Critical Questions

Prime Minister Modi’s Visit to Washington

June 6, 2016

From June 6 until June 8, Prime Minister Narendra Modi of India will make his fourth visit to the United States since becoming the prime minister in May 2014. While leader-level summits between the United States and India have become fairly common in the last decade, this is a particularly high level of engagement, fueled by relatively swift progress in forging agreements that will deepen our partnership—particularly our security partnership. The June 2016 visit to Washington, D.C., will likely be the last formal bilateral summit during the Obama administration, apart from potential pull asides at key global events.

Q1: Why did Prime Minister Modi agree to come back to Washington just two months after attending the Nuclear Security Summit?

A1: The last two meetings between President Barack Obama and Prime Minister Modi, at the September 2015 opening of the UN General Assembly and the recent Nuclear Security Summit, did not meet initial expectations. There had been hope that the two leaders would have formal meetings on the sidelines of these summits, but in the end they were only able to engage superficially. So there has been a hunger to have a final focused summit before President Obama leaves office.

Q2: What is the state of bilateral relations leading up to this summit?

A2: Overall, the relationship has progressed dramatically over the last two years. The relationship was on life support in early 2014 due to trade squabbles, India’s decisions related to passing through Parliament a weakened nuclear liability law, the choice of a French platform for a major fighter aircraft deal, and the arrest of an Indian diplomat in New York. Just two years later we have made deep progress in our defense relationship and modest progress on our economic relationship.

The deepening of our defense relationship is signified by the historic “Joint Strategic Vision for the Asia- Pacific and Indian Ocean Region” signed in January 2015. Other notable milestones include the renewal of our 10-year defense framework agreement, a widening and deepening of our military exercises, and progress on new defense codevelopment and coproduction projects under the Defense Technology and Trade Initiative (DTTI). Our governments have also just launched a new “Maritime Security Dialogue.”

On the economic front, the United States continues to be a major investor into India and India’s top trading partner when looking at both goods and services. Our governments have found some modest ways to institutionalize economic cooperation, such as partnering to assist in the development of three smart cities and clean energy cooperation.

However, our governments remain deeply divided on trace policy. We remain on opposite sides of multilateral talks; we are not a part of the same emerging trade blocs; and even our own attempts to negotiate a bilateral investment treaty, first articulated eight years ago, are stalled. Local content rules for manufacturing that were adopted by the previous Indian administration remain in place and have recently been augmented through a new “National Capital Goods Policy” approved by the Indian Cabinet on May 25, 2016. So the U.S. business community will continue to raise these key trade issues as they see their trade interests impacted by Indian policies.

Q3: What can we expect on this visit?

A3: There are two significant announcements that may come during the visit. The first would be a signed project agreement for a U.S. nuclear power developer, likely Westinghouse. This would be a powerful indication that the nuclear liability insurance pool that the government of India has created is, indeed, commercially viable. The second would be the formal text of a defense “Logistics Exchange Memorandum of Agreement (LEMOA).” The LEMOA was agreed “in principle” in April when Defense Secretary Ashton Carter visited India, and talks have been underway on the details. The governments may also highlight recent memorandums of understanding on the exchange of terrorism watch lists, including India under the Global Entry Program, and wildlife conservation.

Apart from these two potential major announcements, India will press the United States for stronger support for its inclusion in the Asia-Pacific Economic Cooperation (APEC) forum, as well as the global nonproliferation regimes. Prime Minister Modi will continue to press the United States to reduce aid to Pakistan. He will also likely raise India’s concerns about U.S. immigration policy. A recent fee increase on H1B skilled worker visas has hit India’s powerful technology services firms hard, and some versions of broader immigration reform look to cap H1B visas from heavy users.

The United States will press India for stronger commitments on trade liberalization, including patents. U.S. officials will also want to see India articulate clearer security objectives as the United States attempts to get a better understanding of the types of actual security commitments India is willing to undertake. Clean energy and environmental issues will also be on the U.S. agenda.

Q4: With only six months left in the Obama administration, is it already too late to look for new commitments?

A4: No, neither side should limit their ambitions for this summit due to the short time left in the Obama administration. Unlike Supreme Court nominations, most issues of importance in U.S.-India relations are not reliant on President Obama’s ability to enact a legislative agenda. We should still have at least one other critical bilateral meeting this summer—the annual “Strategic and Commercial Dialogue,” which may happen in late-summer if schedules align.

More importantly, we can continue to make real progress in the relationship as long as key Obama administration senior officials remain in place, in particular Defense Secretary Ashton Carter and Commerce Secretary Penny Pritzker. Both have shown willingness to spend a significant amount of time on the India account in order to enhance relations in their respective areas.

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 in Washington, D.C.

Critical Questions 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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