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U.S. Seeks to Bolster Relations With India --- Washington Envisions New Delhi as World Power; A Bulwark Against China?
By Jay Solomon and Neil King Jr.
1,298 words
15 July 2005
The Asian Wall Street Journal
A1
English
(c) 2005 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here http://awsj.com.hk/factiva-ns
WASHINGTON -- A state visit by Indian Prime Minister Manmohan Singh Monday is setting the stage for the Bush administration to significantly upgrade a relationship that many American conservatives believe should be the cornerstone of a new U.S. security strategy toward Asia.
Central to this policy is a desire for the U.S. to check China's growing economic and military might globally, as well as to partner with New Delhi to counter Islamic fanaticism out of such South Asian countries as Pakistan and Bangladesh.
Among the issues U.S. and Indian officials are expected to discuss next week are the Bush administration's plan to sell sophisticated new weapons systems and nuclear technologies to New Delhi. Mr. Singh, in turn, is expected to seek President George W. Bush's support in securing for India a veto-wielding permanent membership on the United Nations Security Council, as well as some semiofficial standing in the Group of Eight industrialized countries.
"We have very high expectations" for this state visit, said a senior Bush administration official working on its planning. "We're interested to help India become a world power." Mr. Singh will address a joint session of Congress Tuesday, and Mr. Bush is expected to attend a meeting of key Indian and American businessmen later in the week.
Aides to Mr. Bush said he has taken a particular interest in India since 1999, viewing its democracy and massive, and moderate, Muslim population as a stabilizing force for Asia and the Middle East. This positive sentiment only grew after the Sept. 11, 2001, terrorist attacks on the U.S., as former Indian Prime Minister Atal Bihari Vajpayee was among the first foreign leaders to call Mr. Bush and lend his country's support in the war against al Qaeda.
The Indian leadership said "you now understand what we've endured for a long time," recalls Robert Blackwill, who served as the Bush administration's ambassador to India at the time. Islamic militants operating out of Pakistan and the disputed region of Kashmir have launched a number of terrorist attacks inside India during the past 15 years.
U.S. officials seeking to build the partnership with India said they recognize that it will take time, and that squeamishness about Washington still runs deep in India after decades of determined separation. New Delhi tilted toward the Soviet Union during the Cold War.
The most recent case in point came when the two countries signed a defense pact late last month, after U.S. Defense Secretary Donald Rumsfeld gave an unusually warm welcome to his Indian counterpart, Pranab Mukherjee. No sooner had the ink dried than an outcry issued from various factions in India, particularly on the left.
"Guardedness becomes all the more essential," said an opinion piece in the Hindu, a large Indian daily, "when it pertains to...a super-power which regards all the world its fiefdom."
Many in India also are wary of any Bush administration designs to see the South Asian giant mainly as a friendly bulwark against China and as a huge new market for military hardware. India, with a defense budget this year of $17.5 billion, is the world's third-largest importer of defense items. Topping its shopping list are 116 fighter jets and 500 helicopters, which have companies like Lockheed Martin Corp., Boeing Co. and Bell Helicopter Textron Inc. knocking at the door.
Indian officials are quick to stress that their burgeoning relationship with the U.S. isn't directed against China. In April, New Delhi signed its own "strategic partnership" with Beijing, they said, and two-way trade between the long-standing rivals has boomed in recent years.
"I don't look upon our relations with the U.S. as meant to rival China," Mr. Singh said in a recent speech. "I look forward to enhanced cooperation with China."
Senior U.S. State Department officials also have said in recent interviews that Washington isn't seeking to develop a containment strategy toward China. But a number of American conservative strategists, both inside and outside the Bush administration, are calling for just that. On Wednesday, a forum on U.S.-India relations in Washington by the conservative U.S. India League described as almost inevitable a U.S.-China conflict.
India will provide "an economic alternative to when we need to face the Chinese challenge," said Alan Keyes, a former Republican presidential candidate and senior State Department official.
One significant barrier to the Bush administration's ambitious plans for India are legislative restrictions that block Washington from selling sensitive "dual-use" and civilian nuclear technologies to New Delhi. India has never signed the Nuclear Non-Proliferation Treaty, or NPT, and Washington sanctioned New Delhi after it conducted secret nuclear tests in 1998. Though most of the sanctions have been lifted, many counter-proliferation experts worry about leakages of sensitive technologies out of India, particularly to its neighbors such as Iran.
