India-U.S. talks to focus on economic ties:

Wed, Jun 2 12:28 AM


U.S. Secretary of State Hillary Clinton (L) and Foreign Minister
Somanahalli Mallaiah Krishna in New Delhi.


India and the United States
open high-level talks this week, hoping to cement gains in a partnership
still bedeviled by doubts despite vows of deeper political and economic
cooperation.Indian concerns focus on growing U.S. ties with its
arch-rival Pakistan -- a key player in the U.S.-led war in Afghanistan
-- while U.S. officials will likely press for more progress in opening
India's huge market to U.S. companies in the energy, retail and
education sectors.Secretary of State Hillary Clinton and Indian
External Affairs Minister S.M. Krishna will each lead large government
teams to the Washington meetings, which begin in earnest on Wednesday
and move into high gear on Thursday.U.S. Undersecretary of State
Bill Burns said on Tuesday expanding U.S. political and economic ties
with India was a priority of the Obama administration, which also wanted
closer cooperation on issues from East Asia to the Middle East."India's
strength and progress on the world stage is deeply in the strategic
interest of the United States," said Burns in an address to the Council
on Foreign Relations."Never has there been a moment when
partnership between India and America mattered more to the rest of the
globe."U.S. officials have repeatedly sought to reassure India
that the bilateral relationship -- which blossomed under former
President George W. Bush -- remains on the fast track under his
successor, President Barack Obama.Indian Prime Minister Manmohan
Singh was Obama's first official state visitor in November, and Obama
plans his own return visit to New Delhi later this year.Washington
cites progress on climate change, Iran and intelligence-sharing as
hallmarks of the new cooperation.STRAINSBut
the partnership has come under strain in Afghanistan, where India is
jostling with Pakistan for influence ahead of Washington's planned troop
withdrawal to start in mid-2011.The Obama administration has
sent mixed signals over the role India should play in Afghanistan,
leaving diplomats to beat back Indian fears that Pakistan's strategic
interests could have more weight.Burns sought to ease concerns
over Afghanistan, saying Washington valued India's role there and saw
its involvement as a "key part of that country's future success."But
analysts say these persistent doubts point to a broader uncertainty
over how the two democracies will move forward."Be it Iran,
Pakistan, terrorism or nuclear issues, Washington had still not been
able to figure out if India was part of the problem or solution," Uday
Bhaskar of New Delhi-based think tank National Maritime Foundation."There
is a sense of drift on both sides."From the U.S. perspective,
there is frustration over the slow pace of major economic initiatives,
including full implementation of a 2008 civilian nuclear cooperation
deal that ended India's nuclear isolation since its 1974 atomic test.U.S.
officials estimate the agreement could represent a $10 billion jackpot
for U.S. reactor builders such as General Electric Co. and Westinghouse
Electric Co, a subsidiary of Japan's Toshiba Corp.But while Singh
said in November he saw no hurdles to full implementation of the deal,
moves to set in place the legal framework have been slow and look likely
to encounter further delay in India's parliament.Also moving
slowly are Indian proposals to open up its $450 billion retail sector --
of huge interest to companies such as Wal-Mart Stores -- and to allow
foreign universities to set up Indian campuses, a focus for top-tier
U.S. schools.U.S. defence giants Lockheed Martin Corp and Boeing
Co are watching hints that India may liberalize foreign direct
investment in its defence equipment market, which could be worth $100
billion over the next 10 years.Both companies are already bidding
in India's $11 billion tender for 126 new fighter jets, which itself
would be one of the largest arms deals in the world.Political
analysts say the economic payoffs may come eventually, but that the
United States is learning it must be patient as India works at its own
pace."There is considerable frustration," said Ashley Tellis, an
India expert at the Carnegie Endowment think-tank. "We don't understand
the dynamics of domestic Indian politics. My sense is that we will get
what we want eventually, but it will never be in the first iteration."(Additional
reporting by Sue Pleming in Washington and Krittivas Mukherjee in New
Delhi; editing by Cynthia Osterman)