Backed by the Asian Development Bank (ADB), the Trans-Afghanistan Pipeline (TAPI) aims to export up to 33 billion cubic metres (bcm) of natural gas through a proposed pipeline from Turkmenistan to Afghanistan, Pakistan and India. The promise of TAPI was based on the growing energy deficit in South Asia, high hydrocarbon prices and an abundance of natural gas reserves in the neighbouringcountry of Turkmenistan.

There is a need for both India and Pakistan to find long-term sustainable solutions for their ever-growing energy demands. A shortage of supply, especially for power generation, is slowing these two countries’ economic growth considerably.

In South Asia, natural gas is rapidly gaining importance as the key fuel for power generation. Gas-based power generation plants are more economical to build than alternatives such as nuclear, hydropower and coal-fired plants. Gas-fired combined-cycle turbines are flexible and able to respond quickly to peak electricity demand. Gas-based generation is also significantly cheaper than fuel oil or diesel, often used to produce electricity in India and Pakistan.

The most efficient way to address the energy deficit in South Asia is, therefore, based on the construction of gas-fired power plants. Gas is abundant in neighbouring countries such as Iran, Qatar and Turkmenistan, but the energy reality on the ground is often shaped by obstacles, which overweigh the advantages that geographical conditions offer. Iran is still under sanctions, Afghanistan remains unstable and only Qatar offers new hopes with cheaper oil-linked LNG supplies, which could counter-balance the pricing advantages offered by TAPI.

Oil prices offer little incentive for South Asian energy producers to switch from oil- or diesel-based power generation to natural gas 

Gas as the fuel of choice seems to be under (a temporary) threat as well. Lower oil prices offer little incentive for South Asian energy producers to switch from fuel oil- or diesel-based power generation to natural gas. For instance, gas has traditionally dominated Pakistan’s thermal generation. However, stagnation of domestic production and increased competition for gas from the country’s transport sector and fertiliser producers have led to a considerable decline in the usage of gas for energy production in Pakistan. However, the sharp rise in power generation costs has increased the appetite of companies to switch back to gas. But with the fall in oil prices, there is a risk that this trend might reverse and decrease Pakistani energy companies’ commercial interest in imported LNG or pipeline gas.

$2.4 billion

An increase in the estimated cost of TAPI

A combination of factors such as the oil price fall and uncertainty about transit via Afghanistan is likely to delay the launch of the TAPI further. The estimated cost of the gas pipeline has increased from $7.6 billion to $10 billion, and the estimated price based on oil-linked formula dropped from $10-$11 per MMBtu ($360-$380 per 1,000cm) to $7 per MMBtu ($250 per 1,000cm). While the price range of $6 per MMBtu ($220-$230 per 1,000cm) on the Turkmenistan-Afghanistan border is acceptable for Turkmengaz, it’s still unclear who will lead and finance the TAPI project.

According to the agreed timelines, the selection of the consortium leader should be finalised before the end of October. Needless to say, the leader has to have sufficient financial and technological clout to lead the project. An increase in the cost of the pipeline and decreased gas prices have reduced the interest of major players in TAPI.

Furthermore, Turkmenistan’s legislation does not allow the granting of large scale onshore concessions/PSAs to foreign companies, which, in turn, reduces their interest in TAPI. Granting access to onshore deposits to the consortium leader might help to choose an appropriate candidate. Alternately, Turkmenistan can lead the project directly or via Turkmengaz with the help of an international consortium. A trans-Afghan energy bridge could bring peace and stability to the conflict ridden-country. In fact, all neighbouring countries, including Turkmenistan, have a vital interest in a stable Afghanistan.

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This article was originally published in Oil Journal, LUKOIL Overseas’ official English-language newspaper. To read it at Natural Gas Europe's website, click here.

Defence & Diplomacy: Afghanistan Reconnect Process by sultanhali

These were the dominant themes of the EastWest Institute’s advocacy and outreach mission to Pakistan’s capital of Islamabad from March 18-20, 2015, conducted as part of the Afghanistan Reconnected initiative (also referred to as the Abu Dhabi Process). The mission was carried out by a delegation of parliamentarians, former ministers and private sector experts from Afghanistan, Pakistan, India, the United States and Turkey. First convened by EWI in 2012, this distinguished group has continued to meet in order to address the region’s need for reforms and develop concrete recommendations for improving cross border cooperation in the fields of energy, trade and infrastructure.

