India’s Obamaze

As the White House awaits its first black inhabitant, there is growing speculation among the inhabitants of 7 Race Course Road (present and prospect) and Parliament members that there may be a digression from the current relationship between Washington and New Delhi. It is now widely believed that the election of Barack Obama may not present a hunky- dory story for the incumbents but would rather test New Delhi’s will and grit.

Barack Hussein Obama, slated to be sworn in as the President of the USA on January 20 next year will pose tough questions for his Indian counterpart. The president elect has stated succinctly the importance of the nuclear deal between the two democracies but would like India to sign the Comprehensive Test Ban Treaty (CTBT) before anything else. His Islamic connection notwithstanding Obama is keen to solve the Kashmir puzzle which he thinks would corroborate his stance on the Afghanistan war. To add to the plight of the information technology industry already trembling under an inevitable recession and appreciating value of the dollar, the 44th President elect has unequivocally stated his reluctance to outsource American jobs thus debilitating the demand for Indian service. It is also no secret that Obama would rather pursue protectionist policies than the free- trade rhetoric propagated by McCain and his acolytes, further hampering India’s exports of products, services and even human capital.

It may be only last night when the party for the ratification of the Indo-American nuclear deal took place but the hangover may lead India into rough weather and with the election of Senator Obama the future looks precarious. While the majority of the House of Senates had warmly supported the Bush proposal to bend the nuclear regime in favour of India, Obama was not one of them. He was one of the few senators who were not in favour of granting life time supplies of nuclear fuel to future Indian reactors and the nuclear deal could have been in jeopardy had he garnered greater support within the senate. While it seems like aeons have passed since he put on record that his administration would press for the US’s ratification of the Comprehensive Test Ban Treaty (CTBT) “at the earliest practical day”. This letter sent to Manmohan Singh challenges the official contention that the deal accords recognition to India as a nuclear weapons state. The Indian government might have received plaudits for clinching the nuclear deal but it is far from over as the Obama administration will press for India’s induction into the global nuclear order through the CTBT and keep a closer eye on the movement of nuclear material on Indian soil.

With the financial crisis enervating the American industry, protectionist measures like import barriers and export subsidies figure high on the Democrat prescription. Most US allies and trading partners are wary of the policies the Democrats will follow to tackle recession. There is growing consternation among nations as they anticipate higher import tariffs impeding trade and growth. Obama has always been an advocate for farm subsidies and labour standards for imports. Major agricultural exporters like India will be affected if Obama goes ahead with his plans of providing heavy subsidies for American farmers. This has also been one of the contentious issues which have brought the Doha Round of WTO talks to a standstill with developing nations being tooth and nail against such practices. The next US government seems eager to curtail outsourcing of services to India offering incentives like tax rebates for companies creating jobs for Americans. The issue of H1-B visas will also mitigate precious dollar remittances as a quid pro quo for the export of (Indian) human capital and skill.

The cliché, When the US catches a cold the world sneezes, implies that the rest of the world will need to swallow bitter pills as well and even internal conflicts are not spared the dosage. The Afghanistan war has consumed excessive lives and valuable resources. The new President has declared the solution to the Afghanistan problem of utmost priority preceding both Iraq and Iran. The young President elect even though a neophyte in international affairs believes the solution to this problem lies in solving the Kashmir conundrum. Obama believes that the sources of Afghan instability are in Pakistan which in turn is linked to Islamabad’s conflict with New Delhi, at the crux of which is Jammu and Kashmir. India’s current negotiations with Pakistan would cease if the US chooses to intervene, undermining current bilateral talks, the first in 45 years. The neighbours have made progress in recent years, because their negotiations have taken place in a bilateral context. India is clearly uncomfortable with an American involvement in its internal matters. It does not want another nation to impinge on its stance, already on treacherous grounds. The separatist lobby in Kashmir has welcomed Obama’s interest and concern. But New Delhi believes it could lead to a rise in militancy and destabilize the sensitive electoral process there.

Obama’s victory may have been hailed all over the world but the truth is that his regime will ask tough questions for India the outcome of which could strengthen or shrink India’s image. He is undoubtedly an inspiring leader who believes in unity and harmony among the countries of the world but at the same time will pose both difficult challenges and opportunities for India. India will need to find its way in this Obamaze to establish its stance as a potential world leader.

Nilesh Lodha

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