Business interest drives ties with US, China

When 2014 clocked, New Delhi’s ties with Washington appeared to be at its lowest, with the arrest of IFS officer Devyani Khobragade in New York and the humiliation she was subjected to while in the custody of US law enforcement officials, triggering a full-blown diplomatic spat.

New Delhi’s dialogue with Islamabad remained suspended at the beginning of 2014, with the Pakistani Army and rangers’ continued ceasefire violations along the Line of Control although Prime Minister Manmohan Singh and his new Pakistani counterpart M Nawaz Sharif had a meeting on the sideline of the United Nations General Assembly in New York in September 2013 and the two leaders agreed to maintain peace along the border.

 India’s ties with China too was as complex as it had always been even as April-May 2013 border standoff at Ladakh in Jammu and Kashmir prompted the two countries to sign a Border Defence Cooperation Agreement to keep the Line of Actual Control calm.

But, as 2014 is set to make way for 2015, India and the US seem at the midst of a turnaround in their ties. Prime Minister Narendra Modi had a spectacular visit to the US just four months after taking office and is now set to play host to American President Barack Obama, who will be the chief guest on the next Republic Day ceremony on January 26.

With Modi keen to woo US investment to spur economic growth in India and deliver on his promise to bring in “Achhe Din” (Good Days), Devyani Khobragade’s arrest and humiliation in New York just about a year ago has suddenly become “a non-issue”.

While the beginning of 2014 saw the UPA government going to the extent of even expelling a US diplomat from India to protest the way the Khobragade has been ill-treated by Washington, the new dispensation in New Delhi rather initiated disciplinary actions against the young IFS officer after a vigilance inquiry was started against her for allegedly hiding dual citizenship of her children.

With Obama’s visit to India next month likely to give a boost to bilateral economic and commercial relations, New Delhi and Washington are also trying to thrash out other thorny issues in bilateral ties – like trade disputes, US concerns on tax laws and Intellectual Property Rights regime of India. Officials of the two countries just had a meeting to address US nuclear companies’ concerns over liability law of India and to implement the 2008 deal for cooperation in civil use of atomic power.

With Modi Government raising foreign investment cap in defence sector to 49 per cent, US companies see new opportunities in exporting military hardware to India, with both sides keen to take it beyond buyer-seller ties.

Sharif’s visit to New Delhi on an invitation from Modi to attend the swearing-in ceremony of the new Government of India on May 26 and the meeting between the two the next day raised hope for a thaw between India and Pakistan.

The hope was belied though, as Pakistan Army continued to violate ceasefire along the LoC and the trial of the 26/11 accused in Pakistan remained tardy. New Delhi called off Foreign Secretary-level talks with Islamabad as the latter consulted Kashmiri separatists before the parleys.

The Modi-Sharif handshake in Kathmandu and telephone talk between the two after the terror strike at a school at Peshawar in Pakistan again fuelled speculation about resumption of talks in early 2015, but bail to a 26/11 plotter raised doubt about Islamabad’s seriousness in combating terror.

Chinese President Xi Jinping’s visit to Ahmedabad and New Delhi saw Beijing pledging to set up two industrial parks in Gujarat and Maharashtra and to invest $20 billion across India over the next five years.

These may help address India’s concerns over growing imbalance in its trade with China to a certain extent. But a rerun of a 2013 stand-off along the LAC at Ladakh during Xi’s visit proved that raising the economic stake might not be enough for New Delhi to manage its complex ties with Beijing.