Obama’s energetic Indian visit

India and the United States will set up a joint research and development centre on clean energy in India, visiting US president Barack Obama and India’s prime minister Manmohan Singh announced at a joint press conference today, during Obama’s maiden trip to New Delhi. President Obama had signed a similar agreement with China last year.

With trade and specifically energy services firmly in the focus during the India leg of Obama’s four-nation Asia tour, cooperation in the fields of solar, biofuel, biogas and building-efficiency technologies are expected to increase manifold. The US will also help India search for shale oil. These areas of energy cooperation have become more important as the agreement between the two countries on civilian uses of nuclear energy is yet to become operational, and is facing a number of hurdles.

Apart from the joint clean energy research and development centre, Obama and Singh today announced the setting up of a global disease detection centre in India, and vowed to increase cooperation in weather and crop forecasting. However, there was no concrete word on any possible cooperation between the two in multilateral negotiations to combat climate change, confirming that the gulf on this issue remains as wide as before.

As expected, the role of the US, Pakistan and India in the Afghan conflict received a lot of attention when the two leaders met and in the subsequent questions at the press conference. But interestingly, before that Obama said on his own that the US and India would “deepen their consultations over east Asia”. This statement is likely to add to the speculation that the US is backing India to be a bulwark against the rise of China. But most Indian analysts, both inside and outside the government, do not pay much heed to this point of view, because China is a crucial trade partner to both the US and India.

Obama leaves India Tuesday morning for his childhood home Indonesia and then goes on to the G20 summit in Seoul, before rounding off his trip at the APEC summit in Japan. In Seoul, the monetary policy of China is likely to come under the scanner once again. Obama said in response to a question here: “We cannot have a situation where some countries have massive surpluses and will not change their currency rules,” referring once more to what is perhaps the biggest irritant in US-China relations.

Singh – who will also be at the G20 summit and is often described as the in-house economics expert among the heads of government – said “the world needs a balance between deficit and surplus countries”. The former professor of economics felt that the G20 could help the world out of recession by concentrating on energy, agriculture and infrastructure in poorer countries.

After China, India is the fastest growing investor in the US economy, so it was natural that Obama’s trip would concentrate on trade. Just hours after he landed in India’s financial capital Mumbai on Saturday, the US president announced business deals worth US$15 billion that, he said, would create 54,000 new jobs back home. The deals range widely from civilian and defence aircraft to medical imaging equipment. Indo-US bilateral trade stood at US$36.6 billion in 2009-10 and Obama hopes to double US exports in the next five years.

Barack and Michelle Obama have been on a charm offensive in India, paying homage to the victims of the November 2008 terror attack in Mumbai, dancing with school students, holding a town-hall style meeting in a Mumbai college campus and admiring medieval monuments in New Delhi, in between conferences with business leaders and the Indian political establishment.