"What kind of signal are we sending by giving these technologies to India?" said Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a think tank in Washington. "You're encouraging countries to flout the NPT."
The administration may try to finesse a way around the many legal hurdles that stand in the way of selling nuclear technology to India, U.S. officials familiar with the matter said. Discussions are still underway as to how the Bush administration can offer assistance to India's nuclear-power industry without going too far, they said.
"The Indians have high expectations on nuclear, and I'm not sure we can fully satisfy them," said one U.S. official.
On the U.S. side, the Bush administration would like to see India open up more widely to U.S. investment, including in the retail and service sectors, and put in place more stringent export controls for sensitive technologies. U.S. officials complain that efforts to push ahead on some of these more brass-tack issues have bogged down in recent months, despite all the high-level talk.
Still, U.S. and Indian officials are expected to point to real progress on the economic front during Mr. Singh's visit. Two-way trade between the countries has boomed, with U.S. exports to India growing by more than 20% last year to $6.1 billion. And institutional investment by American funds in India jumped to nearly $10 billion for the fiscal year ending March 2005, from around $500 million for the previous fiscal year.
One hallmark of the India-U.S. meetings is expected to be the announcement by New Delhi of a comprehensive settlement of Dabhol, the failed Enron Corp. power project in India. Successive Indian governments and key U.S. investors in the $2.9 billion gas-fired plant, such as General Electric Co. and Bechtel Group Inc., have been in a negotiating standoff for nearly four years over unpaid debts after a local Indian government shut down the facility in 2001. U.S. officials said the dispute has been blocking other American companies from engaging in big-ticket infrastructure projects in India.
Both Bechtel and GE have agreed to payouts by the Indian government in recent weeks, U.S. officials said. And Mr. Singh is expected to announce the settlement next week.
"This is a major step forward in so far as improving the investment climate in India," said Ron Somers, president of the U.S India Business Council in Washington. "Resolution of Dabhol clears a major hurdle that had been a nagging legacy adversely affecting investment decisions in boardrooms all across America."
Document AWSJ000020050714e17f00010
© 2005 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
U.S. Seeks to Bolster Relations With India --- Washington Envisions New Delhi as World Power; A Bulwark Against China?
By Jay Solomon and Neil King Jr.
1,298 words
15 July 2005
The Asian Wall Street Journal
A1
English
(c) 2005 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here http://awsj.com.hk/factiva-ns
WASHINGTON -- A state visit by Indian Prime Minister Manmohan Singh Monday is setting the stage for the Bush administration to significantly upgrade a relationship that many American conservatives believe should be the cornerstone of a new U.S. security strategy toward Asia.
Central to this policy is a desire for the U.S. to check China's growing economic and military might globally, as well as to partner with New Delhi to counter Islamic fanaticism out of such South Asian countries as Pakistan and Bangladesh.
Among the issues U.S. and Indian officials are expected to discuss next week are the Bush administration's plan to sell sophisticated new weapons systems and nuclear technologies to New Delhi. Mr. Singh, in turn, is expected to seek President George W. Bush's support in securing for India a veto-wielding permanent membership on the United Nations Security Council, as well as some semiofficial standing in the Group of Eight industrialized countries.
"We have very high expectations" for this state visit, said a senior Bush administration official working on its planning. "We're interested to help India become a world power." Mr. Singh will address a joint session of Congress Tuesday, and Mr. Bush is expected to attend a meeting of key Indian and American businessmen later in the week.
Aides to Mr. Bush said he has taken a particular interest in India since 1999, viewing its democracy and massive, and moderate, Muslim population as a stabilizing force for Asia and the Middle East. This positive sentiment only grew after the Sept. 11, 2001, terrorist attacks on the U.S., as former Indian Prime Minister Atal Bihari Vajpayee was among the first foreign leaders to call Mr. Bush and lend his country's support in the war against al Qaeda.
The Indian leadership said "you now understand what we've endured for a long time," recalls Robert Blackwill, who served as the Bush administration's ambassador to India at the time. Islamic militants operating out of Pakistan and the disputed region of Kashmir have launched a number of terrorist attacks inside India during the past 15 years.
U.S. officials seeking to build the partnership with India said they recognize that it will take time, and that squeamishness about Washington still runs deep in India after decades of determined separation. New Delhi tilted toward the Soviet Union during the Cold War.