President of Pakistan H.E. Mamnoon Hussain expressed sincere appreciation for EWI’s long standing commitment to the region. A series of intense exchanges with several high-level governmental policy-makers of Pakistan focused on the challenges of regional infrastructure construction and cross-border trade facilitation, including the development of a functioning regional network of roads, air and railway transportation as a prerequisite for further developments in trade, energy and mining. The relevant ministries of Pakistan also received the recommendations in writing and assured that these will be carefully considered.

All meetings took place in a frank and friendly manner and were off the record, except the inauguration which drew great attention from the media. Speaking at that opening, Ambassador Martin Fleischer, EWI’s vice president and director of its Regional Security Initiative, underlined that the Afghanistan Reconnected Process is based on the conviction that security and economic development are interdependent. Fleischer also asserted that unlocking the economic potential of the region is dependent not only on Afghanistan’s own transformation and institution-building, but also on reforms in Afghanistan’s neighboring countries and cooperation between them.

In his keynote speech, H.E. Sartaj Aziz, advisor to the prime minister on foreign affairs and national security, termed Afghanistan a vital connector for regional energy, communication and transmission corridor. Discussing his government’s efforts to link these corridors, Aziz referred to recent agreements on the Peshawar-Kabul Road and Chaman-Qandhar railway lines, affirming that these links would not only improve trade relations between the two countries, but would also help connect Central Asia with South Asia. The extension of the Afghanistan-Pakistan Transit Trade Agreement (APTTA) to Tajikistan and other regional countries would be a great step in the right direction. Aziz stressed his government’s fundamental conviction that only peace and development in Afghanistan can bring stability to the region. Pakistan would continue to support the reconstruction of Afghanistan, particularly in a post–NATO situation. This would include bilateral and regional projects, such as the Kunar dam, with its capacity to generate 1500 MW of hydro-electricity, and the Central Asia South Asia Electricity Transmission and Trade Project CASA-1000 and its upgrade to CASA- 1300 with addition of 300 MWs.

H.E. Sayed Tariq Fatemi, special assistant to the Prime Minister of Pakistan on Foreign Affairs, lauded EWI’s initiative and stressed the imperative role of the business community and private sector in expanding Pakistan-Afghanistan economic cooperation and advancing the shared goals of regional connectivity and economic integration. “A peaceful neighborhood is a pre-requisite for Pakistan’s economic development” he stressed and added that since the establishment of a new national unity Government in Afghanistan, relations between Afghanistan and Pakistan had substantially improved.

H.E.  Shahid Khaqan Abbasi, federal minister for Petroleum and Natural Resources urged Pakistan, Afghanistan and neighboring countries to engage in intensive partnerships to meet their growing energy demands, and to harness the massive economic opportunities provided by energy trade. He said that the region is at the early stages of a transition toward an energy economy in response to a global trend toward prioritizing energy security. Abbasi stressed  that there are no political obstacles to the implementation of major regional energy projects such as TAPI and CASA-1000. As a gateway to resource rich Central Asia, Afghanistan holds the keys to unlock a prosperous regional economy by acting as a transit route for energy supplies from Central Asia to energy markets in South Asia—a “scenario with win-win potentials for all stakeholders,” Abbasi said.

H.E. Eng. Khurram Dastgir Khan, minister of Commerce, outlined Pakistan’s plans for massive investment to improve infrastructure on the border with Afghanistan and India, and initiatives to upgrade port capacities at Karachi, port Qasim and port Gawader, in order to provide opportunities for Afghanistan and other Central Asian Republics to expand access to regional and international markets. Khan affirmed that new land-ports will be constructed at the Torkhan and Wagah borders to expedite Afghan exports and imports across Pakistan.

H.E. Mohammed Zubair, minister of Privatization, was briefed on the Turkish experience with private sector engagement in border management, which has led to substantial improvement in Turkey’s border posts at little or no cost to the government. The minister expressed a desire to explore the applicability of this innovative model in Pakistan.

