World Leaders Come Calling in India
|Dec 17, 2010|
In counterpoint to the traditional dragon-elephant rivalry associated with China and India, Chinese Premier Wen Jiabao flagged off his three-day state visit to India on Dec. 15 by drumming up deals worth US$16 billion.
Although Wen's state visit to India – his second after 2005 -- lacks the pizzazz of the US presidential visit in November, it is significant in more ways than one. The sojourn is the latest in a series of high-profile state visits in quick succession by global chieftains to India. By year-end, India will have hosted all the heads of government of the P-5, the veto-wielding permanent members of the United Nations Security Council (UNSC).
The first to arrive in July was British Prime Minister David Cameron, accompanied by Britain's largest-ever delegation of ministers and corporate chieftains. That was followed by Barack Obama's arrival, dazzling Delhi with his charm offensive and a 215-member business delegation.
Barely had Delhi recovered from the Obama atmospherics than French President Nicolas Sarkozy landed with his glamorous spouse Carla Bruni in the first week of December. Russian President Dmitry Medvedev's visit is scheduled to begin December 21.
"There's been no other instance in Indian diplomatic history where all the P-5 nations have visited one country within a space of six months," an Indian diplomat said
However, for all these heads of state visits, there's been more or less a single-point agenda — business deals worth billions of dollars with India Inc, designed to resuscitate their respective economies and generate jobs back home.
The visits, analysts say, underscore India's growing heft in the world order and the competition among nations to court India's $1.3 trillion economy, now 11th in the world but rising fast in rank.*
Sarkozy's visit to India saw the announcement of various deals estimated to be worth nearly US$13 billion. Among the major pacts signed during Sarkozy's four-day visit were one between French energy giant Areva and Nuclear Power Corporation of India Ltd (NPCIL) for the supply of two nuclear reactors and fuel.
Obama announced US$10 billion in business deals including Anil Ambani-led Reliance Power's US$2 billion-worth equipment sourcing plan and SpiceJet's pact with Boeing 777 to purchase 30 aircraft for nearly US$3 billion. All these deals are expected to generate more than 50,000 jobs in the US, which is grappling with high unemployment levels. The Cameron visit also saw the UK striking a US$1 billion-plus defense deal.
Similarly, Wen is accompanied by a delegation of more than 300 leading Chinese business leaders who have signed 47 memorandums of understanding with Indian firms ranging from telecom to power equipment. Prime Minister Manmohan Singh hosted an elegant private dinner for him in which the duo agreed to be "partners" and not "rivals" in a rapidly changing world order.
Defense analysts say these nations are also eyeing India's plans to purchase 126 fighter planes worth US$10.4 billion — among the biggest current arms deals worldwide. The contenders include Boeing Co.'s F/A-18 Super Hornet, Lockheed Martin Corp.'s F-16, Russia's MiG-35, Sweden's Saab KAS-39 Gripen and the Eurofighter Typhoon, built by a consortium of British, German, Italian and Spanish companies.
All visiting heads have made the right noises by criticizing a recalcitrant Pakistan for incubating nurseries of terror on its ground. Cameron spoke of Pakistan "looking both ways" in the "war on terror" and promoting "the export of terror". Obama said that "terrorist safe havens" in Pakistan were "unacceptable" and called on Pakistan to bring the "terrorists behind the Mumbai attacks" to justice. Medvedev too is more than likely to toe the same amicable line in endorsing India's stand on these issues, given the long-standing India-Russia friendship.
Significantly, all visiting heads have endorsed India's permanent membership in the Security Council. This is especially noteworthy at a time when New Delhi is making a strong pitch for a permanent membership in the Security Council.
As a sign of India's growing clout in the global arena, all the multi-billion dollar plans were unveiled during the visits of their respective country heads. Wen said he wants to take "the economic cooperation between India and China to a much higher level by increasing two-way trade and investment".
Already, China has emerged as India's biggest trade partner, with bilateral trade ratcheting up from a modest US$3 billion in 2000 to more than US$60 billion this year. Beijing is also eyeing India's infrastructure business and civil nuclear energy development.
Much like the other global powers, China too, is keen to benefit from India's healthy economy, which economists predict could outpace China's growth rate in 2011. The financial crunch has shrunk western markets for Chinese goods and Wen is thus keen to tap Indian markets for exports.
Analysts credit India's sound economic credentials for this unprecedented level of engagement from world leaders: a robust economy, nearly 300 million middle-class citizens with rising spending capacity and growth rates of 6.7 percent and 7.2 percent even during the slowdown years of 2008-09.
"Not only does this offer a potential market for global exports, but it also enhances India's strategic importance to these countries, given its geo-strategic location and potential to contain an increasingly assertive China," says Prateek Bhambri, a foreign policy analyst.
Bhambri says the wooing of India began in real earnest during the past two years of an economic meltdown which brought most of the developed economies to their knees. By 2030 India could have the third-largest gross domestic product in the world after the US and China and double its investment on infrastructure in five years from 2012 to US$1 trillion.
"The spotlighting of India is a sign of the geo-economic balance shifting towards India," Bhambri explained. "It has the potential for a spillover into geopolitics as well. After China, it is India which is in the reckoning for international business. And this came into focus particularly during the recent economic crisis."
Wen is the only visiting leader who has tied his India itinerary to a visit to Pakistan. Indian officials concede they had few expectations of Wen on this issue in any case, given Beijing's robust, all-weather friendship with Pakistan. They acknowledge that they are also aware of a spate of imminent economic and defense deals likely to be clinched between Beijing and Islamabad, including agreements on the sale of nuclear reactors.
Even so, Manmohan Singh's packed diplomatic diary, despite his lackluster governance in recent times and a spate of scandals to have hit his UPA government, is the most potent sign yet that the rest of the world has woken up to India's emergence.
Indeed, in a strange role reversal of sorts, India now presents these nations, which are on the rack due to ballooning deficits, with a lifeline for the present and the future in terms of trade investments and employment generation.
*India's ranking was misstated in an earlier version.
Neeta Lal is a New Delhi-based senior journalist