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Indian Summer

Avi Friedman

President Obama will bring back $10 billion in new trade deals with India, but will bolstered relations with the world's second-most populous country have a long-term impact on the sagging US economy? And is there is a hidden benefit for Israel in expanded US-India relations?

Wednesday, November 10, 2010

On the face of it, President Obama's four-day visit to India -- the first stop on a four-nation tour of the Far East that also includes stops in Indonesia, South Korea, and Japan -- should have focused on politics. India is a country that has suffered its share of terror attacks, including the 2008 Mumbai strike that left 166 people dead, including Rabbi Gavriel Holtzberg and his wife, Rivkah.

India is the world's most populous democracy. The country maintains important strategic relations with Iran, Russia, and China, all of which occupy critical places in Washington's foreign policy concerns.

But Obama's stinging rebuke in midterm elections, and the looming difficulty the president is likely to face when trying to implement policy initiatives with a newly empowered Republican House of Representatives and a razor-thin Senate majority, has clearly relegated politics to the cargo hold of Air Force One. Instead, Obama's thrust in India was clear from the time he landed in Mumbai on November 6: economic ties.

“Both sides will be looking for economic deals out of this trip,” said Professor P. R. Kumaraswamy, a professor of Middle East studies at Jawaharlal Nehru University in New Delhi. “Obama needs India to stimulate the American economy and to create jobs back home. That probably means we are looking at some large military deals.”

Kumaraswamy's prediction was upheld by the announcement of $10 billion dollars in deals on the first day of the trip, including the purchase of thirty-three Boeing 737 airplanes by India's SpiceJet Airlines; another agreement between Boeing and the Indian military for ten C-17 transport aircraft; several major deals involving gas and steam turbines; and a plan for the Indian military to buy aircraft engines from General Electric. The White House says Obama's visit to India will create 54,000 new American jobs.

India will also be looking to strengthen its own economy during the visit. Indian companies want greater access to the US market for exports like textiles, agriculture, and precious gems. Indian officials were pleased that the president's visit was arranged during his first term, as opposed to Presidents Clinton and Bush , who only made it to India towards the end of their second terms in office. 

“The timing of Obama's visit makes it clear that he wants to solidify ties with India, and that's a very welcome sign,” said Professor Kumaraswamy.

 

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