Elected for a second 4-year term as President of the United States of America, Democrat Party’s Barack Obama has a long To-Do List in front of him. The good part about his situation is that President Obama can bring in more reforms, and try and galvanize the American economy without having to worry about running for the White House again (American Presidents are allowed a maximum of two terms). He can choose to be the peacemaker once more, an area of work and close-to-the-heart philosophy that had earned him the Nobel Prize for Peace in 2009. President Obama will also be interested in making huge cuts in war expenditures and infusing some of the “savings” thus made into the immediate growth areas of the American economy, in creating more jobs, allowing more entrepreneurs to flourish and prosper. He will also be keen to take some of the burden off the state exchequer which in the last four years has been repeatedly called upon to bail out large private sector employers that have rolled back jobs due to an economy in recession.

As for the Indian angle, it’s a two way street really. Most Indians in America have voted for the Democrats, given that the Republican mindset can sometimes be seen as not-so-favourable towards immigrants from the subcontinent. Old school Republican philosophy built on deep Anglo-Saxon values can sometimes be seen as targeting Asians (and other immigrant groups such as the ones from Latin and Central America) and with them the pricey jobs that many Asians hold across corporate establishments in the United States. On the other side, India itself may have benefited more from a Republican Government in the past, when outsourcing of jobs to India by American firms was not such a hugely debated issue within the USA. Overall, though, the world, including India, would any day welcome President Obama the peacemaker over any other jingoistic leader, given that today’s war economies are causing great financial hardship and emotional distress to several nations around the planet.

By Sayantan Chakravarty

The glamour part of the American Presidential election got over with the well-crafted, intelligently-directed, engaging and inspiring victory speech delivered by President Barack Obama in Chicago’s McCormick Place Convention Center on November 7. Kings and queens, presidents and dictators, prime ministers and terrorists alike would have tuned into that speech with rapt attention. In order to catch its essence, the speech would have played over and over in hundreds of towns and cities, villages and provinces. At its conclusion, the speech exuded more than just cautious optimism on the future of the American economy—the single biggest issue going into the elections—as well as the gratefulness that President Obama felt at having been given a second chance after what was a long-drawn, bitterly contested, neck-and-neck election campaign against Republican rival Mitt Romney.


From an Indian perspective, President Obama will be looking at giving a clearer look at the Give and Take policy with India. Evidently, India and the United States have been making a move forward over the years, cutting back at the loss of confidence during the era of the Cold War. In areas such as defence procurements in India, the Libyan crisis, nuclear liability, outsourcing, allowing FDI in retail sector in India, Iranian nuclear programme, Syrian crisis, the two nations have developed some understanding on their respective positions. This has helped them successfully reduce friction and develop a mutual understanding—which is expected to improve further during President Obama’s second term.

 FAMILY MAN: With wife Michelle and daughters Malia and Sasha  President’s victory speech at the McCormick Place Convention Center

The strategic partnership saw an upward trajectory during the first Obama administration with deepening cooperation in all sectors. With Obama’s re-election, there is a need to expedite the implementation process of policy pronouncements made by both New Delhi and Washington in the last four years. This will lead to more concrete outcomes. India needs to deeply consider this evolving U.S. policy in the region and should prepare its response to successfully deal with emerging scenarios.


In his second term, U.S. President Barack Obama is likely to continue the approach he’s taken to India thus far: expanding trade, ramping up military cooperation and staying out of the India-Pakistan dispute over Kashmir.

But there will be some significant issues for the countries to sort out, such as India’s immigration concerns and U.S. worries about investment barriers.

Neither Mr. Obama or his rival, Republican candidate Mitt Romney, spelled out their views on India in detail during the 2012 campaign. The topic never came up during their debate on foreign policy. That’s partly because there is a growing consensus in Washington that having close ties with New Delhi is vital, both to open a big export market for U.S. goods and to have a strong strategic ally in Asia.

