US Congress report upbeat on ‘pro-business’ Modi

A strong India under the leadership of Prime Minister Narendra Modi is in the US’ long-term interest, as the new pro-business government promises “a fresh engagement” with the US, says a US Congressional report.

According to the latest report prepared by the Congress Research Service, the top American leadership including US President Barack Obama, are enthusiastic to impart a fresh impetus to relations with the world’s largest democracy.

“Prime Minister Modi is known as an able administrator, having overseen impressive economic development in 15 years as chief minister of India’s Gujarat state,” says author K. Alan Kronstadt, Specialist in South Asian Affairs, at the Congressional Research Service (CRS).

The report comes ahead of Mr Modi’s much- awaited visit to the US in September and his first meeting with President Obama. With multifarious bilateral issues, including improving trade and investment flows, security and defence cooperation, and possibilities of strengthening geopolitical collaboration, on the table, the visit promises to be a blockbuster diplomatic show.

The CRS is an independent research wing of the Congress which prepares reports for US lawmakers to help them make informed decisions.

The report “India’s New Government and Implications for US Interests”, refers to Modi as pro-trade and pro-business, adding, “the new Indian leader is known as a strong-willed and effective, if perhaps autocratic, administrator. His reputation has been burnished by Gujarat’s impressive economic performance during his 15-year tenure the state accounts for more than 20 per cent of all Indian exports while being home to only five per cent of the population.”

“Garnering an outright majority in Parliament for the first time in 30 years, Modi’s new government promises fresh US engagement with an Indian leader reputed to be more pro-trade and pro-business than the socialist-oriented ones of the past, and who vows to implement a more assertive Indian foreign policy that could see the country shift away from its traditional “non-alignment” approach to global politics,” said the report.

However, the report expressed apprehensions over Modi’s ability to fulfil the promises of economic reform given the “significant restraints” presented by India’s federal system, resistance to fiscal stimulus during a period of high deficits, and by the lack of numbers in the Rajya Sabha — Parliament’s upper chamber.

The report also underplayed the role of Hindu nationalism in Modi’s decisive victory in parliamentary election in May; it focused instead on his promise of improved and incorrupt governance, repaired economy and development.

According to the report, New Delhi’s future economic and security policies are set to benefit the US in the long term. During their recent visit to India, both US Secretary of State John Kerry and US Secretary of Defence Chuck Hagel spoke eloquently about the potential to make India and the US “indispensable partners in 21st century.”

“Modi is widely viewed in Washington as being good for business, especially through efforts to create a more stable and tax-friendly investment climate,” added the report.

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