Clinton wants to improve economic ties on India visit

Wednesday, 20 July 2011 00:00 - - {{hitsCtrl.values.hits}}

NEW DELHI (Reuters): U.S. Secretary of State Hillary Clinton hopes to cement gains in ties with emerging global power India during talks in New Delhi on Tuesday while heading off new frictions with fragile U.S. ally Pakistan.

Clinton’s two-day trip to India, her second as secretary of state, follows President Barack Obama’s visit last November and underscores Washington’s growing bonds with the world’s second most populous country and its $1.6 trillion economy.

Clinton will meet Indian leaders for a U.S.-India “strategic dialogue” session, regular meetings designed to get officials from both sides working more closely together, on a trip that begins nearly a week after a deadly triple bomb attack on financial capital Mumbai.

She will then fly to Chennai, an emerging hub for U.S. trade and investment, for what American officials bill as a major policy speech on U.S.-India relations both in the region and across the Asia-Pacific.

Clinton’s trip will emphasize economic ties between India and the United States, and regionally as a way to build confidence among India and its neighbours, Afghanistan and Pakistan, officials said.

“Priorities include, number one, trying to deepen our economic cooperation, which has been growing substantially year on year, and she’ll point out a few ways we think we can take it to the next level,” one U.S. official told reporters on Clinton’s plane.

Despite the economic focus, which will also include talks with Finance Minister Pranab Mukherjee, the pending U.S. drawdown of forces in Afghanistan and Indian relations with traditional rival Pakistan will both be on the agenda as security fears grow following Wednesday’s attacks on Mumbai.

U.S. officials and political analysts say Clinton will urge India not to raise tension, concerned that any reaction by New Delhi could upset an already fragile U.S. relationship with Islamabad.

“This is not about nudging or pushing or cajoling, it’s about encouraging and it’s also about reinforcing the steps they’re already taking,” the U.S. official said, adding that Clinton would urge India to open its doors economically to its far less robust neighbour.

“She’ll stress that focusing on the economy up front is a way to build confidence... from there, they can work up toward dealing with some of the more sensitive security issues.”

It may not be an easy sell -- although analysts say India is increasingly worried over the stability of its neighbour and has its own reasons for moving forward cautiously.