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Inevitable Partners: Why the US and India Are Still Destined to Cooperate

September 30, 2014 in Economics

By Doug Bandow

Doug Bandow

Before becoming prime minister, India’s Narendra Modi was barred from receiving a visa to visit the U.S. A rising leader in the Hindu nationalist Bharatiya Janata Party (BJP), he was tied to deadly sectarian violence. But now he leads one of Asia’s most important powers and the Obama administration is rolling out the red carpet.

India long was ruled by the dynastic Indian National Congress Party, which enshrined dirigiste economics as the state’s secular religion. As a result, a land which spawned a global network of entrepreneurs and traders remained desperately poor.

Eventually, however, reality seeped into New Delhi. The Congress Party liberalized the economy. The BJP broke the Congress monopoly on power.

Prime Minister Modi’s visit to America offers an opportunity for a reset in bilateral relations.”

New Delhi appeared ready to follow the People’s Republic of China to international superstar status. But then enthusiasm for economic reform ebbed, economic growth slowed, and conflict with Pakistan flared.

However, on May 26 Narendra Modi became prime minister. He is visiting the U.S. to speak before the United Nations and meet with President Barack Obama. The trip could yield rich benefits for both countries.

Of course, there was that embarrassing visa ban, the only one ever issued for that reason by Washington. The matter was quietly forgotten, though the underlying issue never was resolved.

While serving as the chief minister of the state of Gujarat in 2002, Modi was implicated in Hindu riots which killed over 1,200 people, mostly Muslims. It was generally agreed that some in his government were complicit in the violence. However, Modi escaped responsibility—some proclaimed him innocent, others contended that evidence had been destroyed.

Modi so far has focused on India’s future. He was elected to reform the sputtering economy, which would not be helped by fueling religious hatred. To date his administration appears to be pragmatic and practical.

The prime minister’s visit to America offers an opportunity for a reset in bilateral relations. The Bush administration made a major push to improve ties by accepting New Delhi’s development of nuclear weapons, but little progress has occurred during the current administration. Indeed, controversies over trade policy and criminal charges against an Indian diplomat put the two governments at sharp odds.

The result is a lost opportunity for both nations. India, which, based on purchasing power parity, trails only America and China economically, so far performs far below its potential.

Modi naturally hopes …read more

Source: OP-EDS

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