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Modi to Address both Houses of Congress in The US Next Week

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U.S. President Barack Obama and India's Prime Minister Narendra Modi (R) talk as they have coffee and tea together in the gardens of Hyderabad House in New Delhi January 25, 2015. REUTERS/Jim Bourg/File Photo
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NEW DELHI/WASHINGTON (Reuters) – Two years ago there were questions over whether Indian Prime Minister Narendra Modi could get a visa to enter the United States. Next week he visits Washington as one of President Barack Obama’s closest international allies.

Obama invited Modi for one of the last big visits by a world leader before his term ends in January. Although the trip won’t feature a lavish state dinner, the Indian leader will address both houses of Congress, considered a rare honor.

This will be their seventh meeting since Modi became prime minister in May 2014, an impressive tally for a U.S. president and a leader who is not a formal ally, said Ashley Tellis at the Carnegie Endowment for International Peace in Washington.

India's Prime Minister Narendra Modi (L) and U.S. President Barack Obama watch India's Republic Day parade from behind rain streaked bullet proof glass as they stand in the rain together in New Delhi January 26, 2015. REUTERS/Jim Bourg/File Photo
India’s Prime Minister Narendra Modi (L) and U.S. President Barack Obama watch India’s Republic Day parade from behind rain streaked bullet proof glass as they stand in the rain together in New Delhi January 26, 2015. REUTERS/Jim Bourg/File Photo

“The personal relationship between the president and the prime minister … is really one of the unanticipated surprises of the past two years,” said Tellis, an expert on India.

The developing relationship is seen as an Obama foreign policy success. Washington views India as an important part of its rebalance to Asia and as a counterweight to China.

The two countries are finalizing agreements that would make it possible for their militaries to cooperate more closely, and for U.S. defense manufacturers to both sell and make high-tech weaponry in India.
A deal on logistics would govern issues such as how the two countries account for costs of military exercises. Another involves encrypted communications and geospatial data transfer.

A history of colonial rule followed by decades of non-alignment has, however, made New Delhi wary of an embrace by the more powerful United States, which has overtaken Russia as India’s top arms supplier.

“It is neither a strategic partnership nor an alliance,” said Nitin Gokhale, founder of defense portal Bharat Shakti. “It can be a long-term arrangement, but to call it a strategic partnership would be premature.”

There are frustrations, too, on the U.S. side.

The two countries reached a civil nuclear agreement in 2005, but it has yet to yield any contracts for U.S.-based companies. Only now is Westinghouse, a unit of Japan’s Toshiba, approaching the finish line on a deal to build six reactors in India.

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The visit gives Modi a chance to network with U.S. lawmakers who may feature in a Donald Trump or Hillary Clinton administration but, as it coincides with the California primary, he is not expected to meet either.

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Modi is generally popular with U.S. lawmakers, who extended his invitation to address Congress. But they criticize what they see as lingering unfriendliness to U.S. firms and a stifling bureaucracy, and question New Delhi’s record on human rights.

“The economic engagement between our two countries should increase and it should be more accessible for U.S. companies,” Senator Bob Corker, the Republican chairman of the Senate Foreign Relations Committee, said in a telephone interview.

Obama and Modi are expected to discuss India’s desire to join the Nuclear Suppliers Group (NSG), a 48-member club of nuclear trading nations.

India was shut out for decades because of its weapons program, and the civil nuclear agreement with the United States gave it access to foreign suppliers without giving up its arms.

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Obama administration officials have said they backed India’s desire to join the group, but the idea faces resistance among some on Capitol Hill, as well as from China, an ally of India’s arch-rival Pakistan.

“Existing NSG guidelines were established to guard against nuclear proliferation, and we should not create exceptions for particular countries,” Corker said.

There is lingering concern in Washington over Modi’s handling of communal riots in 2002 that killed at least 1,000 people, mostly Muslims, in Gujarat.

Modi was chief minister of the state at the time and, though a court-ordered inquiry found insufficient evidence to prosecute him, the issue prevented him from getting a U.S. visa for years.

Ben Cardin, the ranking Democrat on the Senate Foreign Relations Committee, raised human rights on a visit to New Delhi this week, saying the two largest democracies had “special obligations” to set the highest standards.

Congress’ Tom Lantos Human Rights Commission has scheduled a hearing on India for June 7, the day Modi arrives in Washington and the day before his address to the combined House of Representatives and Senate. He leaves the United States on June 8.

Corker promised to ask Modi about India’s record on human trafficking, which he brought up recently in an emotional Senate hearing with Obama administration officials.

