Sept. 27 (Bloomberg) -- President Barack Obama praised improving defense and commercial ties with India, including progress on a deal for U.S. companies to sell nuclear power technology, as he met at the White House today with Prime Minister Manmohan Singh.
The agenda for the leaders of the world’s largest economy and the world’s second most-populous nation also included discussion of an investment treaty, smoothing trade tensions and climate change.
Singh’s visit took place taking place as India and Pakistan, neighbors with nuclear weapons and a history of tension, are seeking to improve relations amid renewed fighting in the disputed territory of Kashmir. The U.S. president hosts Pakistan’s new prime minister, Nawaz Sharif, next month.
India and Pakistan will both benefit from a “peaceful reduction in tensions,” Obama said to reporters at the White House. Greater stability in nearby Afghanistan would also have benefits across the subcontinent, he said.
“The epicenter of terror still remains focused in Pakistan,” Singh said. “India needs the United States to be standing by our side.”
Caroline Wadhams, a senior fellow at the Center for American Progress, a Washington policy institute, said there are “no fireworks” expected from the visit beyond a possible military equipment announcement or modest progress on the nuclear initiative or trade. The administration, she said, is playing “the long game.”
“Obama is trying to undertake this rebalance to the Asia-Pacific, and India is seen as being the whole cornerstone of that rebalance,” she said.
The effort by Obama, 52, and Singh, 81, to expand the U.S.- India alliance is running up against friction caused by differences that include Indian legal liability issues hindering implementation of a civil nuclear deal affecting U.S. companies including Westinghouse Electric Co. and General Electric Co.
“We’ve made enormous progress on the issue of civilian nuclear power,” Obama said.
Eighteen business organizations including the National Association of Manufacturers and the U.S. Chamber of Commerce wrote to Obama yesterday complaining of discriminatory trade barriers in India and asking him to raise concerns with Singh.
India’s trade violations include a failure to protect intellectual property rights and rules that favor local information-technology and clean-energy producers, the U.S. business groups, which are part of the Alliance for Fair Trade with India, said in their letter to Obama.
India is trying to jump-start its recovery from the global economic crisis by taking “shortcuts that are contrary to international norms,” Linda Menghetti Dempsey, vice president for international economic affairs for the National Association of Manufacturers, said in an interview.
“Now is the moment to raise this issue at the highest level,” Dempsey said.
Governors from 14 U.S. states -- Colorado, Connecticut, Georgia, Idaho, Kansas, Maine, Maryland, Ohio, Oklahoma, Pennsylvania, Tennessee, Vermont, Washington and Wisconsin -- this week also wrote to Obama, asking him to address similar concerns about trade with India.
India is ranked as the world’s 10th largest economy based on 2012 gross domestic product data compiled by the International Monetary Fund. In terms of buying power by country, India ranks third, behind the U.S. and China.
Trade in goods and services between the U.S. and India was $86 billion in 2011, according to the Office of the United States Trade Representative, with India ranking as the U.S.’s 13th largest goods trading partner. U.S. foreign direct investment in India rose to $27.1 billion in 2010, a 29.5 percent increase from the year before.
While trade and investment cooperation has expanded greatly, progress since Obama took office in 2009 and announced India as a priority has been “nowhere near what people had hoped,” Wadhams said. “People think it could be quadruple” what it is now.
One of India’s chief concerns heading into the visit, she said, is the uncertainty of the U.S. presence in postwar Afghanistan after 2014. “They’re worried that the Obama administration is completely mishandling the transition in Afghanistan and that we’re going to leave it irresponsibly.”
Singh’s National Security Adviser Shivshankar Menon said in a Sept. 20 speech that relations between the U.S. and India “have come a long way in the last decade.”
While “some today speak of drift in the relationship,” Menon said, “I find this a rather strange way to describe a relationship where the two governments have 32 dialogue mechanisms meetings each year.”
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