US President Barack Obama ended a landmark day in India on Monday with a pledge of $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 U.S. president to attend India's annual Republic Day parade, a show of military might that has been associated with Cold War anti-Americanism. 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.
The leaders talked on first name terms, recorded a radio programme together and spent hours speaking at different events, but despite the bonhomie, Obama and Modi reminded business leaders that trade ties were still fragile. India only accounts for 2 percent of U.S. imports and one percent of its exports, Obama said. While annual bilateral trade had reached $100 billion, that is less than a fifth of U.S. trade with India's neighbour, China.
"We are moving in the right direction...That said, we also know that the U.S.-India relationship is defined by so much untapped potential," Obama told the Indian and U.S. business leaders. "Every one here will agree, we've got to do better." Modi said U.S. 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 U.S. Export-Import Bank would finance $1 billion in exports of 'Made-in-America' products. The U.S. 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 U.S. 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.
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