Posted on Sat, Nov. 06, 2010
last updated: March 15, 2013 11:58:00 AM
MUMBAI — The Obama administration on Saturday announced $9.5 billion in private sector export deals with India that it said would support an estimated 54,000 jobs in the United States as President Barack Obama began a three-day visit here intended to deepen U.S.-India trade ties.
The deals include a $4.1 billion "preliminary" agreement for India to buy 10 C-17 military transport aircraft from Boeing, the purchase of 30 Boeing 737 passenger planes by an Indian airline for $2.7 billion, the sale of 107 combat jet engines to India by General Electric, valued at $800 million, and the purchase of a new electricity generating GE gas turbine that is assembled in Greenville, S.C., a deal worth $722 million and responsible for supporting nearly 3,000 jobs.
Most of the deals had been in the works for months, but the White House made them public on Saturday, the first day of Obama's three-day visit to India, to underscore what the president said should be a growing economic relationship between the United States and India, whose economy is expected to grow by 8 percent each year for the next five years.
Mindful perhaps of the drubbing Democrats took in Tuesday's election by Republicans who said Obama hadn't done enough to bring down the U.S. unemployment rate, currently 9.6 percent, the White House carefully noted the number of jobs each deal was credited with supporting — from 22,000 jobs in 44 states from the Boeing C-17 sale to the five in Maine supported by the deployment in rural India of a U.S.-built mobile telephone antenna system.
"There are many Americans whose only experience with trade and globalization has been a shuttered factory or a job that was shipped overseas," Obama told a U.S.-India Business Council summit that drew hundreds of representatives from both countries.
"Here in India, I know that many still see the arrival of American companies and products as a threat to small shopkeepers and to India's ancient and proud culture," he said.
"But these old stereotypes, these old concerns, ignore today's reality. . . it is a dynamic two way relationship that is creating jobs, growth and higher living standards in both our countries."
The White House also announced that Obama had ordered an end to limits on technology purchases by three Indian government agencies that previously had been subject to case-by-case review. The decision won't boost exports much, said Mike Froman, deputy national security advisor for economic affairs, but it will ease tensions and lead in the future to more trade deals.
"We will end up treating India similarly to other close allies and partners, rather than as a country of concern," Froman said. That change will allow the two countries "to focus on other outstanding barriers that hinder expanded bilateral high-tech trade."
In another change aimed at embracing India as an ally, the Obama administration also announced that it would support India's phased-in full membership in the world's major nonproliferation regimes, despite the fact that India has not signed the Nuclear Non-Proliferation Treaty.
The decision to support India's membership in the Nuclear Suppliers Group, among others, drew immediate criticism from some who feared the action would fuel the Indo-Pakistan nuclear arms race and weaken the international system designed to prevent the spread of nuclear weapons.
The Nuclear Suppliers Group, a 46-nation organization that seeks to control exports of sensitive dual-use technology, was formed in 1974 after India set off a nuclear blast, illegally using U.S. and Canadian technology that it had bought supposedly for civilian purposes.
Allowing India to buy technology with nuclear weapons applications through its NSG membership could encourage India's arch-rival Pakistan to "produce more nuclear material" for its arsenal, said Daryl Kimball, executive director of the Arms Control Association.
"Rather than ignoring the nuclear arms buildup in South Asia, the United States should be pursuing policies that encourage restraint." Kimball said. U.S. pressure for India's admission to the NSG also could raise tensions with other group members, especially China, which wants to sell two nuclear power plants to Pakistan, a move opposed by the United States, Kimball said.
Obama's decision "dumbs down the rules and weakens the system," Kimball said.
Froman of the NSC disagreed, however, arguing that recognizing India as a world power would strengthen the nonproliferation regime.
There was no immediate reaction from Pakistan, which views improving India-U.S. relations with suspicion, even as the U.S. works to encourage Pakistan to crack down on Taliban and al Qaida forces that have sought refuge in Pakistan's regions bordering Afghanistan.
Obama didn't discuss Pakistan-India relations on Saturday, though the tensions between the two were never far from the surface.
At the Taj Mahal Palace and Tower hotel, where Obama is staying, the president and First Lady Michelle Obama signed a guest book and placed white roses at a courtyard memorial to victims of the Nov. 26, 2008, terrorist attacks that killed more than 160 people including Americans. India blames Pakistan for the attacks.
The White House said Obama is the first foreign leader to stay there since the attacks.
In remarks at the hotel, Obama said that "in our determination to give our people a future of security and prosperity, the United States and India stand united." He also said the two democracies are working "closer than ever, sharing intelligence, preventing more attacks, and demanding that the perpetrators be brought to justice."
From there, the Obamas went to Mani Bhavan, a museum and former home to India's independence hero, Gandhi. There he signed one guest book and inspected another, where he found the signature of the Rev. Martin Luther King Jr., who'd visited in 1959.
"Pretty cool," Obama said.
But the bulk of the day was spent encouraging U.S. and Indian business leaders to find ways to turn India's 1.2 billion people into a market that can help the American economy rebuild over the long term after a deeply damaging recession.
Obama participated in roundtable with entrepreneurs and a meeting with CEOs before addressing the U.S.-India Business Council summit.
Obama called the pace of India's growth and rise of a middle class over the past two decades, despite the nation's massive poverty, "one of the most stunning achievements in human history" and said expanded commercial ties will "strongly benefit" both countries.
He noted that the total value of U.S. trade with India is less than trade with the Netherlands.
He defended his own past anti-outsourcing remarks, saying that "I make no apologies about doing whatever it takes to encourage job creation and business investment in America" but "I still work to make sure our efforts don't unfairly target companies and workers from this nation or any nation."
In the past eight years global merchandise imports quadrupled to nearly $258 billion. The United States accounts for 6 percent of that market now.
And while U.S. merchandise exports to India are growing fast, India is just the 17th largest market for U.S. exports, at about $16 billion by the end of last year. Machinery, aircraft, electric machinery and fertilizers comprise the top U.S. export categories. U.S. services exports are now more than $10.5 billion. California, Texas, Washington, New York and Florida are the largest state exporters to India.
On Sunday, the president is expected to attend a celebration marking India's Diwali festival and hold a town-hall event with university students in Mumbai. Then he's to fly to New Delhi for more events before heading to Indonesia, South Korea and Japan, all part of a four-nation tour of Asian democracies.
(Jonathan S. Landay contributed to this report from Halifax, Nova Scotia.)
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