A cross-cutting theme in all talks was the need to normalize relations with India, or at least put political issues aside, so as to foster cross-border economic cooperation. The next advocacy mission of EWI’s Afghanistan Reconnected series will take place in New Delhi mid-June this year.

Afghanistan Reconnected is funded by the governments of Germany and the U.A.E., as well as private donors. The mission to Islamabad was supported by the Pathfinder Group and its Chairman Ikram Seghal, who is also a member of EWI’s board of directors, and the Karachi Council on Foreign Relations (KCFR). EWI’s Chief Operating Officer Mr. James Creighton signed a Memorandum of Understanding with KCFR to sustain the cooperation between the two institutes.
 

Media Coverage 

1.      Dawn

2.      The News

3.      Express Tribune

4.      Express Tribune ISL

5.      Daily Times

6.      Business Recorder

7.      Pakistan Observer

8.      Jang

Event Photos

Advocacy meeting with H.E. Eng. Khurram Dastgir Khan, Pakistani Minister of Commerce 
 

Speech at opening session by H.E. Sartaj Aziz, Advisor to the Prime Minister on National Security and
Foreign Affairs, Pakistan
 

Exchange of gifts between EWI CEO James Creighton and Ahsan Mukhtar Zubairi, Secretary General
and CEO, Karachi Council on Foreign Relations (KCFR) 
 

EWI delegation leaving the Presidency after meeting with President Hussain

The East West Institute (EWI) US, which was founded in 1980 with Ross Perot Jr as chairman, is an international, non-partisan organisation with offices in New York, Brussels, Moscow and Washington. Its track record has made the EWI a global go-to place to build trust, influence policies and deliver solutions. This prestigous think tank seeks to make the world a safer place by addressing seemingly intractable problems that threaten regionaland global stability.

A composite delegation of business leaders is meeting in Islamabad today, with the Pathfinder Group assisting the EWI in facilitating discussions with members of the private sector, parliamentarians from the region and relevant governmental institutions in Pakistan about the EWI’s Afghanistan Reconnected Process (ARP). This was previously called the Abu Dhabi Process because it was, at one time, being funded solely by Abu Dhabi. Now, it has the additional support of the German government to address opportunities and challenges for economic growth in Afghanistan and the rest of the region, comprising India, Pakistan, Iran, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan and China. The UAE, US, Europe and various regional and international organisations are supporting the process. According to Ambassador Martin Fleischer, the vice president and director of the EWI’s Regional Security Initiative, ARP is based on the conviction that security and economic development are interdependent. Afghanistan’s future is dependent not only on its own transformation but also on reforms in its neighbouring countries, unlocking the region’s economic potential. The EWI’s advocacy and outreach missions are aimed atfosteringa demand driven reform process, from which Afghanistan and its neighbouring countries, particularly Pakistan, could greatly benefit.

The EWI’s present advocacy and outreach mission to Pakistan is a follow-up to the high-level consultations held from 2013 to 2014, addressing the region’s need for reforms and crossborder cooperation in the fields of energy, trade and infrastructure. The mission focuses on regional infrastructure and connectivity, such as developing a functioning regional network of roads, air and railway transportation as a prerequisite for further developments in trade, energy and mining. The first consultation, ‘Afghanistan reconnected: Afghanistan’s potential to act as an economic land bridge in Asia’ was held in Istanbul from April 9 to April 11, 2013. The second, ‘Afghanistan reconnected: linking energy suppliers to consumers in Asia’, was held in Islamabad from September 2 to September 4, 2013, to address the possibilities for regional energy trade between suppliers and the energy markets, especially in South Asia, focusing on Afghanistan’s potential not only as a transit country but as a future producer of energy. Held in New Delhi on November 19 and 20, 2013, the third consultation emphasised the need to invest in Afghanistan’s potential and facilitate the transition from an aid-based economy to a sustainable market economy.

The fourth consultation, ‘Afghanistan reconnected: creating momentum for regional economic security’ was held in Berlin from April 8 to April 10, 2014. The consultation reviewed progress on regional economic cooperation to develop an agenda of targeted activities to be implemented in 2014 and 2015. Based on the Istanbul recommendations (in the fifth consultation, held on November 26-27, 2014), the private sector was recruited to advocate the implementation of the priority reform measures identified.The EWI has engaged with prominent business leaders, parliamentarians and senior government officials from the region to develop a sustainable partnership for efficient trade expansion. The Istanbul conference identified bottlenecks in regional trade and developed practical recommendations to unlock trade potential. The recommendations included adopting long-term multi-entry visa regimes to facilitate themovement of entrepreneurs in the region, establishing cross-border free trade zones,reducing smuggling and informal trade, and adopting single window customs clearance systems to streamline customs’ procedures.

