NEW DELHI: US President Barack Obama ended a landmark day in India on Monday with a pledge of $4 billion in investments and loans, seeking to release what he called the “untapped potential” of a business and strategic partnership between the world’s largest democracies.
Earlier in the day, at the invitation of Prime Minister Narendra Modi, Obama was the first US president to attend India’s annual Republic Day parade, a show of military might that has been associated with Cold War anti-Americanism.
It rained as troops, tanks and cultural floats rolled through the heart of New Delhi, but excitement nevertheless ran high over Obama’s visit, which began on Sunday with a clutch of deals to unlock billions of dollars in nuclear trade and deepen defence ties.
The leaders talked on first name terms, recorded a radio programme together and spent hours speaking at different events, but despite the bonhomie, Obama and Modi reminded business leaders that trade ties were still fragile.
India only accounts for 2 percent of US imports and one percent of its exports, Obama said. While annual bilateral trade had reached $100 billion, that is less than a fifth of U.S. trade with India’s neighbour, China.
“We are moving in the right direction…That said, we also know that the U.S.-India relationship is defined by so much untapped potential,” Obama told the Indian and US business leaders.
“Every one here will agree, we’ve got to do better.”
Modi said US investment in India had doubled in the past four months and vowed to do more to slash the country’s notorious red tape and make it one of the world’s easiest places for business.
Obama said that US Export-Import Bank would finance $1 billion in exports of ‘Made-in-America’ products. The US Overseas Private Investment Corporation will lend $1 billion to small- and medium-sized enterprises in rural areas of India.
For renewable energy, a key focus of Modi, $2 billion will be committed by the US Trade and Development Agency for renewable energy, Obama said.
The United States views India as a vast market and potential counterweight in Asia to a more assertive China, but has frequently been frustrated with the slow pace of New Delhi’s economic reforms and unwillingness to side with Washington in international affairs.
That may be changing under Modi, who has injected a new vitality into the economy and foreign relations since his May elections, and to Washington’s delight, has begun pushing back against China across Asia.
India could even play a role in battling Islamic State, the White House said on Monday, underlining confidence that India is increasingly prepared to engage on global security issues.