President Obama’s visit to India this weekend comes in the wake of major losses for his party in the U.S. mid-term elections. The results—largely viewed as an indictment of Obama’s handling of the economy, record deficit spending, and health care reform—could lead the U.S. President to tread cautiously during his India visit. President Obama may be tempted to limit his message to one that focuses on India as a destination for U.S. exports and highlights U.S.–India business collaboration. While these are indeed important issues, President Obama should also emphasize the broader significance of the U.S.–India strategic partnership in strengthening democratic forces and balancing China’s rise in East Asia.

President Obama has often adopted an overly simplistic approach toward U.S.–India trade and economic ties, focusing on India as an economic competitor to the U.S. During a speech on the campaign trail in July 2008, Obama noted that “children in Raleigh and Boston” are forced to compete with “children in Bangalore and Beijing.” In August, Obama signed a law raising U.S. visa fees for foreign workers in the information technology (IT) sector—a protectionist move directed against Indian IT companies that bring high-skilled labor into the U.S.

While clamping down on outsourcing, President Obama has missed the larger story on the benefits to the U.S. economy from increased investment and trade ties between the two countries. For example, as Indian companies expand their operations in the U.S., they will create jobs for U.S. citizens and purchase U.S. equipment that will in turn generate additional economic activity. Indian software major Wipro recently hired 500 skilled U.S. workers in Atlanta, while IT service provider Tata Consultancy Services is expanding its campus outside Cincinnati to eventually employ 1,000 professionals. Likewise, when American companies invest in India, they not only create jobs there; they also build efficiencies and create export opportunities that lead to more jobs in America.

Highlight Security Ties

In addition to these economic synergies, President Obama should highlight defense and security ties, especially in light of uncertainties surrounding the rise of China and questions it has generated about the regional power balance in Asia.

Defense ties between the U.S. and India have expanded rapidly since the 2005 signing of the 10-year defense framework agreement. The two sides have held an unprecedented number of regular joint exercises across all services at increasing levels of complexity and including multilateral exercises like the Malabar naval exercise in 2009 that included Japanese participation.

Although India has traditionally relied on Russia for its military equipment needs, the civil nuclear deal has set the stage for a broader and deeper defense trade relationship between the U.S. and India. In the last two years, the two countries have signed deals worth over $3 billion to provide India with six C130-J Hercules military transport aircraft and eight P-81 maritime reconnaissance aircraft. During a recent trip to India, U.S. Under Secretary of Defense Michelle Flournoy emphasized the importance of U.S.–India maritime cooperation to ensure “maritime security and freedom of navigation and against those contesting the accepted rules of the world.”

Obama’s visit offers an opportunity to solidify additional defense deals. U.S. defense heavyweights Lockheed Martin and Boeing are both competing with French, Swedish, and Russian companies to fulfill India’s request for 126 Medium Multi-Role Combat Aircraft—a deal worth over $10 billion. Washington and New Delhi are also reportedly close to inking an agreement on the transfer of 10 C-17 Boeing transport aircraft worth close to $6 billion. The clinching of a major defense deal during the Obama visit would send a clear signal that the two sides are committed to enhancing strategic cooperation in a vital region of the world.

As part of the growing security relationship, the Obama Administration is likely to unveil new measures to relax export controls on India, a gesture that would demonstrate that the U.S. sees India as a partner, not a target, in countering global proliferation.

Another initiative President Obama should consider is incorporating India into the major nonproliferation groupings such as the Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenar. India’s membership in these groupings would serve to strengthen the global nonproliferation order. The major challenge in bringing India into these organizations is its status outside the nuclear nonproliferation treaty.

From a practical perspective, India’s inclusion in the groups would strengthen their ability to achieve the intended purpose of limiting the spread of nuclear, biological, chemical, sensitive missile, and other military technologies.

India should also do its part to facilitate growing security ties. To move the defense relationship forward, India should be prepared to sign defense cooperation agreements, like the Communications Interoperability and Security Memorandum of Agreement and Logistics Support Agreement. These agreements would increase interoperability with U.S. systems and enhance logistical cooperation.

India should also commit to upgrading its export control system, which would strengthen its case for becoming a full-fledged member of the multilateral nonproliferation groupings. India’s signing of the international Convention on Supplemental Compensation last week was a positive step in beginning to close the gap between Washington and New Delhi on the nuclear liability issue that has cast a pall over the civil nuclear deal.

Obstacles on the Counterterrorism Front

President Obama will likely face tough questions on the counterterrorism front. Recent media reports raise questions about the U.S. handling of the case of David Headley, the Pakistani-American charged with facilitating the 2008 Mumbai attacks. Headley’s wives revealed that they provided information to U.S. officials as far back as 2005 on his links to Pakistan-based terrorist group Lashkar-e-Tayyiba (LeT) and a series of suspicious trips to India. Indian officials note that the U.S. should have passed them this information on Headley earlier so they could have monitored his trips to India and potentially prevented the Mumbai attacks.

Both the Indian Home Minister and National Security Advisor have sought to downplay the Headley issue in the last few days. The U.S. has committed to reviewing its intelligence files on Headley and to debriefing India with full details on the review to reduce tensions over the case. The Headley review will be useful not only to address Indian concerns but also to tighten U.S. procedures in dealing with information related to Pakistan-based terrorist groups that are linked to international terrorism. U.S. policymakers have mistakenly tended to view India-focused terrorist groups like LeT through a different lens than al-Qaeda, despite a plethora of information showing that the groups are interlinked and often cooperate on terrorist plots.

Steering a Fresh Course

The Obama Administration’s south Asia policy has focused a tremendous amount of attention on Afghanistan and Pakistan. India, being the stable and prosperous country in the region, has posed much less of a headache for the White House and thus tended to receive less attention. The Obama Administration also squandered some goodwill with the Indians early in its tenure by raising the specter of the appointment of a Kashmir envoy to placate Pakistan. President Obama has since demonstrated a keener understanding of Indian sensitivities on the issue and is more realistic about the limits of any U.S. role in the decades-old dispute.

The President’s historic visit to India offers an opportunity to set a new course for the direction of the U.S.–India partnership—one that acknowledges India’s growing global role and the changing Asian strategic landscape that makes strong U.S.–Indian partnership imperative for stability and prosperity in the region.

Lisa Curtis is Senior Research Fellow for South Asia in the Asian Studies Center at The Heritage Foundation.