On Friday, September 26, the Carnegie Endowment for International Peace hosted a media call in advance of Indian Prime Minister Narendra Modi's visit to Washington. George Perkovich and Milan Vaishnav discussed what to expect from Prime Minister Modi's visit and assessed the state of the U.S.-India relationship.
Tom Carver: OK, good morning everyone. It’s Tom Carver here from Carnegie Endowment, and this is the media call on Narendra Modi’s visit to the United States. It is on the record, and a transcript will be available within, I hope, 24 hours or so afterwards by emailing Clara Hogan, our media person. And I’m very pleased to have with us on the call George Perkovich who’s a vice president here at Carnegie and oversees the South Asia Program, and Milan Vaishnav, who’s an associate in the program. So maybe I’ll just ask a couple of questions and then we’ll open it up. Guys, what do you think that Modi wants to get out of this trip?
Milan Vaishnav: Thanks, Tom and thanks everyone for being on the call. I think it’s pretty clear judging by Modi’s itinerary both in New York and Washington is that the prime minister’s number one objective in visiting the United States is to attract U.S. investment into India and to declare once again to an American audience that India is open for business. And I think that this message is crucial for the prime minster because his electoral mandate at the end of the day is fundamentally about getting India’s economy back on track. Given India’s massive domestic needs particularly in the realm of infrastructure, India requires significant foreign direct investment flows to meet its developmental requirements at home, and clearly the United States is a big piece of that.
Tom Carver: George?
George Perkovich: No, I think that’s right. And I just would add a focus on private investment, engagement with business and then otherwise, just the symbolism of being greeted, you know, with all the trappings of greatness and respect and all that, so kind of the pageantry of it to play back at home. Including, kind of the rock star part of, you know, big event at Madison Square Garden with 20,000 people, and sort of have that kind of—the luster of stardom.
Tom Carver: And has he put behind him the whole visa business? Being refused a visa in the U.S.? I mean, how does he feel personally, do you feel, about that?
Milan Vaishnav: Well I feel that this in many ways is a victory lap for Modi, I mean the ________ is quite remarkable. Just a few months ago this was a man who couldn’t under U.S. law enter American soil, and he’s gone in just a matter of a few months from persona non grata to person of honor to be received warmly in the Oval Office. So I think this is clearly an important occasion for him, in that the United States is, you know, rolling out the red carpet to greet Modi. I think there’s obviously some lingering feeling of—of hurt because for the greater part of the decade, the United States didn’t have any official engagement with Modi. But I think that at least rhetorically he has been very forward-looking and talked about the need for the U.S. and India to reenergize the bilateral partnership, and I expect that in his discussions with the President and senior members of the administration, he is going to focus on how the U.S. and India can work together in the future.
Tom Carver: And what’s the priority from the U.S. administration point of view? What do they—do they have clear goals you think with what they want to get out of it beyond welcoming him here and giving him _______?
George Perkovich: I think there are clear goals that are not going to be satisfied, but I think much of what the U.S. wanted from India in concrete terms from the last ten years hasn’t been satisfied. So you know, if we want Indian cooperation in World Trade Organization negotiations, the Doha round, the pharmaceutical industry which is a very powerful industry in the U.S. wants greater respect in India for intellectual property. The administration has a big climate change initiative, so they want some Indian cooperation on climate change. The defense contracting in the United States would, you know, like to have more business in India. And on that one, you know, the Indians would also like access to American technology, so there’s a potential convergence of interests there. But, so there are these various, concrete, financially valuable moves that the U.S. would like India to make, and but my guess is that India is not going to make any of those until once again the U.S. will be left and U.S. business will be left saying there’s all of this promise and all of this seduction, but we’re still not getting somewhere.
Milan Vaishnav: I think from the perspective of U.S. business, which is clearly the focus of this visit, that the U.S. business community essentially expects three things from Narendra Modi. The first is that this new government is going to be able to provide a strong, sound macroeconomic framework, which means getting growth back on track, reducing inflation, and bringing down the deficits—that’s number one. Number two is on improving India’s investment climate, you know, whose reputation I think was badly tarnished by some of the protectionist measures of the final years of the previous government, and self-inflicted wounds in terms of policy missteps on tax, on foreign investment in particular. And I think the third thing is the U.S. is looking for signs that Modi is serious about making fundamental changes, not just kind of superficial changes to India’s legal and regulatory framework that make it much easier to do business. And so I think those are three areas where the business community is cautiously optimistic, although I think they’re waiting to hear more details on how the government plans to proceed on each of these three fronts.
