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What to Expect from Indian Prime Minister Manmohan Singh’s U.S. Visit

What to Expect from Indian Prime Minister Manmohan Singh’s U.S. Visit

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Prime Minister Singh and President Obama will meet for the third official U.S.-India state visit to exchange ideas on deepening the U.S.-India partnership, as well as fulfilling unmet expectations.
Prime Minister Singh and President Obama will meet for the third official U.S.-India state visit to exchange ideas on deepening the U.S.-India partnership, as well as fulfilling unmet expectations.

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Published by: Center for American Progress on Sep 25, 2013
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1Center or American Progress | What to Expect rom Indian Prime Minister Manmohan Singh’s U.S. Visit
What to Expect from Indian Prime MinisterManmohan Singh’s U.S. Visit
By Caroline Wadhams and Aarthi Gunasekaran September 25, 2013
Despie ongoing urmoil in he Middle Eas, he Obama adminisraion coninues isseady pursui o a oreign policy makeover, reoriening is atenion and resources o he Asia-Pacic—specically India. Following a number o high-level visis by Americanocials o India, including Vice Presiden Joe Biden’s rip in July and Secreary o Sae John Kerry’s rip in June, Indian Prime Miniser Manmohan Singh will mee wihPresiden Barack Obama omorrow during his second ocial rip o Washingon asprime miniser.
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 During he meeing, Presiden Obama and Prime Miniser Singh will likely ocus on heollowing six issues in he U.S.-India relaionship:rade and invesmenDeense cooperaionTe U.S.-India civil nuclear dealClimae change and clean energy Immigraion reormSecuriy issues and he sraegic parnership
 
2Center or American Progress | What to Expect rom Indian Prime Minister Manmohan Singh’s U.S. Visit
For he Obama adminisraion, underlying hese discussions will be he unme expeca-ions o he U.S.-India relaionship, a relaionship envisioned as he cornersone o heU.S. rebalance o he Asia-Pacic. While here were high hopes ollowing he U.S.-Indiacivil nuclear deal in 2008 and Prime Miniser Singh’s 2009 visi o Washingon, many U.S. policymakers have been disappoined by he Indian governmen’s ailure o deepenhe parnership by implemening he civil nuclear deal, making India more open oinvesmen opporuniies or U.S. businesses, and increasing deense cooperaion. As Vice Presiden Biden saed in a July speech in India describing he hopes or he U.S.-India relaionship, “Tere remains a gap beween wha we are doing and wha we arecapable o wihou in any way impacing on eiher o our counries’ sovereign decisions... a gap beween his vision and he presen realiy.
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 Te Obama adminisraion seeks a robus rade and invesmen parnership; a deepenedsecuriy and sraegic parnership in he Asia-Pacic; he implemenaion o he civilnuclear deal; and more cooperaion on reducing climae change hrough a reducion inhydrouorocarbons, or HFCs, and greaer cooperaion on clean energy producion. TeIndian governmen will likely raise Indias key concerns regarding he cumbersome U.S.expor conrol sysem, proposed H-1B visa legislaion in he immigraion reorm bill,and he U.S. miliary drawdown in Aghanisan. Boh governmens have been engagedin a prolieraion o dialogues and working groups in a range o areas, such as educaion,environmen, energy, and homeland deense, o ackle hese issues.In he lead up o India’s elecions se or May 2014, he Indian governmen is ocusedlargely on domesic prioriies including debaes around ood subsidies and is owneconomic slowdown. Tis leaves litle space or pushing orward poliically coneniouseconomic reorms, such as decreasing domesic conen requiremens and srenghen-ing inellecual propery laws o proec oreign companies. Tereore, in he near erm,he U.S.-India relaionship may coninue o underwhelm is observers, wihou signi-can advances. Regardless, Prime Miniser Singh and Presiden Obama mus char along-erm course in which boh counries make changes and reorms in order o ensureha his relaionship says on he righ rack.
 Trade and investment
Over he pas wo decades, he Indian economy seemed unsoppable. U.S. and globalcompanies looked o he counry’s as-growing populaion or new consumers, is bulg-ing youh workorce or new labor, and is skyrockeing economic growh or invesmenand rade opporuniies.
 
3Center or American Progress | What to Expect rom Indian Prime Minister Manmohan Singh’s U.S. Visit
Te recen economic downurn in India, however, has revealed no only Indias vulner-abiliies o exernal global dynamics, bu also he serious weaknesses wihin he Indianeconomy ha have given pause o oreign businesses and caused companies o cu heirinvesmens in India, such as in he seel indusry.
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Fundamenal inernal problemsinclude India’s large curren accoun deci, narrow ax base (only 3 percen o Indianspay income ax), run-down inrasrucure, oudaed labor laws and weak rule o law, cor-rupion, and burdensome bureaucracy.
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Te rupee, now markedly he wors-perormingcurrency in Asia ,coninues o umble, having allen 16 percen agains he U.S. dollarsince May.
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While a weak currency has he poenial o make India a lucraive expormarke, acors such as high prices on oil impors, poorly buil and crowded pors, andirregular axes in expor zones impede upward growh aer an economic slump suchas he one India is acing.
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Moreover, annual Indian GDP growh—which averaged 7.7percen rom 2002 o 2011—has slowed o 4.4 percen, and inaion has hi 6 percen.
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  While bilaeral rade and invesmen beween he Unied Saes and India has qua-drupled since 2006—now a approximaely $100 billion, wih U.S. invesmen in Indiaa $28 billion—he Obama adminisraion and U.S. businesses argue ha he radeparnership has no reached is poenial and ha India’s rade policies are, in ac, some-imes discriminaory o U.S. companies.
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Channeling he complains o some American businesses, he Obama adminisraion has urged he Indian governmen o break down business barriers by changing is inellecual propery laws, especially as hey relae opharmaceuicals. Te adminisraion has also urged he Indian governmen o addressinconsisen ax reamen; requiremens ha companies buy local conen, such asin he elecommunicaions indusry and renewable energy secor; and limiaions onoreign direc invesmens.
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 Te Indian governmen has already underaken a number o policy changes o beginaddressing he economic slowdown and is rade and invesmen parnerships, includingeasing invesmen rules or he reail secor and a number o oher indusries—a direcatemp o woo oreign direc invesmen ow ino he counrys plummeing econ-omy.
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While India has lessened many o hese invesmen resricions, however, myriadsae rules and regulaions have emerged, creaing addiional invesmen barriers.India has also aken oher seps, such as:Increasing impor axes on gold and silver, which analyss credi as a key conribuoro he sae o he curren accoun deci
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Haling he implemenaion o is preerenial marke access policy unil urherreview, which included local conen requiremens in echnology 
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Requiring cenral bank approval or overseas invesmens ha are more han 100 per-cen o a company’s value, as a measure o keep dollar ouows in check 
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