The most recent case in point came when the two countries signed a defense pact late last month, after U.S. Defense Secretary Donald Rumsfeld gave an unusually warm welcome to his Indian counterpart, Pranab Mukherjee. No sooner had the ink dried than an outcry issued from various factions in India, particularly on the left.
"Guardedness becomes all the more essential," said an opinion piece in the Hindu, a large Indian daily, "when it pertains to...a super-power which regards all the world its fiefdom."
Many in India also are wary of any Bush administration designs to see the South Asian giant mainly as a friendly bulwark against China and as a huge new market for military hardware. India, with a defense budget this year of $17.5 billion, is the world's third-largest importer of defense items. Topping its shopping list are 116 fighter jets and 500 helicopters, which have companies like Lockheed Martin Corp., Boeing Co. and Bell Helicopter Textron Inc. knocking at the door.
Indian officials are quick to stress that their burgeoning relationship with the U.S. isn't directed against China. In April, New Delhi signed its own "strategic partnership" with Beijing, they said, and two-way trade between the long-standing rivals has boomed in recent years.
"I don't look upon our relations with the U.S. as meant to rival China," Mr. Singh said in a recent speech. "I look forward to enhanced cooperation with China."
Senior U.S. State Department officials also have said in recent interviews that Washington isn't seeking to develop a containment strategy toward China. But a number of American conservative strategists, both inside and outside the Bush administration, are calling for just that. On Wednesday, a forum on U.S.-India relations in Washington by the conservative U.S. India League described as almost inevitable a U.S.-China conflict.
India will provide "an economic alternative to when we need to face the Chinese challenge," said Alan Keyes, a former Republican presidential candidate and senior State Department official.
One significant barrier to the Bush administration's ambitious plans for India are legislative restrictions that block Washington from selling sensitive "dual-use" and civilian nuclear technologies to New Delhi. India has never signed the Nuclear Non-Proliferation Treaty, or NPT, and Washington sanctioned New Delhi after it conducted secret nuclear tests in 1998. Though most of the sanctions have been lifted, many counter-proliferation experts worry about leakages of sensitive technologies out of India, particularly to its neighbors such as Iran.
"What kind of signal are we sending by giving these technologies to India?" said Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a think tank in Washington. "You're encouraging countries to flout the NPT."
The administration may try to finesse a way around the many legal hurdles that stand in the way of selling nuclear technology to India, U.S. officials familiar with the matter said. Discussions are still underway as to how the Bush administration can offer assistance to India's nuclear-power industry without going too far, they said.
"The Indians have high expectations on nuclear, and I'm not sure we can fully satisfy them," said one U.S. official.
On the U.S. side, the Bush administration would like to see India open up more widely to U.S. investment, including in the retail and service sectors, and put in place more stringent export controls for sensitive technologies. U.S. officials complain that efforts to push ahead on some of these more brass-tack issues have bogged down in recent months, despite all the high-level talk.
Still, U.S. and Indian officials are expected to point to real progress on the economic front during Mr. Singh's visit. Two-way trade between the countries has boomed, with U.S. exports to India growing by more than 20% last year to $6.1 billion. And institutional investment by American funds in India jumped to nearly $10 billion for the fiscal year ending March 2005, from around $500 million for the previous fiscal year.
One hallmark of the India-U.S. meetings is expected to be the announcement by New Delhi of a comprehensive settlement of Dabhol, the failed Enron Corp. power project in India. Successive Indian governments and key U.S. investors in the $2.9 billion gas-fired plant, such as General Electric Co. and Bechtel Group Inc., have been in a negotiating standoff for nearly four years over unpaid debts after a local Indian government shut down the facility in 2001. U.S. officials said the dispute has been blocking other American companies from engaging in big-ticket infrastructure projects in India.
Both Bechtel and GE have agreed to payouts by the Indian government in recent weeks, U.S. officials said. And Mr. Singh is expected to announce the settlement next week.
"This is a major step forward in so far as improving the investment climate in India," said Ron Somers, president of the U.S India Business Council in Washington. "Resolution of Dabhol clears a major hurdle that had been a nagging legacy adversely affecting investment decisions in boardrooms all across America."
Document AWSJ000020050714e17f00010
© 2005 Dow Jones Reuters Business Interactive LLC (trading as Factiva). All rights reserved.
posted by Eastlaw at 3:17 AM
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