The EWI’s advocacy paper has a three-pronged purpose: to lay out macro issues affecting regional cooperation and development in Afghanistan and its neighbours. To analyse in greater detail select areas of regional economic security, with good prospects for progress in the short term and help generate momentum and facilitate breakthroughs in dealing with more difficult issues.To make a case for the private sector’s proposal on regional trade and transit policy reforms.Opportunities for regional cooperation exist in various sectors including, border management, security, narcotics and trade and transit facilitation, transport infrastructure and trade facilitation, narcotics production and trafficking,electricity trade, hydropower generation and energy issues. Given the political obstacles to such progress, there is a need for political initiatives aimed at building mutual confidence, easing political concerns, attaining donor support and helping increase benefits from regional cooperation.

Obstacles to trade include infrastructure costs arising from the lack of proper legal and regulatory systems, restrictive trade policies, poor border management and the absence of effective transport facilitation. They also include inadequately harmonised trade and customs procedures, lack of transparency, high levels of corruption, illegal trade, a weak private sector and the absence of vital services such as trade, finance and telecommunication facilities. While the second tier of obstacles can be resolved relatively quickly, effective cooperation is necessary amongst regional players and within each country to overcome these issues. Once addressed, these systems can pave the way to resolving the more daunting obstacles holding back growth and stability.

Increased regional transit trade will boost private investment and growth in the short term, helping realise the long term vision for Afghanistan as a trade and transit hub. Sustained peace in Afghanistan, open trade and private sector growth, facilitated by supportive public policies, institutions and social and infrastructure investments, will help secure higher growth and reduce the risk of future economic insecurity. In order to promote long distance and continental trade with landlocked Central Asia, the development of ports serving the Indian Ocean is critical. Afghanistan’s trade is now mostly via Pakistan, through Karachi and Port Qasim. Together these two ports have a total of 40 berths that are largely underutilised. With the new Gwadar deep water port becoming increasingly functional, the China Pakistan Economic Corridor (CPEC) can become a major force to facilitate as much as 50 percent of the total transit from Central Asia. CPEC is a game changer for the region; with increases in efficiency and trade facilitation, the capacity of all these ports could be enhanced. The prerequisite to peace and prosperity in the region is understanding and cooperation between landlocked Afghanistan and Pakistan because Pakistan provides the gateway to the Indian Ocean and the world. Ashraf Ghani’s election as Afghanistan’s President had an extraordinary effect in bettering the relations between the two countries. In the words of this visionary, “we cannot let the past bury the future”.

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To read the article at The Daily Times, click here.

Vice President and Director of Regional Security Ambassador Martin Fleischer presented EWI’s activities in the region, introducing a keynote speech by Ambassador Miroslav Jenča, Special Representative of the UN Secretary-General for Central Asia and head of the United Nations Regional Centre for Preventive Diplomacy for Central Asia (UNRCCA). The high-level event was enriched by comments from Mr. James Appathurai, Deputy Assistant Secretary General for Political Affairs and Security Policy, and Secretary General’s Special Representative for the Caucasus and Central Asia, NATO; H.E. Mr. Homayoun Tandar, Ambassador of Afghanistan to the European Union, Belgium and Luxembourg; and H.E. Mr. Rustamjon Soliev, Ambassador of Tajikistan to the European Union, Belgium and Luxembourg. The roundtable discussion was moderated by Mr. Christian Forstner, head of the Hanns Seidel Foundation’s Brussels Center.

Ambassador Fleischer outlined the prospects for stability and cooperation in Afghanistan and Central Asia, presenting the steps taken by EWI’s Afghanistan Reconnected Process. This initiative aims at forging regional economic cooperation to minimize the economic impact of security transition in Afghanistan in the years to come, by engaging governments, Members of Parliament and private-sector leaders from the region. The Afghanistan Reconnected Process has identified energy trade and transit, cross-border trade facilitation and investment in regional transport infrastructure as most urgent areas of cooperation that can contribute to enhanced cooperation and economic security in the region. In 2015, EWI will undertake comprehensive regional advocacy and outreach missions for the implementation of the priority measures identified, with the private sector as main driver of the economic cooperation agenda.

