President Obama has left the Indian shores, but the country is yet to recover from what our hypermedia calls Obamamania. When he said that it was deliberate on his part to make his India-trip his longest foreign-trip so far as the President, it was clear that the US valued India greatly and the relationship between them had been transformed from the traditional giver-taker syndrome to something that was mutually beneficial. In fact, Obama wrapped up his three-day visit to India with agreements worth $10 billion in US exports, expected to generate over fifty-three thousand US jobs. In return, he also pleased New Delhi by backing India’s long-standing ambition for a permanent seat in the UN Security Council. In a speech to the joint session of the Indian Parliament, he stressed: “India is not simply emerging; India has emerged.” He also tried to allay the concerns of Indian businesses on outsourcing. “There still exists a caricature of India as a land of call centers and back-offices that cost American jobs,” he said, “but these old stereotypes, these old concerns, ignore today’s realities.”
At a closer scrutiny, however, things are not that simple. One is not doubting the sincerity of Obama to take the relationship between the two countries to a qualitatively higher-level. But the fact remains that as a leader of a democratic country, there are multilayered mechanisms that he has to go through in the Unites States. And the same way, Prime Minister Manmohan Singh has to take along with him various democratic institutions inside India while carrying out his commitments to Obama. In other words, unlike Hu Jintao of China or any leader of a non-democratic country, both Obama and Singh have to operate within democratic parameters, which are prone to various checks and balances and susceptible to public opinions and pressures.
Those being the case, despite Obama’s effort to increase US exports to India, several obstacles to trade and investment still remain. Of course, Obama has gladdened many hearts in India by eliminating one of those obstacles. He announced relaxed export controls to India for sensitive technology and removed India’s defence and space-related organisations from the US Entity List. These are: Bharat Dynamics, four subordinate organisations of the Defence Research and Development Organisation (Armament Research and Development Establishment, Defence Research and Development Lab, Missile Research and Development Complex and Solid State Physics Laboratory), and four subordinate organisations of the Indian Space Research Organisation (Liquid Propulsion Systems Centre, Solid Propellant Space Booster Plant, Sriharikota Space Centre and Vikram Sarabhai Space Centre).
And yet, the fact remains that several subordinate organisations of the Department of Atomic Energy continue to remain on the Entity List. These are: Bhabha Atomic Research Centre, Indira Gandhi Atomic Research Centre, Indian Rare Earths, nuclear reactors (including power plants) not under International Atomic Energy Agency safeguards, fuel reprocessing and enrichment facilities, heavy water production facilities and their ammonia plants.
As Rajiv Nayan of the Indian Institute of Defence Studies and Analyses rightly asks: will the removal of these organisations from the Entity List end the dual-use curbs on India? There is no guarantee that all the curbs would go. The removal of organisations from the Entity List has just removed a layer of controls. Despite the removal of most of the organisations from the Entity List, India may have to struggle to find some items because of the operation of missile and nuclear weapons related curbs in US policy. The US Administration will have to change the core of its policy for India.
Nayan is right in pointing out that “apart from regulation and law, orientation, approach and attitude towards a country and its concerned organizations matter a lot. When licensing authorities examine a license application, they have to exercise discretion in deciding a case. Several factors or criteria may cloud their judgment. The US President and his administration may face a challenge in inculcating a different kind of culture in its control bureaucracy….
“In fact, the Bureau of Industry and Security (BIS) explicitly mentions: ‘The removal of an entity from the Entity List removes only the additional license requirements imposed by the entity’s listing on the Entity List, and does not modify the license requirements that may be applicable under the EAR [Export Administration Regulation] as a result of an item’s classification on the CCL [Commerce Control List] and the proposed country of destination for the export, reexport or transfer (in-country) of the item. Additionally, if you know or have been informed that the item proposed for export, reexport or transfer (in-country) will be used in a weapon of mass destruction or missile delivery system program, you must seek a license pursuant to the requirements found in part 744 of the EAR’.”
In fact, as long as there are no compatibilities between Indian and American rules and regulations on some key areas, the high potential Indo-US economic and commercial relations will not be realised fully. For instance, the Americans are not happy with Indian laws, particularly those that demand the American companies to sign technology-transfer and manufacturing license agreements while concluding substantial arms deals. Americans find India’s taxation regime to be complex as a large number of taxes are applicable at different stages of the manufacturing process. Our tax regime is perceived as aggressive and bureaucratic in its application for the Americans to invest. Similarly, Americans do have a point when despite covering extra miles for the historic Indo-US civilian nuclear deal, the Indian government really disappointed them by legislating a nuclear-liability provision that defied international standards and practices on damages and compensations flowing from nuclear commerce. Mercifully, the situation seems to have been retrieved now that India has signed the multilateral “Convention on Supplementary Compensation for Nuclear Damage” (CSCND) on the eve of Obama’s visit. India has thus assured the potential American nuclear suppliers that liability, if any, would be in line with international norms.
However, all told, there is a qualitative difference between Indian and American systems. While India has always kept all its international commitments, the same cannot be said of the Americans, who, if the situation so arises, allow their international commitments being superceded by their new domestic laws. That explains why the US finds it easy to impose so many sanctions and go back on its promises in its relationship with a country that undertakes any action or policy that the US does not approve of. This practice has been legitimised by the famous 1888 “Whitney v. Robertson ruling”, by which the US Supreme Court determined:
By the Constitution, a treaty is placed on the same footing, and made of like obligation, with an act of legislation. Both are declared by that instrument to be the supreme law of the land, and no superior efficacy is given to either over the other. . . . [I]f the two are inconsistent, the one last in date will control the other. . . .
All this is not to give a pessimistic picture. Obama is right that the Indo-US relations will be a defining feature of the 21st century. The shared interests of India and US encompass humanitarian assistance, counter-terrorism cooperation, fighting violent religious extremism, maritime security activities, weapons proliferation monitoring, regional stability maintenance and related aspects. Then, there is the most important factor of the presence of now nearly three million Indian-Americans, who are emerging as powerful as the Jewish community in the Unites States and they will not allow any American Administration to anatgonise India beyond a point. However, and that is my point, “democratic hurdles” in both India and the Unites States will always work as speed-breakers in the momentum of the relationship. And, it is not necessarily a bad thing. After all, we are democracies.
By Prakash Nanda