CONFIDENTIAL

MEMO TO:  POTUSFROM:  APSNADATE: 3/17/15RE: India

Summary As a developing nation on track to become industrialized and modernized leaders, India

is rapidly increasing ties to the world energy market. For India, energy security is determined by their new relationship with the world energy market. As the demands for oil increase globally, in developing nations, India’s increased fossil fuel debt has caused it’s need to refocus its’ energy policy. These in oil prices directly affect the United States economically. On a positive note, clean energy technology has become favorable to investors who will invest in India on a case by case basis with India’s economic growth in the clean energy technology as empowered the CDM.

As a counter-weight to China and regional influence, The United States aid to help this developing nation modernize and be a key player in the region with its Middle-East and Asian neighbors, India needs the United States economic support to deter the external threats from China and the internal threats from separatist groups of the state. Because India is China’s largest economic partner in the region, the United States needs to positions itself in this bilateral economic cooperation with additional regard to the Indo –Russo relations.

For American capitalism, India shows economic promises for both nations as they develop economic investments. In terms of PPP, India is the fourth largest economy who have strict economic laws, which places American companies at a disadvantage conducting business there. India is on track for being the largest population, surpassing China. With the President’s recent visit to India, President Obama addressed the need to loosen trade laws for the benefit of strengthening economic ties between India and the United States. India is increasingly buying more exports from the United States, exceeding what China buys. It’s in the United States best interest to continue talks between all leaders to promote trade.

There is a conflict between India and Pakistan over Kashmir, mainly over a glacier and rights to fresh water. In response to Kashmir Conflict, President Obama has called for an end to the conflict enabling Pakistan to target militants and terrorist activities. President Obama approved India’s bid to the UN Security Council. The US is concerned about the growing tension between India-Pakistan-Afghanistan becoming unstable with the possibility of war with two or three United States’ allies. The United States could directly broker a deal between India and Pakistan but, but India’s government had declined Obama’s help. They believed the Kashmir citizens wanted to be a part of India overwhelmingly. The conflict represents six decades of fighting, after India won its independence from Britain. Background With India energy crisis, clean energy could be the solution. President Obama has met with the leader of India, Modi, about climate change within these talks creating an opportunity to work on India’s energy policy. While the United States down the road will have an energy

problem, the crisis will hit India sooner than later. The crisis threatens India economic future and its ability to lift its citizens out of some of the worst economic situations on Earth. India has colossal energy defiect, so it must look towards other countries for fuel. The question arise will PM Putin or President Obama help India solve its energy crisis. The United States has offered nuclear energy as an option for India. PM Modi knows he needs more energy if he is to grow the transportation and manufacturing industries in his nation. As June 2013, President Obama believes natural gas, nuclear power, clean coal as key components of U.S. efforts to good energy policy there. In India, 25% or 289 million Indians electricity is not accessible. The power sector has been is the key to India’s energy policy. The evolution of the power sector is parallel with India’s energy policy agenda of uniform national energy security and access. India had built the world’s top five largest power generators that almost tripled electricity generated. However, consumption remains at a fraction of the world average and the state run electric agency has made reforms since 1991 that haven’t seemed to work in this overpopulated nation.Options to energy crisis

Option one: CoalCoal is the most abundant source of energy in India. It represent over 4/10 tenths

of India’s energy resource. It makes nearly 7/10 of electricity in India, it has the world’s third largest coal reserves, the United States is number one and China is number two. For the next three decades, as population is set to outpace China, India will be dependent on coal. Because the United States is number one in coal, we have some of the leading technology in clean coal production. We could retrofit the pipes at the coal plants in India and provide them with current technology.

Pros: Coal is a cheap source of fuel that is abundant in India. India has many coal plants that are operational, which could be converted in the stacks to reduce harmful emissions. With the physical infrastructure mostly in place very little addition would have to be made by the United States and we would have closer ties and influence over India than our regional competitors, Russia and China. The United States could export coal to India.