Tom Carver: OK. Great, ok well let’s then open it up to questions. If you have a question please state your name and where you’re from, and also others, remember to keep muting your line when you’re not asking a question. Ok, anyone?
Matthew Pennington: Could I ask a question? This is Matthew Pennington from the Associated Press.
Tom Carver: Sure, jump in Matthew.
Matthew Pennington: Today there’s a human rights group, the American Justice Center, that has filed a legal case against Prime Minister Modi on the eve of his arrival over the —his alleged complicity in the Gujarat violence in 2002, and the court issued a summons. I’m wondering if you have any thoughts about whether this would have any impact on his visit, I’m presuming he still comes over, it wouldn’t, sort of, he wouldn’t have to appear anywhere… But do you think this would, sort of, take some of the gloss off of his visit to New York and Washington?
Milan Vaishnav: I think there is no question that it is precisely the wrong foot on which to begin in terms of his visit to the United States. Having said that, I think there will be a short kind of media flurry of interest but that will quickly subside. I mean, summons have also been issued in the past to both Prime Minister Manmohan Singh and Congress Party President Sonia Gandhi and have not really gone anywhere. And this is, as I understand it, there’s no—no judge has ruled that there is prima facie evidence of any complicity, that this is a sort of pro forma summons, a civil case and not a criminal one in which he has 21 days to respond. So I think we’ll get a 24-hour news cycle of stories on this, but I don’t expect it in any material way to affect any of his engagements in the United States, either in New York with private citizens, private industry, or in Washington with the administration.
George Perkovich: This is George. I think there are two paradoxes here, one is that one of the big selling points of Modi is this is a totally hands-on manager who knows what’s going on, imposes discipline and everything else, but then in Gujarat somehow, he didn’t know what was going on, couldn’t have controlled it, and so that seems in contradiction to his image. But then on our end, in the U.S. end, this is a guy who was elected by a huge mandate in a totally unquestioned, legitimate democratic election, and so the Indian people have spoken in this way, and so it’s not like a dictator from a country whose alleged to have done—you know committed atrocities and he’s a dictator. I mean here is somebody who was elected through legitimate processes, and I think the U.S. government has to just clearly accept that and move on and treat him as the elected leader of the country, which he is.
Tom Carver: Do you know if they should expect more sort of protests over Gujarat at all—I mean…
Milan Vaishnav: Yeah, I mean there are protests planned certainly in Washington and New York outside of Madison Square Garden, and there are a number of human rights groups, groups against genocide, groups against religious intolerance, which plan to protest the visit. And I’m sure that we’ll see some clear movements in Washington. But I think in terms of official U.S. government policy, this debate is over, and the side of pragmatic engagement has clearly won out.
Victor Mallet: A question here from Delhi.
Tom Carver: Sure—can you state your name and –
Victor Mallet: Yeah, Victor Mallet from the Financial Times. Um, one thing that’s very hard to judge over here in all the enthusiastic media coverage is how important India and Modi are in the scheme of things to the U.S. and to the Obama administration. You know, where does India and Modi come on their list of priorities? Is it way, way down after the Middle East, Ukraine, China, etc., or not? I mean, I’m just trying to get a feel for, you know, the kind of relative importance of India in the midst of other issues.
George Perkovich: You know the old gag which I’ll probably screw up, the difference between the urgent and the important? The things that you mentioned earlier, you know ISIL, Ukraine, Middle East, you know, that’s urgent and we can debate how important… India’s clearly important, but it’s not urgent compared to the other things that the administrations having to deal with where you’re talking about the use of force, the deployment of American soldiers. So those are incomparable challenges and issues. But India clearly here is important. One last thing is that though-- that in India there’s a feeling that it isn’t as important. There, I think, there was an expectation created from the Bush administration which was totally unsustainable, and that is that the president of the United States in the Bush administration was kind of the India account manager. And whenever there was an issue or a problem, the Indians would just go straight to the White House and the president. Well that’s not the way that the U.S. does business with any country ____. And so now that the relationship has somewhat normalized and the honeymoons over, again because America business and others are deeply frustrated, whereas ten years ago they all thought they were going to go there and succeed—but it’s a normal, important relationship.
