US pledges $4 bn to India as investment, loans

NEW DELHI: US President Barack Obama ended a landmark day in India on Monday with a pledge of about 0.4 trillion rupees ($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. Helicopters showered petals on the crowds, and then tanks, missiles, stiffly saluting soldiers, brass bands and dancers filed past the guests.
Security was tight across the city, where tens of thousands of police and paramilitary personnel were deployed on street corners and rooftops.
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.
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 US trade with India’s neighbour, China. “We are moving in the right direction, we also know that the US-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.
Modi and Obama on Sunday committed to close consultation on global crises, including in Iraq and Syria. “The leaders agreed to exchange information on individuals returning from these conflict zones and to continue to cooperate in protecting and responding to the needs of civilians caught up in these conflicts,” they said in a joint statement.
They also agreed to a 10-year framework for defence ties and struck deals on cooperation that included joint production of drone aircraft and equipment for Lockheed Martin Corporation’s C-130 military transport plane.
India could even play a role in battling the Islamic State, the White House said on Monday, underlining confidence that India is increasingly prepared to engage on global security issues.
The head of US nuclear power plant maker Westinghouse told Reuters on Monday that a civil nuclear pact struck at summit talks between Indian Prime Minister Narendra Modi and US President Barack Obama could help clear a logjam of stalled projects.
Daniel Roderick, President and CEO of Toshiba-backed Westinghouse Electric Co, said a commitment by India to “channel” immediate costs arising from any nuclear accident to the plant operator marked an important step forward. But he said he was looking for more detail on a nuclear liability insurance pool that India has proposed that would involve a state insurer and be backed by the government. “The term breakthrough is appropriate,” Roderick said in an interview in New Delhi.