It’s a pivot to a different part of Asia, if you like.
President Barack Obama rounded off his visit to India Tuesday with the ambitious claim that “India can be America’s best partner” in the 21st century, underlining the realization of its need to find a counterweight to the rising power of China in the region.
Obama balanced his bullishness with a few words of warning on the need for India to protect religious freedom and women’s rights, but was determined to play up the common ground shared by the world’s two largest democracies, a line that Indian Prime Minister Narendra Modi has also plugged with other Asian democracies such as Japan.
“Despite our imperfections, our two nations possess the keys to progress in the century ahead. We vote in free elections. We work and we build and we innovate,” Obama said. ”We respect human rights and human dignity.”
His speech came at the end of a two-day visit that saw multi-billion pledges of U.S. investment in a country that is lagging its eastern rival in economic and political clout.
Trade relations between the two have been rocky for much of recent history, with the U.S. in particular frustrated at India’s protection of its domestic industries and agriculture.
India only accounts for 2% of U.S. imports and 1% of its exports, Obama said. While annual bilateral trade had reached $100 billion, that is less than a fifth of U.S. trade with India’s neighbour, China.
“Every one here will agree, we’ve got to do better,” Obama told Indian and U.S. business leaders Monday.
Relations have started to thaw in recent months, however, as Prime Minister Narendra Modi has placed a greater emphasis on attracting foreign investment to the country. In return, the U.S. has dropped some of its objections to India’s agricultural subsidies.
Modi said U.S. investment in India had doubled in the past four months and vowed to do more to slash the country’s notorious red tape and make it one of the world’s easiest places for business.
Obama said that U.S. Export-Import Bank would finance $1 billion in exports of ‘Made-in-America’ products. The U.S. Overseas Private Investment Corporation will lend $1 billion to small- and medium-sized enterprises in rural areas of India.
For renewable energy, a priority for Modi, $2 billion will be committed by the U.S. Trade and Development Agency for renewable energy, Obama said.
India is the world’s third-largest greenhouse gas emitter and often acts as the voice of the world’s developing countries in United Nations talks on everything from climate change to economic cooperation.
It is reluctant to commit to emission targets on the ground that this could hinder economic growth, which is vital to lifting millions of Indians out of poverty. Instead, Modi has made it a priority to expand India’s renewable energy capacity and lessen the need for polluting fossil fuels.
“We very much support India’s ambitious goal for solar energy, and stand ready to speed this expansion with additional financing,” Obama said in a joint press conference with Modi on the first day of his three-day visit to New Delhi.
India is seeking investments of $100 billion over seven years to boost the country’s solar energy capacity by 33 times to 100,000 megawatts.
First Solar (FSLR) and SunEdison Inc are two U.S. solar companies that already have sizeable businesses in India, and together with local firms, are expected to invest $6 billion in India in the fiscal year to March 31 and $14 billion in the next fiscal year.
The two leaders also reached an agreement in principle to unblock trade in civil nuclear technology, an area where India is already trying to attract investment from Russia.
The new deal resolved differences over the liability of suppliers to India in the event of a nuclear accident and U.S. demands on tracking the whereabouts of material supplied to the country, U.S. ambassador to India Richard Verma told reporters Monday.
“Ultimately it’s up to the companies to go forward, but the two governments came to an understanding,” he added.