India and the United States on January 25 announced policy resolution on two key issues paving the way for a nuclear trade within the ambit of domestic laws and international obligations. The pact ends a six-year old stalemate in operationalizing the path-breaking civil nuclear agreement. The agreement was signed in New Delhi by Prime Minister Narendra Modi and the visiting US President Barack Obama, who was the chief guest at the 2015 Republic Day parade. The 123 or civil nuclear deal was inked between India and the United States in October 2008. The pact, however, failed to deliver business for US companies.
Breakthrough in Civil Nuclear Deal
There was a “breakthrough” in civil nuclear agreement and both countries have sorted out the two pending issues. The American companies were concerned over the Indian nuclear liability laws that apply to the equipment suppliers in the event of an accident. They have also demanded tracking of fuel supplied by the United States and other nations for the proposed nuclear power plants. While India will create an insurance pool to tackle the nuclear liability issue, on tracking it stated the matter will be dealt with under the International Atomic Energy Agency (IAEA) safeguards.
The civil nuclear deal was the centerpiece of our transformed relationship, which demonstrated new trust. It also created new economic opportunities and expanded our option for clean energy.
Primary among these is the Defense Technology Trade Initiative (DTTI) which not only intensifies military-to-military cooperation but also puts the spotlight on technology transfer and joint production, which India has been seeking with almost all its military partners.
The January 25 deal builds on the first plan that was signed in 2005 and provides the blueprint for India-US defense cooperation for the next 10 years. If the 2005 DTTI was historic for breaking the ice and laying the groundwork for an unprecedented partnership, the 2015 version marks a definite shift from a transactional relationship to a more organic one. In other words, if the past decade saw India sourcing an increasingly large proportion of its defense needs from the United States — by some estimates, India bought $10 billion worth of military hardware from the United States — the next decade will see the two countries sharing technology and co-producing weapons.
Delhi Declaration of Friendship
In addition to the major civil nuclear deal, both the Indian prime minister and the US president issued a 59-point statement encompassing the entire gamut of relationship, decided to renew the decade-old defense framework agreement for another
10 years and within it opened the defense technology and trade initiative. Both India and the United States issued a Delhi Declaration of Friendship — Shared Effort, Progress for All — in keeping with national principles and committing to hold regular summits with increased periodicity, elevate strategic dialogue, establish hotlines between the Indian prime minister and the US president and national security advisers, besides cooperating to develop joint ventures on strategically significant projects.
On clean energy, Washington is keen to work with New Delhi on the ambitious project of 100 gigawatt of solar energy by 2022 and air monitoring for megacities.
On Climate Change, the Indian prime minister said there was an urgent need to address the issue. He, however, said there was no pressure to work out an arrangement that the United States has with China.
Focus on Bilateral Ties
Noting that the multifaceted partnership between Washington and New Delhi is rooted in shared values of democracy and strong economic and people-to-people ties, the Indian prime minister and the US president elevated the bilateral relationship through their endorsement of a new India-US Delhi Declaration of Friendship, which builds on their September 30 Vision Statement by articulating tangible principles to guide ongoing efforts to advance mutual prosperity, a clean and healthy environment, greater economic cooperation, regional peace, security and stability for the larger benefit of humankind.
Joint Strategic Vision for Asia-Pacific and Indian Ocean Region
India and the United States also issued a joint strategic vision for the Asia-Pacific and Indian Ocean Region to support regional economic integration by accelerated infrastructure connectivity, safeguard maritime security in ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea.
Prime Minister Modi President Obama stressed the need for joint efforts to disrupt terror entities, including the Lashkar-e-Taiba (LeT), D Company and the Haqqani Network, and asked Pakistan to bring the perpetrators of 26/11 attack to justice. Pakistan-based terror outfits that are not just a threat to India, but also spawn the jihadi network worldwide, are on the joint target list.
Obama said there should be no distinction between terror groups and pressed for countries to fulfill their commitment to wipe out terror safe havens.
Finally, the establishment of two hotlines — one between the two heads of Government and another between the two National Security Advisors — also speaks volumes about deepening cooperation between the two countries.
Agreement on Smart Cities
India and the United States signed three Memoranda of Understandings (MoUs) on January 26 to give a boost to the Center's flagship “smart cities” scheme. Washington has agreed to partner with Indian in developing three smart cities in Allahabad, Ajmer, and Visakhapatnam.
Three MoUs were signed by the representatives of United States Trade and Development Agency and the respective Chief Secretaries of State Governments of Uttar Pradesh, Rajasthan and Andhra Pradesh in the presence of Union Urban Development Minister M. Venkaiah Naidu.
As per the agreemets, the United States will assist the cities in project planning, infrastructure development, feasibility studies and capacity building.
Business and Other Areas
The US president also announced a slew of initiatives that included $4 billion in loans from US banks, $2 billion in financing for renewable energy projects in India and $1 billion from the Exim Bank of the United States for project financing. Executive action to help Indian techies who currently have to undergo a painful and agonizing process of obtaining H-1B visas, to get legal permanent status (LPR), was also on the cards
India and the United States were moving in the right direction and there was untapped potential to be realized. Bilateral trade between the two countries had increased 60 per cent in the past couple of years to a record $100 billion, but India’s exports to the United States were still less than 2 per cent of all US imports, he said welcoming the Modi government’s reforms agenda for making it easier to do business in India.
This has been made possible, of course, by smartly balanced laws that fully comply with India’s World Trade Organization (WTO) obligations on intellectual property while incorporating protections that support public health. These laws have ensured a strict review of patent applications to avoid spuriously granting monopolies on drugs that are not actually new or innovative or whole new patents on minor changes to existing drugs. India has also focused on its WTO obligations rather than implementing excessive IP rules that undermine health, such as “data exclusivity” which, in the United States, makes clinical trial data private to create a whole additional monopoly separate from patents that prevents approval for generic drugs for periods of time.Needless to say, the major multinational pharmaceutical companies oppose India’s finely balanced intellectual property system and are trying to topple it. What is less understandable is why the Obama administration would be backing their drive.