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President Obama’s India Visit by Edelman India - Public Affairs
President Obama’s
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President Obama’s India Visit by Edelman India - Public Affairs
Areas of discussion
While trade between India ...
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President Obama’s India Visit by Edelman India - Public Affairs
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President Obama’s India Visit by Edelman India - Public Affairs
Itinerary of President Obama
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President Obama's India vist

A note on President Barack Obama's visit to India for India's Republic Day celebrations. The note overviews the visit, gives an analysis by Mr. T S Vishwanath, and the likely discussion areas between the two leaders during the visit
Published on: Mar 4, 2016
Published in: News & Politics      

Transcripts - President Obama's India vist

  • 1. 1 | P a g e President Obama’s India Visit by Edelman India - Public Affairs President Obama’s India Visit Overview On November 21, 2014 Prime Minister Narendra Modi tweeted about his invitation to the President of the United States, Barack Obama, to be the Chief Guest at the 66th Republic Day celebrations. The invitation, which the American leader accepted, was hailed by the media as a diplomatic coup. The President will be the first American chief of state to visit India twice during his incumbency. He will also be the first President to be received as the guest of honour at the Republic Day celebration. After the much talked about 4-day visit of the Indian Prime Minister to the US in September 2014, this visit is likely to take forward the government's strategic policy of multi-alignment and pursuance of close ties with each of the world's major power centres. The President, who is travelling with the First Lady, his daughters and a delegation consisting of government officials and industry leaders, will meet with the Prime Minister and several Indian officials “to strengthen and expand the US-India strategic partnership”. Several CEOs from Fortune 500 companies are expected to accompany the President. These include Harold Terry Mcgraw of Mcgraw Hill Financial, Indira Nooyi of Pepsico and Ajay Banga president, and CEO of Master Card, among others. The primary focus of the meetings during the visit is likely to be on trade and investment as both India and the US seek to advance their business focus. The Obama administration’s goal is to increase bilateral trade to $500 billion a year from about $100 billion currently. The leaders of the two countries, both from government and business, are expected to discuss increased co-operation in areas such defence, security, energy (renewable and nuclear), climate change, insurance and financial services, bilateral and multilateral trade, and issues such as transfer pricing. The discussions during the visit are also likely to focus on promoting manufacturing in India under the ‘Make in India’ banner and building of smart cities, where American firms like Dell, IBM, Cisco have shown interest. Over the past two decades the India-US relationship has progressed significantly. Indian and American trade and investment are buoyant, defence trade has surged, and strategic consultations, intelligence sharing and counter-terror cooperation have become more closely aligned. It is accepted that a strong, successful and prosperous India is good for the US, and vice versa. The summit is being seen as an opportunity for an all-encompassing look at geopolitics and geo-economics across the region and beyond. The real challenge for the “natural partners”, going forward, will be expanding the relationship, deepening strategic and economic cooperation and setting newer and bigger goals for the relationship. Contents Page 2 India-US Trade Insights Page 3 Areas of Discussion Page 6 Itinerary of the President Friday, January 23, 2015
  • 2. 2 | P a g e President Obama’s India Visit by Edelman India - Public Affairs India-US Trade Insights T S Vishwanath, Senior Advisor - Public Affairs The Modi-Obama dialogue in New Delhi on 26th of January 2015 and the other discussions on the sidelines between officials and industry from both sides is expected to focus a lot on bilateral trade and investment issues. In fact, a bilateral investment agreement has been billed as a big-ticket item for the US President to take up with India. The two sides have bilateral trade of around US$100 billion at present and have set a target of US$ 500 billion for the next two years. To achieve US$ 500 billion of trade a lot will have to change between the two sides. And it is specifically the details that the two sides are expected to address in the forthcoming meeting. A bilateral investment treaty (BIT) with India will remain a top agenda for both the government and business in the US in the forthcoming meetings. US business has been clear that for investments to grow to India there is a need for a BIT. The Indian government, however, wants to make some changes to investor-state disputes section in the model BIT before negotiating with the US. The last round of discussions between the two sides happened in 2011. The other issues for the US include issues related to high levels of duty on products like wine and spirits and India’s stand on patents regarding pharmaceutical products, and clinical trials as also piracy besides others like the current Indian government view on e- commerce. These issues are also expected to figure at the India-US CEO Forum, which will also meet on January 26. The USITC is of the view that if tariff and investment restrictions were fully eliminated and standards of intellectual property protection in India are “made comparable to US and Western European levels” then US exports to India would rise by two-thirds, and US investment in India would roughly double. From the Indian side the main issues relate to a Totalisation Agreement, which will be beneficial for Indian companies that are based on the US and employ Indian nationals. The Totalisation Agreement would ensure that the Social Security contributions by Indian nationals are refunded to people when they return to India after short stints in the US. The biggest thrust from the Indian side is expected to be the “Make in India” initiative where it will seek US investments into India. Total US investments into India since the year 2000 are around US$ 14 billion and New Delhi is of the view that this can jump significantly in the coming years. While both sides realise that it would be too early to start any discussions for a possible free trade agreement what they would look for are areas where there can be harmonisation of standards and procedures to ease investment and trade flows. The biggest challenge for India would be to convince US businesses and government that investments would be safe in the country. Both New Delhi and Washington do not seem to be moving towards any big-ticket announcement on trade during President Obama’s visit. But what is expected to change is the level and frequency of dialogue. After a long impasse there has been a spurt in the interaction between the two sides since Prime Minister Modi’s visit to the US. This visit is expected to further boost that process. The dialogue process could then help in developing greater business involvement in the coming months.
