Prime Minister Modi’s U.S. Visit: Toward a More Balanced Agenda
October 1, 2014
On September 30, Prime Minister Narendra Modi of India concluded his first visit to the United States since his party, the Bharatiya Janata Party (BJP), won a majority in the lower house of India’s Parliament in the spring 2014 election. While the ostensible reason for the visit was to speak at the UN General Assembly, that speech was his least important engagement in the United States.
On many counts this was a very successful visit. The two sides reiterated past commitments and found new areas for cooperation. Mr. Modi reached out to various interest groups here in the United States in unprecedented ways. But at the same time, some of the issues that have divided our two nations in recent years remain unresolved. Overall, the revised agenda appears well balanced, with fewer “joint” initiatives that are really just thinly disguised unilateral interests. This approach should facilitate follow-through on both sides.
Four Key Highlights from the Visit
• Engagement beyond our Borders: The Joint Statement highlights a new willingness to work collaboratively on a wider set of global issues than was attempted in the past. References to North Korea’s nuclear program, instability in Iraq and Syria, and the security of the South China Sea highlight a widening of the aperture of engagement.
• United States to Support Modi’s Economic Goals: The U.S. government showed an important understanding of Modi’s goals and a willingness to engage on his priority issues. The United States proposed the launch of important bilateral programs on infrastructure development and manufacturing competitiveness.
• Modi Engages the American Public: Mr. Modi made an interesting attempt to engage the American public directly through his speech to 60,000 attendees at the Global Citizens Festival in New York City’s Central Park. Introduced by actor Hugh Jackman, he delivered his only English-language speech during the visit, concluding his remarks with “May the force be with you.” Modi’s messages of empowering women and improving sanitation were aligned with the group’s goals.
• No Longer Need “Proxies” to Engage Business: Previous prime ministers had a distant relationship with foreign business leaders, which forced the construction of “proxy engagements” on business issues. However, Modi showed a new willingness to engage business leaders directly—just as when he was chief minister of Gujarat. He hosted a roundtable with key Indian-American executives, a breakfast with other American CEOs, a series of one-on-one meetings with CEOs, and delivered a speech to the U.S.-India Business Council just before departing the United States.
U.S. Relations with Modi
When looking at the United States’ relationship with Modi, most attention is paid to the U.S. government’s 2005 revocation of his visa over lingering questions about his role in the state of Gujarat’s religious riots in 2002. Prime Minister Modi served as chief minister of that state from 2001 until 2014. Since the riots, the United States avoided senior-level government engagement with Modi until former U.S. ambassador Nancy Powell met him in February 2014.
However, the government relationship is only one dimension of the U.S. relationship with the prime minister. U.S. business leaders regularly visited Gujarat and met with Modi, most notably at the biannual “Vibrant Gujarat” summits. The Indian-American diaspora, as well, was able to engage with him and strongly supported the BJP’s election campaign. So the overall U.S. relationship with Modi was far less constrained than is sometimes portrayed.
Still, there was widespread expectation that Prime Minister Modi would want to slow-walk relations with the United States following his electoral victory. For a leader without national-level leadership experience, Modi has shown a deft hand at foreign policy. He is quite pragmatic and clearly on a mission to speed up India’s development. Holding grudges over past issues does not appear to be his style. He understands that the United States can be a key partner in helping him meet his goals for the country—better infrastructure, more industrial development, and domestic and regional security. So he made the decision to quickly break the ice, reciprocate early U.S. outreach, and make the trip to New York and Washington. There was no discernible impact of the visa ban, except to underscore his interest in reestablishing warm relations.
The Bilateral Relationship
Relations with the Manmohan Singh–led United Progressive Alliance (UPA) government had deteriorated in recent years. This decline began in late 2010 when India’s Parliament passed a nuclear liability law that essentially precludes U.S. involvement in India’s civilian nuclear power industry—gutting the impact of the landmark 2005 agreement on civilian nuclear cooperation. More recently, short-sighted economic decisions in New Delhi on a range of commercial issues such as taxation, patents, and forced local manufacturing triggered a ferocious anti-India campaign in Washington, D.C. The December 2013 arrest of an Indian diplomat in New York made the fissures undeniable.
Hopes were high that the election of pro-business Modi would help repair relations, though the Modi government’s decision to step away from the World Trade Organization (WTO) Trade Facilitation Agreement in July caused some policy leaders to question his commitment to reform. The policy community also had unrealistic expectations about the types of “reforms” that could be crammed into the July budget.
At the same time, foreign investment in 2014 is running well ahead of 2013 levels, and economic growth estimates are running well ahead of the average over the last two years. The rupee has remained stable despite the fact that the U.S. Federal Reserve has already started slowing its bond purchase program here in the United States. Last year, the Fed chairman’s hint that bond purchases may slow in the future caused foreign institutional investors to exit Indian capital markets in droves, pressuring the rupee. On September 26, Standard & Poor’s upgraded the outlook for India’s sovereign debt to “stable” from “negative.”
Prime Minister Modi made a concerted effort to engage four distinct groups while in the United States:
• Government: The government bilateral meetings were fine, though fell well below former prime minister Singh’s inaugural visit in 2005, which included a State Dinner, an address to a Joint Session of Congress, and concrete high-value proposals like the civilian nuclear agreement. Of course, we also had over a year to prepare for Singh’s arrival following his election in 2004. This particular visit came about much sooner. Modi also met with congressional leaders, governors, and New York City’s mayor during his visit.
• Business: Prime Minister Modi engaged the U.S. business community directly, without the need for a proxy shell such as the U.S.-India CEO Forum. This was an important step. Modi did not indulge in flowery talk with executives, but instead focused on what steps his government needs to take in order to attract higher levels of investment.
• Indian-American Diaspora: Prime Minister Modi was the star of a sold-out show for the Indian-American diaspora community at Madison Square Garden. He also offered substantive commitments, promising visas on demand for Americans in 2015 and lifetime visas for Indian-Americans.
• American Public: As noted earlier, Prime Minister Modi made the most direct outreach to the American public of any Indian prime minister in recent history through his speech to 60,000 people at the Global Citizen Festival in Central Park on September 27.
Did the Visit Repair the Relationship?
We do not yet have clarity over whether the biggest strategic fissure—the inability for U.S. nuclear firms to do work in India—will benefit from the visit. Per the Joint Statement, a “contact group” has been established to look into measures that will allow cooperation, but only time can tell. Other smaller though important economic issues remain unresolved as well. But this new vision for cooperation looks like a stronger balance of shared interests. Past joint statements have sometimes appeared to tilt toward the U.S. agenda, resulting in little follow-through from Indian counterparts. The impact of this visit can only be measured in hindsight, so the real outcomes can only be measured over time.
Richard M. Rossow is a senior fellow and holds the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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