Before PM trip, India prop for US economy

[gubbi]

Before PM trip, India prop for US economy

Washington, Nov. 19: Prime Minister Manmohan Singh will gently rub in India’s relative economic health compared with America’s financial disarray to underline India’s importance to the US during his four-day stay here.

Such a strategy will provide some stability to his “state” visit, which has been rocked even before it has begun as a result of the confusion and contradictions within the Barack Obama administration over its world view and its overweening tendency during the last 10 months in office to be all things to all people.

Some 20 hours after the Prime Minister lands here shortly after noon on Sunday, seven of India’s corporate giants will ostentatiously sign collaboration agreements with their US counterparts that will be seen as contributing to the oxygen that many American conglomerates desperately need to survive in an economy that continues to be Obama’s weakest spot.

“Not one of these agreements will be for outsourcing to India,” one CEO, whose company is a party to one of the deals to be signed on Monday, proudly told The Telegraph yesterday.

“These are agreements which will create jobs for Americans and, of course, help upgrade Indian corporations. But they will showcase a different India in the US. It is a complete turnaround from the PL-480 days when we went to Washington, hat in hand,” said the CEO.

Because New Delhi and Washington do not want to take away the surprise elements in a summit, those associated with the agreements and Singh’s programme are reluctant to go on record at this stage and do not want full details of these deals to be divulged before Monday.

The strategy to put economy front and centre during the Prime Minister’s 93-hour stay in Washington has the imprimatur of Montek Singh Ahluwalia, deputy chairman of the Planning Commission and India’s “sherpa” at the summits of G-20, which India is putting at the heart of its global outreach.

At his news conference at the end of the G-20 summit in Pittsburgh in September, the Prime Minister had emphasised that “there is no economic crisis in India” while Ahluwalia, during his many visits to the US, had pointed to India’s growth rate, despite the global financial meltdown.

As part of this strategy, it was decided at a series of meetings this week in 7 Race Course Road, the Prime Minister’s residence in New Delhi, to eliminate all contentious issues in the Indo-US economic dialogue during Singh’s visit to Washington.

As a consequence, the Prime Minister’s Office turned down a request from US commerce secretary Gary Locke for a meeting with Singh during his stay in Washington. Locke would have brought up the prickly issue of world trade talks and the stalled Doha Round at such a meeting.

Miffed at the rejection of his request, at the time of writing this, Locke has decided to skip town on Monday and will return only after the Prime Minister has left Washington for Trinidad and Tobago on Thursday morning, a senior official of the Obama administation said.

Locke’s sulk, because several other Obama cabinet members will call on Singh, has upset the apple cart over some corprorate events associated with the Washington summit which he was to have attended.

In the run-up to Singh’s visit, US trade representative Ron Kirk had written to the Indians, strongly hinting that he and commerce minister Anand Sharma should meet here on the sidelines of the summit.

Sharma used that letter to make a case for his inclusion in the prime ministerial entourage to Washington, but the proposal was shot down by the PMO for the same reason that India wished to keep all contentious issues out of the summit.

In keeping with the emphasis on Indo-US economic engagement during the summit, a US-India CEO Forum constituted by the Indian Prime Minister and the US President in July 2005 for enhancing bilateral trade and investment is to be expanded and relaunched on Monday.

Ratan Tata, chairman of Tata Sons Ltd., will remain chairman of the Indian side, but his new US counterpart will be David Cote, chairman and CEO of Honeywell Inc.

Instead of 10 outgoing members, the new CEO forum will have 12 members from each country. As a concession to poliitcal correctness, one fourth of the Indian members will be women CEOs.

On the US side too, concessions to political correctness have been made by including women CEOs and companies promoting clean energy and green economy.

But the big change for the Americans, reflecting their country’s wounded financial apparatus was a resolve in the White House to drop JP Morgan Chase from the forum’s co-chair.

Chase was very keen to retain the post, but the US felt that a company representing financial services, now largely surviving on borrowed time with handouts from the US treasury, was a bad advertisement for America’s corporate strength.

Hence the choice of Honeywell, a conglomerate with diversified interests ranging from defence to communications and a large presence in India.

Honeywell lobbied very hard for the co-chair, even hosting an “India Day” this month at their offices here, a stone’s throw from Capitol Hill.

Interesting that the PMO turned down requests by the US Commerce Sec and Trade Rep! Hmmn I wonder, increased Indian economic clout?