Milan Vaishnav: Yeah I think— everything George said is right.
Victor Mallet: Hi.
Milan Vaishnav: Hi, Victor. I think it’s a broader question that I think one could ask about the Obama administration’s commitment to the Asia-Pacific pivot, rebalance, and so on and so forth. Obviously, there’s been a lot of disquiet from partners in the region that the U.S. hasn’t really fully lived up to its rhetoric, and I think here there’s no question in my mind that this administration from the President to the Secretary of State on down is focused like a laser on this summit between India and the United States, but the question really is in the follow up. And I think the United States is in a bit of a tricky position, because if you think about what it is that Modi wants, he wants two things. He wants capital and he wants technology. Now, the United States, unlike the Japanese or the Chinese as a government is not well-placed to provide large amounts of capital—that’s simply not how our government is set up. So then all the emphasis is on technology, and there very quickly moves to defense. And I think there’s a lot of interest in the administration in moving forward on this, but it’s going to require India as well the reciprocate and show the same level of interest, and I think that’s where both sides have not been able to have a meeting of the minds.
Victor Mallet: Yeah. Thank you very much. That’s not my dog, by the way. That’s somebody else’s. (Laughter)
Tom Carver: It’s always good to have a dog on the call.
Milan Vaishnav: Anyone else?
Tom Carver: Just on that, George, and I’m probably going to screw this up--didn’t Obama when he went to India in 2010 call this the most important strategic relationship the U.S. has? Or one of the most or something… I mean hasn’t he also raised expectations?
George Perkovich: It is an important relationship for all sorts of reasons, but it’s um, you know there’s this debate for example over you know, is it a problem—it’s a mistake to think of a transactional relationship, so those in the Unites States who are sort of looking for transactional benefits _______ and it’s both. But the thing is, in a democracy especially, how can you sustain the argument that a relationship is really important and it’s beneficial if it’s not actually bringing concrete benefits to the people who influence your democracy? Right? So it’s not an abstraction, we’re not a dictatorship, we’ve got businesses that are powerful, they’re real. It’s about employment, it’s about income, you know, all that. Same with climate, trade and all that, so they’re looking and saying, ‘you keep saying it’s an important relationship, but is there any connectivity, is there any benefit that comes out of it?, and if the only answer is well geostrategic benefit, at some point you say, well what does that mean practically, and there it’s hard to answer.
Milan Vaishnav: I mean, I would just say that the outlook going forward depends in great measure on the pace and extent to which Modi can ____ in his economic fortunes. I mean, I think if you were to following the trajectory of U.S.-India relations over the past several years, it pretty closely tracks with India’s trajectory of GDP growth rate that when GDP sunk below five percent for two years in a row, you know the worst performances in a quarter century, all of the irritants in the relationship took center stage. And that’s not to say if growth gets back on track and gets back to seven, eight, nine percent that those irritants are going to disappear, but they certainly move to the periphery. And I think relations almost mechanically become stronger, so I think, you know, that’s really going to be one of the most important determinants in my mind.
Tom Carver: OK. Other questions?
George Condon: Yeah, this is George Condon with the National Journal. I just want to—a rather basic question. How do you describe the state of the relationship right now between the countries, and also, is there any personal relationship at all by phone or anything between the President and the Prime Minister?
Milan Vaishnav: Well I’ll take the second one first, I mean there was a call made by President Obama to the Prime Minister shortly after the results were declared on May 16 and showed clearly that the BJP was going to form the government under his leadership, and since that time there have been a number of high level visits including Secretary Kerry and Secretary Hagel to India, and similarly ministers from the Indian side over here. But this will be to my knowledge the first sustained interaction between the President and the Prime Minister. And I think that’s very much one of the most important objectives I think of this trip is that the United States in some ways operates from a huge disadvantage because we’ve had no relationship with the government for the greater part of the decade, and so this is very much, I think, a getting to know you visit. And we’ve seen in the past that while certainly connections between the leaders are not a sufficient condition for strong relations, it certainly seems to have been a necessary one.
George Perkovich: That’s right. I would just add—I wouldn’t expect much or I wouldn’t expect personal relationship here. I mean Modi is a person without many friends, and I’m not saying that as a criticism, but he works all the time and he’s known not to have friends with anyone. And Obama is known not to have close personal relations with other heads of state. Again it’s not a criticism; it’s just kind of their temperament. So these idea that these two people who are more loner types than some of their predecessors are somehow going to hit it off and do a—a bromance kind of relationship that will—and I know that wasn’t what you were saying, but it tends to be what ends up happening. People are always looking for kind of a story that’s about a relationship. That’s not going to happen here.