  • 3. 3 | P a g e President Obama’s India Visit by Edelman India - Public Affairs Areas of discussion While trade between India and the US has grown over the past decade - from $24 billion in 2003 to over $90 billion in 2013 - there are significant opportunities to deepen the relations between the two countries. The visit’s primary discussion focus is likely to be on furthering trade between the two countries. In this regard a revival of the Bilateral Investment Treaty (BIT) is likely to be broached by the US. India may also push for securing early passage of the Generalised System of Preferences scheme, the trade enhancing regime that has long facilitated India’s exports to the US. Intellectual Property Rights (IPR) In December 2014, the US Trade Representative (USTR) issued a statement on a review of India's IPR system. The USTR listed India as one of the countries with the "most significant concerns" regarding weak IPR laws. The US is likely to begin its review in February with a report due in April, which makes the discussion on the issue during this visit a very important one. The talks are likely to focus on India's new IPR policy and ironing out differences between the two countries. The discussions are likely to broadly cover areas such as copyright, traditional medicine, trademarks, patents and access to healthcare Bilateral agreement on Tax India is likely to discuss a bilateral tax agreement with the United States to aid foreign investment in the country. The pact, which industry executives say would specifically target the prickly issue of transfer pricing, is part of the Indian government’s broader push for bilateral tax deals with top trading partners including Britain. Under the discussion the Indian government is likely to decide pricing agreements, which set the tax liability of the transfer pricing value. Manufacturing The talks on manufacturing are likely to focus on steps taken under the ‘Make in India’ campaign banner. The working groups are likely to discuss issues related to labour laws and environmental clearances. This follows the decision taken by Commerce and Industry Minister Nirmala Sitharaman and US Trade Representative Michael Froman at the recent Trade Policy Forum (TPF) meeting to exchange information on stakeholder participation in framing of trade and investment policies and procedures. At the meeting, the US had highlighted the importance of providing a transparent and predictable policy environment to help attract investments in manufacturing. The US is likely to seek more clarity on land acquisition and taxation processes. Infrastructure development and participation of states in manufacturing are also likely to be discussed. Foreign Direct Investment The Modi government is likely to discuss two big-ticket reforms that the US has been pushing for – FDI in multi-brand retail and further increasing the FDI limit in defence to 100 percent which the Modi government had recently raised from 26 percent to 49 percent. Discussions are also likely to take place on the liberalisation of current FDI restrictions in the e- commerce sector Insurance and Financial Services The US sees India’s insurance sector as a challenge as the opening up of the insurance sector through legislation has not progressed in the Indian Parliament. The Ordinance clearing 49% FDI in the insurance sector may still not attract investors due to its temporary nature. This is likely to become one of the important talking points of the visit. Immigration India is likely to discuss with President Obama his administration’s policy on high-tech immigration and other issues like social security totalisation. According to recent research by the Peterson Institute of International Economics, the economic value of Indian migrants in America is close to $50 billion per annum. The ‘totalisation agreement’ is essentially for migrants who spend their working lives across the two countries by protecting their benefits and removing legal obstacles from receiving them in another country Energy Discussions are likely to focus on cooperation on the energy challenges in India. India has a huge demand- supply gap in the availability of energy which is
  • 4. 4 | P a g e President Obama’s India Visit by Edelman India - Public Affairs resulting in recourse to expensive diesel-based back- up generator systems and an increasing reliance on import of fuels. For India’s energy security there is an urgent call for enhancing investments in energy production and generation and in maximising the use of domestically available energy resource. The US and India have a shared interest in the development and use of clean energy technologies. Therefore, renewable energy is likely to be high on the agenda, with the PM’s endorsement for an expansion of the role of renewable energy in India’s energy economy. For its focus on Solar, the Indian government is likely to initiate a discussion on accessing technology and developing manufacturing capabilities An outstanding topic for the two leaders is the civil nuclear initiative. This includes addressing the issue of nuclear liability