The commerce and trade aspects of President Barack Obama’s trip may have been overshadowed by the U.S. leader’s endorsement of India’s entry into the United Nations Security Council as a permanent member, but the multibillion dollar deals he announced during the visit is being seen by many in the United States as a step in the right direction.
That includes some in Congress, where Obama’s overall agenda is certain to run into road blocks, with the Democratic Party losing control of the House of Representatives by a big margin the same week he left for India.
The 20-some agreements that Obama announced in Mumbai while addressing a U.S-India Business Council summit are worth more than $9.5 billion and they are expected to generate 53,600 jobs in the United States. After his party was roundly thrashed in the midterm polls just before he embarked on the trip, the White House had played up the business and jobs aspects of the visit.
Two of the biggest transactions involve Boeing, the Chicago-based aircraft manufacturer: one a preliminary agreement to sell 10 C-17 Globemaster III military transport aircraft to the Indian Air Force, and the other a “definitive agreement with the budget carrier SpiceJets for selling 30 B737-800 commercial planes.
Just these two deals are worth $6.8 billion, or nearly 70 percent of the total trade transactions. They are expected to provide 35,130 jobs—roughly two-thirds of the overall projected jobs as part of the deals.
Besides the commercial and military aircraft sale, other agreements include the sale of gas and steam turbine and mining equipment and the setting up of a motorcycle assembly plant.
The engines used in C-17 Globemaster II planes are manufactured by Pratt and Whitney at its East Hartford and Middletown manufacturing units in Connecticut. “The purchase of 10 C-17 aircraft represents a great investment in Connecticut’s defense industry,” the senator said.
The fact that the White House touted details of each agreement with the number of jobs it is likely to generate—including one that will create a meager five jobs—showed the importance it attached to job creation in the wake of its stinging election rebuke.
But not everyone is buying the hype. A skeptical Financial Times wrote on Wednesday that this past month the U.S. economy had created three times the number of jobs Obama announced in Mumbai.
It is also worth pointing out that the current agreements are not unprecedented in scope or scale in Indo-US bilateral trade. Just one January 2006 agreement alone, between Air India and Boeing to purchase 68 aircraft over a 10-year period, was worth more than $11 billion. That was India’s single-largest commercial plane order.
Among those that think the deals are merely part of “an ongoing process” is Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, a Washington think-tank that studies international economic policy. “It is a modest positive step,” he told VCCircle.
One reason it didn’t grab enough headlines in the United States was perhaps due to what transpired in Obama’s next stop, Delhi. There the president announced his county’s support for the induction of India as a permanent member of the United Nations Security Council. “All the headlines have been grabbed by the Security Council announcement,” Subramanian said.
The economist welcomed the lifting of U.S. restrictions on the export of “duel use” technology to India, which was also announced during the visit. “Export control move is useful,” he said.
Indian defense and space research entities and organisations that are going to benefit due to the new initative includes Bharat Dynamics Ltd and four subordinates of the Defense Research and Development Organization and the Indian Space Research Organization.
Rep. Royce, who has championed India-U.S. military-to-military cooperation, also hailed the lifting of the curbs. “If the U.S.-India relationship is to become a defining partnership of the 21st century, active defense cooperation between our two countries is a must,” he said.
In special arrangement with Global India Newswire.