What India wants from the new president

On nuclear issues, despite the nuclear deal, India is likely to find the going tough with the Obama crowd. Some of the deal's best known critics
like Strobe Talbott and Robert Einhorn are likely to find prominent jobs in the US nuclear establishment — and their dislike of the Indian nuclear deal as well as India's nuclear weapons in general is not going to lessen. If the Bush administration sought to push for an "exception" for India, a Democrat administration is likely to do what it can to mitigate it.

Remember, despite the much touted bi-partisan support for the nuclear agreement in the US Congress, all naysayers were Democrats. Obama himself is the author of one of the biggest "killer" amendments of the Hyde Act, the Obama amendment to deny lifetime supplies of nuclear fuel to Indian reactors, and needed strong political push by Bush and Manmohan to reverse it in the 123 agreement. Obama eventually voted for the deal but there's a sour note. Therefore, getting licenses from the Nuclear Regulatory Commission wont be easy, as non-proliferation wallahs use the famed American bureaucracy to roll back the effects of the nuclear deal.

There is a strong expectation that among the non-proliferation priorities of the Obama administration would be pushing through the CTBT, if he can get his own Congress to agree. That would be another pressure point for India, particularly after Manmohan Singh has gone on record to say that India would not sign the CTBT. On the other hand, Obama supports the global disarmament initiative, started by Kissinger, Perry, Schultz and Nunn. India is a strong votary of the global disarmament efforts too and this could be a better meeting point for the two sides than CTBT. South Block is more likely to push for a full disarmament position than a test ban, which it considers to be "halfway house."

The 2008 election campaign has been relatively free of "outsourcing" as an issue, but it is clear that on principle Obama would oppose outsourcing of jobs to countries like India. But here, the battle is best left to the private sector. It may be a little simplistic to suggest that Obama is categorically against outsourcing. In his speeches, he has said he wants to readjust the tax code to offer more tax incentives to companies who do not offshore jobs, but also that he did not want to close America to the "brightest and best from round the world."

More recently, he has acknowledged the inevitability of outsourcing, saying that "evolutions in communication and technology have sent jobs wherever there's an internet connection; that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing." In fact, post financial crisis, his views are likely to soften further, as analysts suggest that outsourcing may become more necessary, to cut costs and improve productivity. But then again, he may find greater traction for his views in a weak labour market in the US.

Obama has raised the banner for "fair" trade rather than "free" trade, which has already raised eyebrows here among people who look forward to tough trade talks ahead, particularly in the unfinished Doha round. Of course much of the outsourcing is "irreversible" and the debate can safely be left to the private sector to resolve. Will Obama send out different signals on outsourcing of public sector jobs?

As a corollary, what would it mean for more professional and tech visas for Indian professionals to the US? Indian and US companies have been clamouring for more H1-B visas, but its likely that a naturally protectionist Democrat administration with their core constituency being labour unions would find it difficult to increase those numbers from present 65,000.

Then there is China. Like it or not, China and India will continue to be uttered in the same breath for a whole host of reasons. India has very uncomfortable memories of Bill Clinton in Beijing in June 1998, virtually appointing Beijing the "daroga" for South Asia.

Democrats have always viewed the US-China relationship as "special" and generally have a more welcoming view of China. This is unlikely to change particularly in a global situation where China now wields greater clout. India's foreign policy, on the other hand is increasingly going to focus on "dealing with the rise of China" and its implications for India. Whether these two world visions clash or converge need to be seen.

The next few months will tell whether the famed "transformation" of the US-India relationship will continue unabated, halted or slowed down.