When it comes to relations with business, the positions of President Obama and Prime Minister Modi are about as far apart as D.C .and Delhi. Obama’s relationship with the Fortune 1000 ranges from fraught to hostile. India’s Narendra Modi, eager to jump-start foreign investment, courts CEOs.
But that hasn’t gotten in the way of a budding bromance between these two world leaders. It was on full display Sunday as Modi broke protocol to hug Obama while the U.S. president disembarked from Air Force One in New Delhi.
“The two leaders have surprised everyone with the speed and scale with which they’ve decided to take this relationship,” says Tanvi Madan, director of the Brookings Institution’s India Project.
For a president who has been sharply criticized for a failure to build personal friendships with world leaders, Obama’s special place in Modi-world is striking. During his trip to New Delhi on Monday, Obama serves as chief guest at the country’s Republic Day parade—one of India’s highest honors and one never before offered to an American president. Protective of its neutrality and wary of disrupting economic ties to countries like Russia, Indian leaders tend to downplay the U.S. friendship in public.
Obama’s role as chief guest signals that “India has gotten over its psychological barrier of having the U.S. be this public partner—and acknowledging its role in helping India to rise,” Madan notes. The Delhi-born Madan is my guest this week on the Apple iTunes podcast Smart Women, Smart Power, sponsored by the Center for Strategic and International Studies (CSIS) in partnership with Fortune.
Madan credits the Modi-Obama friendship with a common interest in retail politics. “Modi is a showman who believes in communicating directly, including through social media [where] he tweets,” she notes.
Sound familiar? There’s more: The Indian prime minister’s campaign last year borrowed from Obama’s campaign, right down to “yes we can!” calls at rallies and the iconic Shepard Fairey “Hope,” “Change” and “Progress posters. (Modi’s themes were “Change,” “Action,” and “Unity.”)
Since his election last spring, Modi has hung an “open for business” sign on his country and encouraged foreign investors to overlook the country’s checkered history toward outside firms. On Sunday, the two leaders announced a breakthrough plan to enable U.S. investment in India’s nuclear energy industry.
In the U.S., which is India’s 6th largest investor, wary CEOs have shown renewed interest in India, hopeful that this might be similar to the opportunity that China offered to pioneering firms two decades ago—but with an already established rule of law.
In our podcast conversation, Madan details the reforms Modi has pursued, sometimes using executive actions to bypass legislative opposition. Nothing so far adds up to the big-bang change that business was hoping for, and Madan cites slow progress and an uncertain business climate as valid reasons for concern.
Still, here is Madan’s advice to prospective investors: “If you’re willing to be in it for the long haul, you are going get returns. But expecting immediate returns—that’s not going to happen. The American businesses that have done well there—Ford, Boeing, GE—have really made an investment in the country, to stay there for the long term. And they’ve actually done well by it. Ford has opened its largest manufacturing plant any place outside the U.S.”