While recognizing the value of EWI’s initiatives in the region, Ambassador Jenča acknowledged the increasing complexity of Central Asia and the need for more regional cooperation, in the interest of stability. The situation is not only related to the completion of NATO’s combat mandate in Afghanistan, the withdrawal of troops and the potential security implications on Central Asia, but also to other regional and broader challenges. In particular, the presence of Central Asian foreign fighters in the Middle East, the crisis in Ukraine, the falling ruble and prices of oil and gas, as well as the decreasing remittances of labor migrants from Central Asia in Russia also had a significant impact on the region and its stability.

Beyond the issue of regional cooperation, Ambassador Jenča wondered if countries of the region truly identified with Central Asia as a region. The lack of regional structures, limited cooperation, communication, transport links and cross-border trade, which stagnates at about 6 percent of total trade in each country, seem to suggest that this is not the case. The slow progress of the CASA 1000 and TAPI projects exemplify the skepticism encountered by cross-border initiatives, which require further stability and international community involvement to succeed.

At the same time, Ambassador Jenča mentioned that the main challenges and obstacles to stability often lie within Central Asian states. The succession of political leaders, socio-economic problems, marginalization, shortcomings in the rule of law, religious extremism, inter-ethnic tensions and organized crime are issues which need to be addressed by the countries in the region in particular through preventive efforts, which UNRCCA promotes. Moreover, the more stable, democratic and prosperous the countries will become, the more resistant they will be to external threats.

Despite the risks and threats faced by the region, Ambassador Jenča stressed that Central Asian states had made continuous progress in the past 20 years and had managed to keep the region stable. In this respect the international community needs to build upon and sustain the developments achieved in the region. As Central Asian states continue to diversify their foreign policy and partners to face increasing challenges, the EU has the opportunity to become an even more attractive partner in the region, and may consider more targeted support to Central Asia.

The ensuing discussion referred to the challenges posed to the region by unresolved border disputes, tensions over the use of common water resources and energy needs, marginalization and human rights questions, drug trafficking, terrorism and other forms of organized crime. Such trends continue to undermine regional stability and require concerted efforts by all countries of Central Asia to develop effective responses.

The regional dimension of the threat of violent extremism was strongly remarked, in light of the possible return of over 2,000 fighters from the region who joined the IS insurgency in Iraq and Syria. In addition, Ambassador Soliev noted that IS has announced future actions in Pakistan and Afghanistan, raising the level of alert of neighboring countries. A recent meeting of deputy foreign ministers from the region has discussed the issue at length in Ashgabat, Turkmenistan.

In addition, developments in Afghanistan are affecting security in Central Asia as a whole, as there is a potential threat of terrorist and extremist actions related to lesser control over the Afghan territory after the withdrawal of the International Security Assistance Force (ISAF). In this respect, Ambassador Tandar stressed the key role of Afghanistan, which he described as “The Shield of Central Asia” in the fight against terrorism.

Speakers agreed that ISAF and the international community have not successfully addressed narco-trafficking stemming from Afghanistan during ISAF’s mandate, and that it is having an impact outside the country’s borders, feeding organized crime in the region and beyond. As the NATO presence decreases, poppy cultivation is increasing—as forecasted by UNODC, whose regional program on the topic is coming to an end. These developments may exacerbate the already fragile security situation in the region. Further commitment is therefore required from the international community. NATO is available to provide support to Central Asia in relation to narco-trafficking, as well as in the field of border control and transit through training and mapping exercises. However, its involvement should not be seen as part of a zero-sum game by other influential actors in the region, as it will not be embedded in a political agenda.

It was also mentioned that Central Asian states can play a more important role in stabilizing Afghanistan, using their comparative advantages of geographical proximity, cultural similarities, and potential for mutually beneficial regional cooperation. Countries in the region are already involved in Afghanistan’s energy, infrastructure, transport and capacity building, but further engagement is necessary. These countries, however, need to be supported by the international community in order to harvest the fruits of regional cooperation. In particular, Afghanistan needs to be better engaged in regional processes and relevant regional initiatives. At this critical time, international support for concrete projects is needed more than ever.

