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Narendra Modi

As Xi visits US, India commits to US$2.5 billion military helicopter deal and deeper ties with Washington

PUBLISHED : Wednesday, 23 September, 2015, 1:38pm
UPDATED : Wednesday, 23 September, 2015, 4:21pm

The world’s largest democracies, India and the United States, have agreed to deepen their security and economic cooperation, part of an ambitious drive to boost trade between them five-fold.

Senior officials expressed optimism after two days of talks dubbed the “US-Indian Strategic and Commercial Dialog,” launched in January by President Barack Obama and Prime Minister Narendra Modi.

It came on the day China’s President Xi Jinping arrived in the United States for a visit of his own, and two days before Modi was due, but US officials insist there is no intent to build up India to counter China.

Instead, they celebrated what Obama has dubbed the “defining relationship of the 21st Century” with agreements to fight terrorism and climate change and to bolster cooperation in energy, hi-tech and defence.

READ MORE: Obama and Modi share a man-hug to show China and the world their bond is strong

US Secretary of State John Kerry said: “The US-India relationship is a bright spot on the international landscape. President Obama is strongly committed to this relationship and friendship.

“We have charted new ideas to further strengthen our cooperation in different domains.”

Indian officials had said that their priority for the talks was reinforcing commercial ties and securing access to US inward investment and technology, but also hailed a joint determination to fight terrorism.

“A main take away from our discussions includes our shared view that we need to keep the big picture, the strategic framework of the relationship in mind,” Indian Foreign Minister Sushma Swaraj said.

“To sum up, we have had a most productive exchange of views today.”

India, which during the cold war relied mainly on Soviet weaponry, on Tuesday cleared a US$2.5 billion dollar deal to buy 22 Apache helicopter gunships and 15 heavy-lift Chinooks from US planemaker Boeing.

The strategic dialog sets up a meeting in New York next week on the sidelines of the United Nations General Assembly between US President Barack Obama and Modi, whose four-day visit begins September 24.

“And then we have a very robust discussion regarding counterterrorism, the Indian Ocean, maritime security, the South China Sea, the South Asian challenges of the moment,” Kerry said, in a nod to the challenge from China.

“The key pillars of our strategic partnership are shared values of democracy, freedom of speech and rule of law,” Swaraj said.

“It is not what US can do for India but what US can achieve together with India,” said India’s minister of state for commerce and industry, Nirmala Sitharaman, herself recalling remarks by US Vice President Joe Biden.

Kerry, Swaraj and Sitharaman were joined by US Commerce Secretary Penny Pritzker and Energy Secretary Ernest Moniz for the talks.

Aside from China, which is expanding its deep-water naval presence in the broader Asian region and staking a claim to disputed areas of the South China Sea, the other looming issue is that of climate change.

As India’s economic rise drags more of its huge population of 1.3 billion people into the middle class and the industrialized world, its historically low emissions levels are set to rise -- just as the world is seeking cuts.

Indian officials made it clear before the talks that they will resist any pressure ahead of the Paris climate summit to act quickly, but came to Washington keen to work with US firms on renewable energy technology.

The two countries have set themselves the goal of increasing their trade in goods and services from around US$120 billion per year now to around US$500 billion, an ambitious sum similar to existing US and Chinese trade.

India has not followed the typical development path of its Asian competitors, which typically focused on labor intensive but low cost manufacturing, and has instead leap-frogged towards a service economy.

This leaves Delhi and Washington in competition in some areas, as was shown in the “off shoring” of US call centre jobs, but also in a situation whereby their firms can work together in high-tech innovation.

Modi will celebrate and seek to build on this part of the relationship next week when he visits Silicon Valley and the San Francisco area of California to meet executives from Facebook, Google, Tesla, Cisco and Qualcomm.

He will also host a huge stadium event in San Jose for up to 20,000 of the three million American residents of Indian origin, seen as a dynamic community with a huge role in the tech sector and healthcare.