Con: Coal is a finite energy source. In addition, with India’s over population crisis eventually would have to import more coal. So, while the United States could help out with the retrofits, making the coal more environmentally safe, President Obama could not justify exporting coal to another nation while we face the same problem to a lesser extent. India needs for imported oil will increase as decades go by.

Option two: Oil and gasIn post British colony, India concentrated on reacquiring authority over its oil and gas

district that were controlled by international companies from the West. The Indian government started to take control of the hydrocarbon district in the 1970s, and finished in 1981. However, it was reverse in the late 1990s.

Pros: With oil and gas, India could increase energy security that could promote a free market policy and competition within the district. India short term and long term plans could be centered on oil and gas. The district could compete in a global level.

Con: As with coal, Oil and gas are finite but they are in far lesser abundance in India. With India importing most of its oil and gas from other countries., this would be a bad policy for the president to support. In addition, the United States would not be able to export oil to India

for a variety of reasons due to the resources are not available for us to supply them on the level of need. Nevertheless, it’s not political viable to say the least.

Option three: Go Nuclear!President Obama has promoted the idea of a nuclear India. In President Obama most

recent visit to India, he has pushed India’s Prime Minister to use nuclear energy. Also, he asked President Modi to remove some of the red tape for the sale of American nuclear fuel reactors which were stopped after India used a nuclear device in 1974 and again in 1998.

Pros: India going nuclear could be very profitable for American business, which would also be good for the environment as well. In addition, by sharing nuclear technology for energy purposes, the United States could strengthen ties with India. Nuclear energy could replace coal as the primary energy source of India.

Con: India has a strict liability law that makes it hard for foreign companies to sell items such as nuclear reactors. The law gives pause to many private companies in signing agreements with India state run power agency. In addition, the Hyde act of 2006 further complicates the issue.

Option to the US aid to IndiaU.S. President Barack Obama has promised four billion dollars in American economic

aid in addition he said trade between India and United States is stalled creating untapped potential. Also, both nation leaders had agreed to structure a multi-million-dollar insurance pool that does not mandate India to modify its laws. While the exact wording of the agreement is unknown, these goals will further deepen the economic ties between India and the United States. India is among the recipients of U.S foreign assistance during President Obama time in office. Because of India’s importance to forwarding President Obama’s U.S security policy in that part of the world, the United States is finically invested in India. Even with the Kashmir and terrorism issues, United States must balance economic aid between two rivals, India and Pakistan. While U.S has support Pakistan for war against terrorism in particular ISIS and AL QUIDA, President Obama policy towards India is not only a continuation but strides for more influence in reinforcing institutions in India while supporting Pakistan’s armed forces government. In President Obama’s foreign Policy, it can clearly be seen that the Middle-East and India hold economic and military strategic value. With economic aid, the United States could support the Indian government with funds for military weapons; create a new dynamic putting China on the defense with funds for India’s infrastructure. This infrastructure would support energy and funds to help the poor, who are subject to a strict unofficial middle age caste system. All U.S investment in India has quadrupled. President Obama has three options with US aid to India.

Option one: aid to the Indian governmentThe United States President Obama could give money directly to the government in the

form of improvements to the infrastructure such as the power grid, roads for cars, and other institutions for the citizens of India. Also, United States could boost the military capability by supplementing the Indian military with better jets and upgrading their bases of operation. In addition, provide India with desalination technology to help with the water shortages and ease tension with Pakistan over Kashmir’s water supply.

Pros: by giving aid directly to the Indian government, the United States would gain a regional ally for counter-intelligence and an economic alliance to counter China. By working

economically with India, United States could influence a large portion of Indian Muslims and gain a large foothold in Asia and Middle-East.

Con: By working closely with the Indian government with money, President Obama’s administration would be tied to PM Modi‘s popularity with citizens of India. This may present a negative aspect if the PM approval was to drop dangerously low in India.

