transport aircraft worth $5.8 billion. C-17s help transport military personnel in big number in short time. Boeing and Lockheed Martin companies of the US are competing with Europeans and Russians to sell 126 fighter jets worth $11 billion, considered to be the biggest arms deal nowadays. Obama’s visit may help clinch this deal also, with some attractive offers.
According to KPMG (audit, tax and advisory firm in America) report, India is going to procure about $112 billion worth defense equipment by 2016 in a bid to overhaul its military arsenal. India is also looking to buy 24 Harpoon missiles for its Air Force at an estimated cost of $700 million. Apart from these purchases, the two sides are also holding discussions for foundational agreements in areas such as communication interoperability and geo-spacial fields.
If Obama succeeds in his mission, it could be a big prize for the ailing economy of his country.
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