Obama savours $10b trade bonanza

Obama announces $10 billion in business deals as he arrived in India to boost his country’s exports and jobs.

MUMBAI: US President Barack Obama announced $10 billion in business deals on Saturday as he arrived in India to boost his country’s  exports and jobs after a mauling in mid-term polls, but he ran into immediate controversy over Pakistan.

Obama flew into Mumbai, India’s financial hub, and announced that the US would also relax export controls over sensitive technology, a demand of India’s that will help deepen US ties with the emerging global power and its trillion-dollar economy.

While most of the announced deals had been pending for months, Obama’s visit, the first leg of a 10-day Asian tour, has been hailed as moving the US closer to India as Washington tries to revive a weak economy and gather support to pressure China on its currency.

“The United States sees Asia, especially India, as the market of the future,” Obama told a meeting of US and Indian business leaders. “There still exists a caricature of India as a land of call centres and back-offices that cost American jobs. But these old stereotypes, these old concerns, ignore today’s realities.”

Obama’s first act was to pay tribute to victims of the 2008 Mumbai attacks, but he was criticised for making no reference to India’s traditional foe Pakistan, which New Delhi blames for harbouring anti-India militants.

“We visit here to send a very clear message,” Obama said after meeting the victims’ families at the Taj Mahal Palace Hotel, the iconic landmark that symbolises the Mumbai attacks.

“In our determination to give our people a future of security and prosperity, the United States and India stand united.”

Saturday’s Taj speech highlighted the diplomatic test for Obama. Indians want a strong statement against Pakistan for fostering militants, but Washington must tread a fine line between appeasing New Delhi and supporting US regional ally Islamabad.

But Obama’s trip is also about business, with China now ahead of the US in trade with India. The $10 billion in deals will support 54,000 jobs in the US, White House aide Michael Froman said.

The White House also announced Obama would support India’s membership of four global non-proliferation organisations, a move that will reassure New Delhi – left out of these groups after its 1998 nuclear tests – that Washington is recognising its global clout.

Obama will also visit Indonesia, South Korea and Japan on the Asian tour that will see Washington push to prevent countries unilaterally devaluing currencies to protect their exports, a top theme at the Group of 20 heads of state meet in Seoul next week.

Obama flew by helicopter to the Mumbai seafront before heading to the Taj hotel. Onlookers pressed up against police barricades along the motorcade’s short route.

With armed police at every road intersection, southern Mumbai was turned into a fortress with police outnumbering onlookers. Snipers kept vigil on the top of buildings along the route.

TV stations were abuzz with most Indian commentators surprised about the softness of Obama’s Taj speech.

“This was a guarded statement,” strategic analyst Mahroof Raza told the Times Now news channel. “No mention of Pakistan conveys that Pakistan is key to their (Washington’s) Afghan policy ... and, therefore, Pakistan will not be brought to book.”

The opposition also criticised the speech.

“Knowing full well that Pakistan and Pakistani machinery has been used for perpetrating terror in India, by not acknowledging it he has disappointed the country as a whole,” said Rajiv Pratap Rudy, spokesman for the Bharatiya Janata Party.

Obama heads to New Delhi on Sunday. On the agenda will be lucrative defence ties. The US has held more military exercises with India in the past year than any other country, and US firms Boeing and Lockheed Martin Corp are bidding for a $11 billion deal for 126 fighter jets.

Washington still faces a host of hurdles, including Indian worries that signing defence pacts – which are necessary for the US arms sales to go through – may land New Delhi in a wider entanglement with the US military.

Also, an increase in US visa fees, a ban on offshoring by the state of Ohio and the Indian IT industry’s portrayal in campaign publicity as a drain on US jobs have set a frosty tone in India.

Highlights of deals

Sale by Boeing of 30 new 737 aircraft, worth $2.7 billion, to private Indian airline SpiceJet.

However, details are still being ironed out on the Indian purchase of 10 Boeing C-17s military transport planes, worth about $4.5 billion. The White House said the two sides had reached preliminary agreement on the sale.

Sale by GE of fighter 107 F414 jet engines to the Indian military. The deal is worth over $800 million.

A separate deal with GE worth $500 million for the sale of six heavy duty gas turbines and three steam turbines to India’s Reliance Energy Ltd.

Harley-Davidson plans a new plant in India to assemble American-made motorcycle kits. The iconic US motorcycle maker announced in January it would launch 12 models in India this year.

The White House said India had identified GE subsidiary GE

Transportation, based in Erie, Pennsylvania, and Electro-Motive

Diesel, of LaGrange, Illinois, a unit of Caterpillar Inc, as bidders to supply Indian railways with over 1,000 diesel locomotives over 10 years.

Published in The Express Tribune, November 7^th, 2010.