Option two: aid directly to India’s citizensThe United States has the option of giving aid directly to citizens in India. By providing

wells for clean drinking water. By the United States providing individual aid to the Indian citizens creating a sense of loyalty among the poor individually. This loyalty is a greater asset to the political climate President Obama is trying to create more so than any other. Another example, the United States could provide individual small loans to families in the amount of 200 hundred US dollars to citizens, who live outside major cities for small farms or other reasonable means of creating local businesses to give a direct economic boost to the individual families.

Pro: By giving money directly to individual citizens in India, President Obama’s administration doesn’t link itself to the ups and downs of PM Modi’s approval rating. Also, by directly giving money to individuals and families the president could influence the hearts and minds of Indians and Indian American descendants.

Con: By giving money directly to individual Indians, the United States runs the risk of being seen as imperialist with disregard to PM Modi and his regime and authority. This could be overcome by giving the credit of the idea to the Modi regime creating stability politically.

Option three: combination of option 1 and 2 The last option would be a combination of option one and option two. Obama could give

money directly the government in the form of improvements to the infrastructure such as the nuclear power technology, roads for cars, sidewalks and other institutions for the citizens of India, who are a part of the lower class. Also, United States could boost the military capability by using education to inform the citizens with water technology. At the same time, the United States could provide individual small loans to families in the amount of 200 hundred US dollars to citizens, who live outside major cities for small farms or other reasonable means for businesses to give a direct economic boost to an individual or a family.

Pros: with the combination, President Obama’s administration could create a balance of support from PM Modi’s regime and the citizens of India.

Con: The American people might think President Obama’s administration is too involved in another country internal affairs.Option to American economic investments in India In the U.S. President’s visit India, President Obama sat with PM Modi. It was before Modi’s trip to Washington. Some of the U.S.-India Business Council members were willing to invest $40 billion over a three year period. The U.S.-India coalition began to create a nuclear energy package in July 2008 when India’s regime of that time period had risked a lot in backing a nuclear energy pledge with Washington. Both economic trade and political accord moved slowly forward. For example, it appears to be a second gold rush to India version of a Silicon Valley. Boeing is United States’ biggest exporter and exclusive American defense contractor who passed over $2 billion in transactions to India. America’s biggest insurer, Allstate, publicized their plans to bank roll $1 billion in its Indian interest. Domino’s Pizza sales in India has outpaced the same sales in the United States. In President Obama’s visit, he will promote the

export of American business interests in India. The laws in India are rigid and the president’s meeting with PM Modi is where he is expected to discuss with the PM the easing of some of its international laws, if not formally request the same. For the United States, in any new market, India presents many international business people culture and legalistic problems. American products come with many taxes when compared to their local Indian counter-parts. In addition, the cash flow in India is like the American south after the American Civil War. India has twenty-nine state governments for United States economic interest. There are several options for the United States economic plans within IndiaOption one: American companies directly doing business in India

The President should and has requested PM Modi to lax the rigid laws that make it complicated and costly for American Companies to directly do business in their country. Companies would have a financial stake in a country that will eventually have the most people of any country in the world. American popularity in India is among the highest of any country.

Pro: By doing this, companies could directly show individual citizens how democracy and capitalism could improve their lives. Also, there is more money to be made with direct business, which profits could be taxed by the government, either one, if not both.

Con: By doing this, President Obama’s administration could appear to American and Indian alike as being too intrusive into Indian economy

Option two: promote American companies indirectly. Another option, President Obama could promote banks and other businesses to promote

Indian business. These businesses would be well established in India with combination of Indian and American know-how.

Pros: By doing this American companies could bypass the rigorous laws and heavy handed taxes .

