ASG Senior Director Ray Vickery on U.S./India relations in Bloomberg News

U.S. Energy Secretary Cancels India Trip Amid Diplomatic Row

Andrew MacAskill and Kartikay Mehrotra, ©2014 Bloomberg News

Published 12:08 pm, Thursday, January 9, 2014

Jan. 9 (Bloomberg) -- U.S. Energy Secretary Ernest Moniz has canceled his scheduled trip to India this month in the latest fallout from the arrest last month of an Indian diplomat in New York.

Moniz’s trip is being postponed amid the diplomatic tensions, according to two officials with knowledge of the decision who asked not to be identified. In addition, Nisha Desai Biswal, the U.S. assistant secretary of state responsible for India, last week delayed her plans to travel to the country.

The U.S. moves came as India acted to curb activities at a social club linked to the U.S. Embassy in New Delhi, part of its campaign to pressure American officials into dropping visa fraud charges against the diplomat, who is scheduled to appear in court Jan. 13. Devyani Khobragade, charged with visa fraud for underpaying her Indian babysitter, has been in “ongoing” plea talks, Preet Bharara, the U.S. attorney in Manhattan, told a federal magistrate in New York this week.

The arrest, which triggered Indian outrage when it was disclosed that Khobragade had been strip-searched by U.S. Marshals, has put a cloud over the Obama administration’s goal of strengthening U.S.-India ties. The incident sparked an uproar in India as the nation of 1.2 billion people prepares for elections in a few months.

Risking Trade

Bilateral trade in goods grew to $59.1 billion last year through November, up 57 percent from $37.6 billion for all of 2009, the first year of the Obama administration, according to data from the U.S. Census Bureau. The U.S. is the fifth-largest source of foreign direct investment into India, according to the Indian Embassy.

Raymond Vickery, who was a top U.S. trade official during the Clinton administration, said that expanding trade and investment has been “the underlying driver” in growing U.S.- India ties.

“Can they be affected if this thing continues to spiral out of control?” said Vickery, who is now senior director at the Albright Stonebridge Group in Washington. “Yes, they can be.”

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