“The country we believe has 12-14 million slaves, which is close to half the number we believe exists worldwide,” Corker said. “It’s obviously a very significant issue and when he’s here, it’s one I certainly plan to raise.”

 

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How telecom has become driver of economic change in India

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The country's hyper-competitive telecom sector has led the revolution from the front.
The country's hyper-competitive telecom sector has led the revolution from the front. Wikimedia Commons
  • India has done well to stay ahead of the curve in the technological revolution
  • The sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991
  • India has managed to provide the cheapest telephony services around the world

For the most part of human history, the change was glacial in pace. It was quite safe to assume that the world at the time of your death would look pretty much similar to the one at the time of your birth. That is no longer the case, and the pace of change seems to be growing exponentially. Futurist Ray Kurzweil put it succinctly when he wrote in 2001: “We won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress (at today’s rate).” Since the time of his writing, a lot has changed, especially with the advent of the internet.

India has done well to stay ahead of the curve in the technological revolution. The country’s hyper-competitive telecom sector has led the revolution from the front. In fact, according to Reserve Bank of India data, the sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991, growing by over 10 percent. On the other hand, no other sector has had a productivity growth of above five percent during the same period. It is no wonder that it has also been one of the fastest-growing sectors of the Indian economy, growing at over seven percent in the last decade itself.

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Such an unprecedented pace of growth has been brought about the precise levels of change that Kurzweil was so enthusiastic about. Today’s smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Meanwhile, India has managed to provide the cheapest telephony services around the world, which has hit rock bottom after the entry of Reliance Jio. This has ensured access to those even at the bottom of the pyramid.

A rise in internet penetration has distinct positive effects on economic growth of a country.
A rise in internet penetration has distinct positive effects on economic growth of a country. Wikimedia Commons

Even though consumers have come to be accustomed to fast-paced changes within the telecom sector, the entry of Jio altered the face of the industry like never before by changing the very basis of competition. Data became the focal point of competition for an industry that derived over 75 percent of its revenue from voice. It was quite obvious that there would be immediate economic effects due to it. Now that we’re nearing a year of Jio’s paid operations, during which time it has even become profitable, we saw it fit to quantify its socio-economic impact on the country. Three broad takeaways need to be highlighted.

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First, the most evident effect has been the rise in affordability of calling and data services. Voice services have become practically costless while data prices have dropped from an average of Rs 152 per GB to lower than Rs 10 per GB. Such a drastic reduction in data prices has not only brought the internet within the reach of a larger proportion of the Indian population but has also allowed newer segments of society to use and experience it for the first time. Since the monthly saving of an average internet user came out to be Rs 142 per month (taking a conservative estimate that the consumer is still using 1 GB of data each month) and there are about 350 million mobile internet users in the country (Telecom Regulatory Authority of India data), the yearly financial savings for the entire country comes out to be Rs 60,000 crore.

To put things in perspective, this amount is more than four times the entire GDP of Bhutan. Therefore, mere savings by the consumer on data has been at astonishing proportions.

Today's smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Wikimedia Commons
Today’s smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Wikimedia Commons

Now, this data has been used for services that have brought to life a thriving app economy within the country. So, the second level of impact has been in the redressal of a variety of consumer needs — ranging from education, health and entertainment to banking. For instance, students in remote areas can now access online courseware and small businesses can access newer markets. Information asymmetry has been considerably reduced.

Third, a rise in internet penetration has distinct positive effects on economic growth of a country. These effects arise not merely from the creation of an internet economy, but also due to the synergy effects it generates. Information becomes more accessible and communication a lot easier. Businesses find it easier to operate and access consumers. Labour working in cities has to make less frequent trips home and becomes more productive as a result. Education and health services become available in inaccessible locations. Multiple avenues open up for knowledge and skill enhancement.

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An econometric analysis for the Indian economy showed that the 15 percent increase in internet penetration due to Jio and the spill-over effects it creates will raise the per capita levels of the country’s GDP by 5.85 percent, provided all else remains constant.

Thus, India’s telecom sector will continue to drive the economy forward, at least in the short run, and hopefully catapult India into 20,000 years of progress within this century, as Kurzweil postulated. The best approach for the state would be to ensure the environment of unfettered competition within the industry. Maybe other sectors of the economy ought to take a leaf out of the telecom growth story. The Indian banking sector comes to mind. However, that is a topic for another day. (IANS)

(Amit Kapoor is Chair, Institute for Competitiveness, India. He can be contacted at Amit. Kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav, a senior researcher at the institute, has contributed to the article.)