that has prevented American companies from participating in India’s atomic power programme. The discussions are also likely to address India’s concerns about administrative arrangements for monitoring the sensitive parts of India’s civilian nuclear cycle and facilitating India’s early membership of global non-proliferation regimes such as the Nuclear Suppliers Group. Climate Change There is a likelihood of detailed discussions on the possible commitments by both countries towards reducing greenhouse gas emissions. An agreement between the US and China was announced last November and an upcoming landmark climate change meeting in Paris at the end of 2015 appears to have made matters urgent. Defence and Security India's arms purchases of $400 million in 2001-2004 has expanded to $5.7 billion between 2009 to 2013. Over the next two years, India could buy another $8.3 billion worth of US arms. With Mr. Modi’s Make in India campaign New Delhi is likely to reinforce its preference for co-manufacturing and co-developing weaponry. The India-US Defence Trade and Technology Initiative (DTTI) is likely to discuss these primary objectives of promoting collaboration in defence technology and enabling co-production and co-development of critical and modern defence systems. A highlight of the visit could be the signing of a New 10- year Framework Defence Agreement between the two countries. The focus of the framework is expected to be on strengthening of intelligence systems and electronic defence systems for defence modernisation in which US is the pre-eminent leader. Furthermore, Indian and US officials may discuss the issue of sharing defence information and intelligence cooperation. Common platforms of co-operation during crisis situations are also expected to be on the agenda. International Strategy China is likely to be a topic of discussion with focus on more strategic co-operation between India and the US. Given China’s soaring defence budget, nations around the region are investing more to even out the balance of power. Experts believe it is in the US’s interest that there be a strong India — an India that is prosperous and contributing to a stable Asia and Indian Ocean. India and the US are also preoccupied with Afghanistan’s future. The two leaders are likely to discuss further efforts to stabilise Afghanistan after the withdrawal of most NATO forces. Co-operation on military field hospitals and personnel to help the Afghan Army and Air Force are likely areas of discussion. The discussion on Pakistan is likely to focus on concerns around rising terrorism in the country. The US and Pakistan have close ties and India is likely to pursue talks about a no-tolerance policy towards terrorism and cross-border action. India is likely to push for a strong statement against Pakistan’s support of terrorism as Secretary of State John Kerry had made during his visit recently Experts believe the use of military to contain terrorism can be counterproductive and to deal with terror, the two countries are likely to push for political, intelligence, religious messaging, and police cooperation strategies. Prime Minister Modi and President Obama are likely to give US-Indian cooperation in counter terror the highest priority.
  • 5. 5 | P a g e President Obama’s India Visit by Edelman India - Public Affairs Itinerary of President Obama Date Programme January 25th US President Barack Obama arrives at 10am Ceremonial welcome ceremony at Rashtrapati Bhavan President Obama to lay wreath and pay homage at Mahatma Gandhi memorial at Rajghat Bilateral discussions at Hyderabad House: PM Modi and President Obama to first have a restricted meeting, followed by delegation-level talks over lunch PM Modi to host lunch for President Obama Meeting and dinner hosted by President Pranab Mukherjee January 26th President Obama to be chief guest at Republic Day function Will attend At-home reception of President Pranab Mukherjee President Obama and PM Modi will address events with business leaders during the afternoon. January 27th Address by President Obama on 'India and America: The Future We Can Build Together' at the Siri Fort Auditorium. Visit Agra with family to see the Taj Mahal Townhall event with the Prime Minister Departure Contact Us @ Edelman Public Affairs Edelman India’s Public Affairs (PA) practice combines industry, regulatory affairs and communications knowledge to develop and execute PA campaigns based on solid research and insights that inform impactful strategies. We work with our clients to anticipate issues; plan and respond to the emerging challenges at national, state and local levels. Edelman India has offices in Mumbai, Delhi, Bangalore and a vast network of representatives in state capitals. Contact the PA practice: Rakesh Thukral, Managing Director rakesh.thukral@edelman.com Peter Bellini, Associate Director, Head of Public Affairs peter.bellini@edelman.com Our office: Edelman India Private Limited Vatika Triangle 6th Floor, Sushant Lok - 1, Block A Gurgaon, Haryana 122 002, India @EdelmanIndiaPA

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