Speakers agreed that Central Asian states feel they need to survive between two powerhouses: Russia and China. The former’s influence in security and politics is great, and the latter’s economic clout is growing continuously.  This often puts countries in the region in front of difficult choices. For example, Ambassador Jenča referred to Kyrgyzstan’s decision to join the Eurasian Economic Union, as well as China’s pledge of 3 billion dollars for projects in the region, through its Silk Road Initiative. Central Asian states are strengthening ties with these partners, while others’ commitments to the region have been less consistent. In particular, the US’ interests in the region remain unclear, while the EU needs to show itself as a more appealing partner, beyond its ongoing engagement in the area.

Particular attention was paid to the EU’s involvement in Central Asia, thanks to the contribution of Members of European Parliament Dorfmann and Zeller from the audience. More specifically, they highlighted how the EU is lagging behind Russia and China in the establishment of its priorities in the region. After the launch of the EU Strategy for Central Asia in 2007, its role was largely neglected until the current Latvian EU Presidency, which has committed to producing a more focused updated strategy by the summer. The EU has nonetheless expanded its assistance to Central Asia, and the European Parliament has been supporting the region’s path towards democracy. Moreover, Ambassador Soliev reminded the audience about the upcoming EU-Central Asia High-level Security Dialogue, to be held on March 11, 2015, in Dushanbe, Tajikistan.

Ambassador Jenča stressed fostering cooperation and establishing partnerships as fundamental factors for advancements in the region. In particular, he recognized the commitments in this direction made by Afghanistan’s President Ashraf Ghani, who, since his inauguration has conducted numerous international missions aimed at strengthening ties with neighboring countries. Moreover, looking at the region as a whole, Ambassador Jenča concluded that cooperation between states in the region is an absolute priority for stability, and that the implementation of national reforms is key.

In this sense, in the margins of the conference, the UNSRSG and EWI formed a partnership for the final and critical phase of the Afghanistan Reconnected Process, aiming at advocating for reforms with governments in the region. By sharing the policy recommendations developed by business leaders from Central Asia and neighboring countries with concerned national administrations, the initiative will promote and support change towards enhanced economic cooperation and stability for the region.

Malik is the former director of the Human Development Report Office at the United Nations Development Programme (UNDP). His professional experience in development economics and implementing related programs brought a unique perspective to his presentation, which was followed by a lively question-and-answer session.

Utilizing development data and anecdotes from his time at the UNDP, Malik described how economic inequality, social stratification and uneven access to services drive otherwise peaceful people to ideological extremism and violence.

According to Malik, three important and interrelated forces that push people towards violent extremism are “exclusion, climate change and job insecurity.”

The international community needs to be more “inclusive of other perspectives and increase understanding, in order to implement more effective development policies,” said Malik. Not doing so, he said, has led to inefficient allocation of aid and pushed many in Iraq and Afghanistan, for example, toward violent extremism.

When discussing the impact of climate change on religious extremism, Malik pointed to the Syrian conflict and a drought that began in 2002 that precipitated massive job shortage, ultimately serving as a trigger for the current conflict. Malik also tied climate change issues to conflicts in Mali, Niger and even the rise of Boko Haram in Nigeria.

Malik pointed out that 98 percent of the damage wrought by violent extremism occurs in developing countries. He also highlighted a study which found that 70 percent of young Taliban fighters had joined the group because it offered a rare steady job. Malik was careful to point out that job insecurity does not always lead to a rise in violent extremism, but is often a common feature of regions experiencing it.

When asked whether there were policies that do work to increase access to services and decrease inequality and stratification, Malik displayed some optimism.

“If we stop the flow of illicit money, educate the people and invest in job creation programs, we can see tremendous positive change.”

One outcome of President Barack Obama’s visit to India that has received the greatest attention is the breakthrough on the nuclear deal front. For the US, India’s unwillingness to resolve the outstanding issues reflected a lack of commitment to the strategic relationship. This had affected the overall political relationship. 

