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Mandira Nayar
Mandira Nayar


More bling, less benefit

68modicongress Centre of attention: Modi addressing the US Congress in Washington, DC, on June 8

Narendra Modi’s recent American trip was high on spectacle, but low on substance

China loomed large when Prime Minister Narendra Modi met US President Barack Obama at the White House on June 7. As Modi embraced Obama in the Oval Office and promised to work shoulder to shoulder, the message was clear. India is not alone; it has America by its side.

For Modi, it was a gruelling trip—he slept three nights on the plane and visited five countries. But the trip comes at a time when the Nuclear Suppliers Group (NSG) is all set to discuss India’s bid to become a member.

China is the “glue that will bind” America and India “together”, wrote Nicholas Burns, former US undersecretary of state for political affairs, in a piece in the Washington Post. According to him, the “newly aggressive China” presents a dilemma for both India and the US. For India, it is China’s growing friendship with Pakistan; for the US, it is China’s increasing assertiveness in the South China Sea. The threats have pushed India and the US closer.

Like everything with Modi, the trip was spectacular. He inaugurated the Salma Dam in Afghanistan, signed energy security deals with Qatar, ensured Switzerland’s support for India’s entry into the NSG and addressed the US Congress. “In the fall of 2008, when the Congress passed the India-US Civil Nuclear Cooperation Agreement, it changed the very colours of leaves of our relationship,” Modi told the Congress.

The tour had energy; it had photo-ops; it had historic moments. But, what it did not have is significant takeaways. Modi’s fourth visit to the US took bilateral relations forward, but not much. The text of the defence deal, which is the lynchpin of the American doctrine of ‘pivot east’, remains frozen, as it had been when US defence secretary Ashton Carter visited India in April.

Differences over expectations have emerged. US sources said India had agreed to ratify last year’s Paris agreement on climate change. Indian sources quickly clarified that India would ratify it “as soon as possible”. But no date was set.

India’s thorny issue is capping emissions. For the US, it is India’s refusal to join the export control regime. Despite the Modi magic, both these issues remain unresolved.

A tangible takeaway has been the six Westinghouse reactors to be built in Andhra Pradesh. The deal, which has been in the making for more than a decade, has finally moved to the signing stage. The buzz was that the paperwork for the deal was to be signed by March, but it was pushed back for this meeting. Taking one step forward, the joint statement welcomed the “start of preparatory work on site in India for six AP1000 reactors”. The finance is being worked out by India and the US Export Import Bank. The two sides will work towards financing the contractual agreements by next year.

In his speech at the US Congress, Modi, said, “Civil nuclear cooperation, as I told Obama yesterday, is a reality.” The big question, however, is the limited liabilities issue, and how it has been resolved. “It is a grey area,” said Rakesh Sood, who served as India’s permanent representative at the UN Conference on Disarmament.

The US has been pushing hard for India to remove legislation that puts the onus on the supplier to provide compensation in the event of an accident. The Indian government has tried to assuage the fears by creating an insurance pool and capping the limit of the damage. The issue, however, remains unresolved. “We are encouraged by the progress made over the last year,” Nisha Desai Biswal, assistant secretary of state for south and central Asian affairs, told the senate foreign relations committee last month. “In particular, India ratified the Convention on Supplementary Compensation for Nuclear Damage, which was an important step toward creating a global nuclear liability regime. I am confident we will see progress on this critical part of our partnership soon.”

The ‘progress’ in the liabilities issue, which is as yet undefined, will determine the success of India’s civil nuclear programme. The promise to start work means movement, but it might be too optimistic to say the Westinghouse deal is done.

Unlike Manmohan Singh, Modi seems to be confident that he will be able to overcome hurdles to fulfil his American dreams. The question is, what will it take? “Legislation will be very tough,” said Sood. “He will have to hope that the creation of the insurance pool and the assurances will be enough to convince the Westinghouse legal team.”

The devil could well be in the details of the agreement. Anja Manuel, a former US state department official who worked on the deal, said, “I believe there are still some sticking points in the legal details. The issue has mostly been worked out, and my understanding is that Westinghouse and others are optimistic about the proposed Government of India-backed, Rs1,500-crore insurance pool.”

The question now is how Modi, whom Burns described as a “foreign policy prime minister”, would manage the domestic front to realise his grand foreign policy vision.

Another objective of Modi’s trip was to secure membership of one of the most exclusive clubs in the world—NSG. By ensuring the support of Switzerland, which, in 2008, had opposed granting a waiver to India to conduct nuclear trade, India is now one step closer to gaining entry into the 48-member group.

“It is now or never,” said Uday Bhaskar, director of Society for Policy Studies, Delhi. “We don’t know what the next White House will be.” It was also a chance, he said, for India to “smoke China out”. The NSG voting will give India a chance to see whether the chemistry between Chinese President Xi Jinping and Modi is more than just selfie diplomacy.

68modiobama Modi at the Oval Office with Obama on June 7

India’s bid for NSG membership has received a shot in the arm with its guaranteed entry into the Missile Technology Control Regime (MTCR). “This is a smart game,” said Rajiv Nayan, senior research associate at the Institute for Defence Studies and Analyses, Delhi. “It is a message to China.”

The MTCR, a group of 34 countries that seeks to limit the proliferation of missile and missile technology, excludes China. The MTCR’s decision to let India into the club, especially when the prime minister was on foreign shores, is a big win.

This, however, does not ensure that opposition to India’s entry into the NSG, especially from China, will be any less. While countries have expressed their willingness to welcome India into the group, with Australia leading the way, the question is whether Obama would be able to stick his neck out for Modi. “It depends on what the understanding between America and China is…. It involves complex negotiations,” said Alka Acharya, director and senior fellow at the Institute of Chinese Studies, Delhi. It also boils down, she says, to how far the US is willing to go to accommodate India in the club. “Wouldn’t the Americans conveniently use the Chinese opposition to express helplessness in the matter?” she asked.

The promise of support by the Americans is sometimes just that—a promise. A case in point is the support Obama had promised Modi for securing India a permanent seat in the UN Security Council.

Manuel, in her new book This Brave New World, writes that the statement promising support is “the right approach, and a shrewd diplomatic move. In the short run, it is also an empty gesture.” To be part of the council, India would need a “bewildering number of proposals”. She recounts how, when India was a non-permanent member in the council from 2011 to 2012, diplomats “nearly tore their hair in frustration” on India’s insistence on vetoing the establishment of a no-fly zone that allowed military intervention in Libya.

The backing of India’s position for NSG may just be that—a shrewd diplomatic move. But, for Modi, the dream of gaining entry into the NSG has become a foreign policy mission. Perhaps, he would do well to remember what Manuel says—India can do business even without the NSG membership.

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