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Immigration bill, IT 'curbs' also on Kerry, Khurshid's agenda

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Chokkapan
New Update

NEW DELHI, INDIA: Defense, development and diplomacy - and not necessarily in that order - have been the key instruments of foreign policy of the Obama administration over the last four years. And they will be in full play when United States (U.S.) Secretary of State, John Kerry, is in New Delhi to co-chair the 4th annual India-US strategic dialogue with External Affairs Minister, Salman Khurshid, on Monday, preceding Prime Minister Manmohan Singh's possible visit to Washington in September-October.

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The strategic dialogue interestingly this time is taking place after highest level parleys between China and India, India and Japan, China and the US, and ahead of the ASEAN Regional Forum (ARF) meeting and the third East Asia Summit (EAS) Foreign Ministers' Meet, amid reports that China may consider joining the Trans-Pacific Partnership (TPP), which it has earlier junked as part a U.S. effort to line up countries against Beijing.

The talks are significant, especially when seen in the context of the economic performance of the two countries. The Indian economy is not exactly humming.

The government is searching the formula to stimulate growth. A study by the think tank National Council of Applied Economic Research found the Indian economy in a crisis with a slowdown in growth, rising fiscal and current account deficits amid persistent inflation. The country is also in need of massive investment, particularly to overhaul and build infrastructure.

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In contrast, the U.S. economy, helped by technology and exploration of shale gas, has begun to regain some strength after a long and deep slump. It grew 2.4 per cent in the first quarter of 2013 with two sectors - manufacturing and energy - leading the recovery.

While the discussions between the two countries would cover the "depth and breadth" of the relationship, given the interest group-afflicted foreign policy of the U.S., focus would be on market access, energy and defense that have overwhelming business overtones.

Earlier this month, a consortium of 16 U.S. business organizations asked President Obama to "use all available trade tools and diplomatic engagement" to pressure India to open its markets to U.S. exports. They were joined by lawmakers and officials accusing India of "imposing arbitrary market restrictions on medical devices and breaking or reworking patents" in pharmaceutical, IT and creative industries.

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"We're very concerned about innovation and the investment environment in India at the moment," said Mike Froman during his confirmation hearing as US Trade Representative (USTR).

India has the same complaints against the U.S. of limiting market access and flagged its concern on the immigration bill that restricts entry of the highly-skilled in non-immigrant categories. It is hoped that Khurshid would pull up his shirt sleeves and do some plain talking.

To share technology, U.S. firms want higher equity than the present 26 per cent in the sector. They say allowing higher FDI would help Indian industry in modernization and indigenization, because foreign original equipment manufacturers (OEMs) would be able to share high-end technology and invest in Indian companies.

Kerry is a believer in public diplomacy. In his video message on the eve of the visit, he said that he would "talk about our shared interest in enhancing economic integration in the region; commitment to a secure, stable and prosperous Afghanistan; and support for India's regional leadership."

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