Barack Obama had barely walked out of Parliament's Central Hall when the debate began on whether his India visit was "transactional" or "strategic". It was neither. Obama, accompanied by an unusually large contingent of CEOs, many of them small and medium businessmen, was in search of jobs.
Yes, the $10 billion of purchasing deals announced during the US President's visit will theoretically create 54,000 jobs , which is less than one-third of the total private sector jobs added in the United States in October, and unemployment is stuck at 9.6 per cent. You could see the dollar signs shining in the eyes of the US delegation. The $10 billion was only the icing. The cake was the mammoth Indian market.
"In 20 years, 68 cities in India are expected to surpass one million inhabitants, and the aggregate annual income of households in urban areas is expected to grow from about $700 billion today to almost $4 trillion by 2030," US Commerce Secretary Gary Locke told a business summit in Mumbai on November 6.
Besides C-17 transport aircraft and giant gas turbines, there are other large deals hanging fire, chiefly transport and attack helicopters, the latest-generation fighter jets where the Eurofighter consortium is apparently favoured to beat out US, French and Russian competition, and most importantly, equipment for India's nuclear energy programme which is stymied by nuclear-liability legislation that US companies believe is untenable.
Outside those big-ticket deals, the US will also be looking to work alongside India on its "Evergreen Revolution". US corporations hope to make inroads on geneticallymodified crops, wind energy, water-management equipment, and other "green" technology. Then there is retail, transportation, and automobiles.
Despite much talk of "a relationship of equals", however, the numbers tell a very unequal tale. Two-way trade is not growing as fast as it should, although Locke said US exports to India so far this year have jumped 18 per cent. Locke also noted that Indian FDI in the United States totalled $4.4 billion in 2009.
What the joint statement by Obama and Prime Minister Manmohan Singh glossed over was that two-way trade slipped in 2009-10 to $36.9 billion from $39.7 billion a year earlier, and that India's trade with the United States comprised only 7.8 per cent of its total overseas trade.
In reverse, too, India ranks only 19th among America's trade partners, and China is No.1. Total US trade with China in January-August this year totalled $285 billion, and with India $32 billion. In the same period, Washington ran a trade deficit of $7 billion with India, compared with a deficit of $173.4 billion with China.