During his first term, Mr. Obama increased military and counter-terrorism cooperation between the countries. U.S. companies completed several large defense deals, including the sales of military transport planes, airlifters and long-range maritime reconnaissance aircraft, though American firms were snubbed in the sweepstakes to supply India with a new generation of fighter jets. Washington has been eager to support India as a strategic buffer against China and its ambitions in the Indian Ocean region. That’s a trend that’s unlikely to change.

Even as trade between the countries boomed, the Obama administration pushed for big-ticket economic reforms that India had been stalling for several years, including the relaxing of foreign investment rules for retail, insurance, and defense. The retail overhaul was recently enacted by the Indian government, paving the way for the entry of Wal-Mart Stores Inc. and others, while a move to liberalize the insurance sector is being considered in Parliament. In fact, Indian Prime Minister Manmohan has bent backwards to invite every hostile opposition party to have a joint discussion on the issue, rather than having the prospect of a stalled Parliament.


President Obama's re-election means he can sustain the strategic shift toward the Asia-Pacific started during his first term but the attention and resources the region gets may be hostage to instability in the Middle East and budget battles in Washington.

He is slated to attend a summit of East Asian leaders in Cambodia in November, underscoring his commitment to the region. He could also make a side-trip to Myanmar, becoming the first US president to visit that military-dominated country to reward its democratic reforms. Many Asian governments are likely to welcome Obama's victory over Republican challenger Mitt Romney.

Concerned about China's rising power and assertive behavior, they have supported the Obama administration's 'pivot' to the region as the US disentangles from the wars in Iraq and Afghanistan. Still, they also want the US to get along with China, the hub of the Asian economy. Romney's more confrontational stance, based on his threat to designate China as a currency manipulator, could have set back US-China relations and even sparked a trade war.

Romney's defeat will be greeted with quiet relief in Beijing, which wants stability in its most critical bilateral relationship as it undergoes its own leadership transition with Hi Jinping taking over the reins from Hu Jintao.

Whether Asia policy gets the kind of attention from the US as during the first term will depend partly on who succeeds secretary of state Hillary Clinton. She has made at least a dozen trips to the region and championed the view that US interests lie in more ties with that booming continent. Walter Lohman, director of Asian studies at the Heritage Foundation think tank, said China is the main long-term strategic threat for the US, but the most immediate foreign policy concern is Iran's nuclear program.


India Inc hopes that the re-election of Barack Obama as the US President will be good for relationship between the two countries. However, there are some apprehensions over the outsourcing issue. “This is a good development for India. Between two large economies there will be issues and concerns. Outsourcing is also a concern and I hope it will be addressed soon,” Godrej Group Chairman Adi Godrej told reporters on the sidelines of the World Economic Forum.

However, Bajaj Auto Chairman Rahul Bajaj had a different take. He said: “Republican nominee Mitt Romney would have been better for India as they are little bit open. Obama is more protectionist and we hope that it will change.” Bharti Group Chairman Sunil Bharti Mittal said: “It is on expected lines but there was some heat reported in the last few days. I think it will be good for India. There will be continuity.”

When asked about concerns over outsourcing he said: “I have heard this in the previous election. We saw Bill Clinton go very heavy on outsourcing and we did not see anyone of these impacting our outsourcing business or relationships.” Biocon Chairperson Kiran Mazumdar Shaw said she hopes that the “outsourcing rhetoric will die (down)”, and Obama’s re-election will be good for the Indian pharmaceutical sector.”

Industry chamber FICCI believes that Obama’s re-election sets the stage for deepening Indo-US strategic ties. “A historic second term for US President Barack Obama augurs well for the now-established Indo-US strategic and economic partnership. The strategic partnership has been nursed painstakingly by the Obama Administration and FICCI roundly applauds the stellar vision of President Obama in strengthening cooperation in higher education, defence and homeland security, agriculture and nuclear cooperation,” said FICCI President R.V. Kanoria

Echoing the same sentiment, Assocham President Rajkumar Dhoot said that the US is the largest economic partner of India and 60 per cent of India’s software exports are directed towards US. With his re-election, he felt that the untapped trade opportunities between the two countries will be tapped and US companies will hugely invest in the infrastructure development opportunities that India provides.


November 2012

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