The supplier liability issue seems to have resolved by India’s decision to set up an insurance pool to discharge liability, as well as a written clarification on the applicability of Section 46 only to operators and not suppliers. On the vexed national tracking issue the nature of the understanding with regard to reconciling the provisions of the 123 agreement, our “international obligations” and the Canadian template under which only International Atomic Energy Agency (IAEA) tracking is required, is not yet fully clear, but a “done deal” has been announced. Yet, the larger question of the commercial viability of US supplied reactors remains, a point alluded to in Prime Minister Narendra Modi-Obama joint press conference. Modi has done well to transfer the subject from government level to commercial level so that the negative politics surrounding the subject is eliminated.

Defence has been the other touchstone for the US to measure India’s willingness to deepen the strategic partnership. During the president’s visit, significant progress was expected to be announced under the Defence Technology and Trade Initiative. This has not happened, but some progress has been made, with four “pathfinder” projects being announced involving relatively less complex technologies. As expected, the India-US Defence Framework Agreement of 2005 has been extended for another 10 years.

A document of considerable geopolitical significance signed during the visit is the US-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region. During his September visit to Washington, Modi had spoken about India-US convergences in the Asia-Pacific region and had declared that the US was intrinsic to India’s Act East and Link West policies. In the joint statement issued after the bilateral discussions on Sunday, the two sides have noted that India’s Act East Policy and the US rebalance to Asia provide opportunities to work closely to strengthen regional ties. 

A separate document on the subject shows how far India has travelled in affirming, along with the US, the “importance of safeguarding maritime security and ensuring freedom of navigation and overflight throughout the region, especially in the South China Sea”. The document also calls on all parties to avoid the threat or use of force and pursue resolution of territorial and maritime disputes through all peaceful means in accordance with international law, including the Law of the Sea Convention. 

It speaks, in addition, of India and the US investing in making trilateral countries with third countries in the region, with Japan and Australia clearly in mind. This is a direct message addressed to China, reflecting less inhibition on India’s part both to pronounce on the subject and do it with the US, irrespective of Chinese sensibilities. Some Chinese commentary has criticised this effort by the US to make India part of its containment strategy, without taking cognisance of how India views China’s maritime strategy in the Indian Ocean, its strategic investments in Sri Lanka, Maldives, Pakistan and other countries.

The Obama visit has also demonstrated the good personal rapport established between him and Modi, with embraces and first name familiarity, walk in the park and talk over tea, all of which adds to the prime minister’s personal stature as a man comfortable and confident in his dealings   with the leader of the most powerful country in the world on the basis of equality. This personal rapport could be leveraged to make the White House exercise continuing oversight over the Administration’s policies towards India, which experience shows is very helpful for the bilateral relationship.

Counter-terrorism
Counter-terrorism is always highlighted as an expanding area of India-US cooperation because of shared threats. The joint statement speaks dramatically of making the US-India partnership in this area a “defining” relationship for the 21st century. Because the biggest terrorist threat to India comes from Pakistan, does this mean that the US will share actionable intelligence with us on terrorist threats to us emanating from Pakistani soil? One can remain doubtful about this. The continued omission of the Afghan Taliban from the list of entities India and the US will work against is disquieting, as it indicates US determination to engage the Taliban, even when it knows that it is Pakistan’s only instrument to exert influence on developments in Afghanistan at India’s cost.

On trade, investment and intellectual property rights (IPRs) issues, the two sides will continue their engagement with the impulse given to the overall relationship by these Obama-Modi exchanges. On the Bilateral Investment Treaty, the two sides will “assess the prospects for moving forward”. On the totalisation agreement the two will “hold a discussion on the elements requires in both countries to pursue” it, a language that offers little hope. On IPRs, there will be enhanced engagement in 2015 under the High Level Working Group. The Higher Education agenda seems essentially stalled as the joint statement shows. 

On climate change, we have reiterated the decision to work together this year to achieve a successful agreement at the UN conference in Paris, even when our respective positions are opposed on the core issue of India making specific emission reduction commitment. While stating that neither the US nor the US-China agreement put any pressure on India, he acknowledged pressure on all countries to take steps for the sake of posterity. He has finessed the issue for the present with this artful language. All in all, president Obama’s visit has given a welcome boost to India-US ties.

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To read the article at Deccan Herald, click here.