Tom Carver: OK. Others? We have about five or ten more minutes.
Tom Carver: What about um, you mentioned these issues, George, ISIL, and Afghanistan. Is the U.S. going to try and get India engaged in any way on these?
George Perkovich: Well, the one urgent issue where India has as much at stake as the U.S. is Afghanistan. And so that has been an Indian priority for a long time and one where in some ways there’s clear overlap in interests between the U.S. and India. There’s some coordination and cooperation, but there’s kind of underlying Indian mistrust I would say, if that’s not too strong a word, or doubt about U.S. strategy—there’s a sense that the U.S. has screwed things up by our friendship with Pakistan, and it’s Pakistan’s fault that Afghanistan is the mess that Afghanistan is, and so therefore because the U.S. has been indulgent of Pakistan the U.S. hasn’t really been trustworthy. And now the U.S. is leaving, and there’s an India worried that they’re going to be left with a mess and the consequences, and so will the U.S. do enough to help manage that? The criticism there, I think, is probably fair. The reality is in my view that no one knows what to do in Afghanistan. Indians don’t know what to do. Americans don’t know what to do. And so this is a shared anxiety, but it is something on which the two countries actually can cooperate and it is the one urgent thing amongst the important things in international affairs that they work on.
Tom Carver: OK. Anything else? Any other questions? Ok, any final thoughts guys?
Milan Vaishnav: No, I’ll just make one final comment. I mean, I have to note that I think that, you know, Modi’s engagement on Sunday in Madison Square Garden is quite remarkable when one things about it. I mean it’s hard to imagine another head of state coming to the United States and you know, selling out as it were Madison Square Garden, and had they been able to get Giants Stadium or Yankee Stadium, both which were attempted, we would have seen, you know, 65,000 plus probably. But I think this is important for a couple of reasons. One is that first obviously to furnish his own credibility and credentials, there is a huge pent up demand among the Indian-American community to hear from his and to be his audience, and I think the second is that, you know, given the sizable nature of the diaspora in the United States, and the fact that they are far wealthier than the median household, and increasingly politically engaged, this is an attempt from Modi to flex his muscle a little bit, too say look, these guys are not necessarily my voters but they sure are your voters in the United States, and you know, I have some independent sources of power beyond whatever business and official government to government ties India may have, and so I think you know, outside of the Pope, you know, perhaps Nelson Mandela, it’s hard to think of somebody else who could sort of pull this off. So I think you know…
Tom Carver: Are they overwhelmingly pro-Modi?
Milan Vaishnav: I mean we certainly don’t have good data on the political views of Indian-Americans with respect to their home country, but if I were to generalize from the sentiment from Indian-Americans in the United States I would say by and large they are in favor of Modi, but partially that’s due to the fact that the largest subgroup of Indian-American happen to be Gujarati-Americans. And they are ___ in both professional industries as well as in political activism, and so therefore there’s a bit of a selection bias in terms of who one hears from.
George Perkovich: And I would—what Milan said, all of it is very important. And that over the years, there’s been an explicit goal of the Indian-American community to become as powerful or more powerful than the Jewish-American lobby is for Israel. And so, in a sense, it’s beyond whether they’re pro-Modi. They’re pro-India, and in a sense they reflect the idea of Indian government priorities are being—you know the U.S. should respect that and ___ it, and so as a source of very legal ‘this is the way the game is played here’ as an expression of power and interest, uh, it is really important.
Victor Mallet: I’m sorry. Victor. Victor again. How many are there? Indian-Americans, not Gujaratis.
Milan Vaishnav: I think according to the latest census, there’s somewhere in the realm of close to 3 million now.
George Perkovich: Is the total? Total Indian-Americans?
Milan Vaishnav: Total. And then Gujaratis I don’t know the specific breakdown, but I think they’re the largest sub-demographic.
Tom Carver: Ok. Well I think we’ll wrap it up there. Thank you very much. As I say, it was on the record and there will be a transcript, and if anyone is in D.C. we’ve got Arun Jaitley coming on the 9th.
Milan Vaishnav: Finance Minister Jaitley. He’s here on October 9th and details will be issued.