Con: it would mean less profit for American business and American business could use this as tax loopholes.Option to Kashmir

Prior to President Obama taking office, former President Bush had made India a priority but the US- India alliance is threatened ,because of United States support for China and Pakistan. One of the top ten richest countries in terms of GDP, according to UN Human Development Index, rank 135 out of 187.There is a conflict between India and Pakistan over Kashmir mainly over a glacier and rights to fresh water. In response to Kashmir Conflict President Obama has called for an end to the conflict, so Pakistan can target militants and terrorist. President Obama, approved India’s bid to the UN Security Council. The US is concerned about a growing tension between India and Pakistan and Afghanistan becoming unstable and possible war with two or three United States’ allies. The United States could directly broker a deal between India and Pakistan but India’s government had declined Obama’s help, because they believed the Kashmir citizens wanted to be a part of India overwhelming. In 2009 and 2010, the conflict escalated. The conflict represents six decades of fighting, after India won its independence from Britain. In 1948, the Indian government filed a claim of hostile action from Pakistan to the UN Security Council. This brought about three resolutions, which India and Pakistan agreed upon, that those living in Kashmir should decide if they want to be a part of either country or independent. India only agreed, because they believe that most citizens would confirm them. There would summits in 1966 in Tashkent and 1972 in Simla.

More recently, the conflict was heightened in 1984, 2009 and 2010 and a summit in 1999 in Lahore. In the 1990s, Kashmir’s youth had pushed back on India’s claim to the region with guns and other weapons. As of the turn of the century, some of the Kashmir citizens have resulted to peaceful demonstration to object to India’s claiming of Kashmir. In In 2008, the land transfer to the Amaranth shrine board reaction was brutal and there was a rampage in Kashmir valley. In addition, People were concerned because of article370 .So, they protested and the CRPF Army and police forces retaliated with shooting into these crowds of protesters.

In 2009, Indian army had supposedly sexually abused five dozen plus women of wide age range, which included a young girl and her brother’s wife. In 2010, the United States’ State Department, reported that the Indian army attacks against suspected Pakistani insurgents in Kashmir. The Indian army has legal protection under (AFSPA), which protects them being criminal charged for murder or rape. The current United States policy towards India under President Obama is to strengthen ties to India, strengthen economic ties to India by Getting India PM Modi to easing trade laws and Diplomatic relations to continue with Pakistan and India. The United States has focus more on Pakistan as part of the broader US-Middle East plans. But US needs to refocus on India as a growing economic powerhouse. In addition, India and Pakistan war could affect United States Afghanistan policy. Option 1: five party talk

Support United Nation in promoting talks between Indian and Pakistani governments. Five- party talks, with US, This would include India and United States allies, Israel and France but a UN security force would be needed to stabilize the region to prevent further violence and chaos.

Pros: By supporting this plan, the union would avoid acting bilateral and have support from both respected nations allies.

Cons: It might be hard to get a concession between nationsOption two: Larger party talk

US along with EU and OPEC need to put economic pressure on India and Pakistan with China in particular applying pressure to Pakistan. By promising to increase economic aid to India and broaden their ability to get better jets, we can help come to a timely end that nations can settle with. Help the people in Kashmir in the middle of a violent water and land dispute. Increasing aid economically and militarily to India could upset the US-Pakistan relationship.

Pros: With OPEC being a large supplier to oil and EU as a buyer of India products, both nations would and organizations have an economic interest in a peaceful end to the Kashmir conflict.

Cons: At the same time, it is not entirely sure how their interest would align with United States economic plans and wellbeing of the Kashmir as chief concerns of the United States.Option three: support India military

Support a Para Commandos force or UN led military peacekeeping force. Protect Kashmir civilians until India and Pakistan is able to settle the conflict. United States intervention could have the opposite of a desired effect by causing anti-American sentiment and increase hatred and ill intent from each respected nation of India and Pakistan.US assisted military intervention, with Para Commandos, in Kashmir. Help fight insurgents and build relationship with a growing nation, with increasing buying power and could challenge China in decades to

come for all allies to United States in the region. Protect civilians and stabilize the region through force Increase anti-Americanism that is directly linked to the Kashmir Conflict.

Pros: By supporting the Para Commandos, you have a trained military, who know their surroundings and can infiltrate terrorist group and it would be a military with a favorable of the United States.

Cons: Close ties to the India military could complicate relationship with Pakistan because of their claim to the Kashmir region.

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