MUMBAI President Barack Obama announced $10 billion in business deals on Saturday as he arrived in India to boost U.S. exports and jobs after a mauling in mid-term polls, but he ran into immediate controversy over Pakistan.
Obama flew into Mumbai, India's financial hub, and announced the United States would also relax export controls over sensitive technology, a demand of India's that will help deepen U.S. ties with the emerging global power and its trillion dollar economy.
While most of the announced deals had been pending for months, Obama's visit, the first leg of a 10-day Asian tour, has been hailed as moving the United States closer to India as Washington tries to revive a weak economy and gather support to pressure China on its currency.
"The United States sees Asia, especially India, as the market of the future," Obama told a meeting of U.S. and Indian business leaders. "There still exists a caricature of India as a land of call centers and back-offices that cost American jobs. But these old stereotypes, these old concerns, ignore today's realities."
Obama's first act was to pay tribute to victims of the 2008 Mumbai attacks, but he was criticized for making no reference to India's traditional foe Pakistan, which New Delhi blames for harboring anti-India militants.
Pakistan-based militants killed 166 people in a 60-hour rampage through India's financial hub, gunning down their victims at luxury hotels, a train station and a Jewish center. India says elements in the Pakistan state were behind the attacks.
"We visit here to send a very clear message," Obama said after meeting victims' families at the luxury sea-front Taj Mahal Palace Hotel, the iconic landmark where TV images showing it in flames after battles between militants and commandos came to symbolize the massacre.
"In our determination to give our people a future of security and prosperity, the United States and India stand united."
Saturday's Taj speech highlighted the diplomatic test for Obama. Indians want a strong statement against Pakistan for fostering militants, but Washington must tread a fine line between appeasing New Delhi and supporting U.S. regional ally Islamabad.
But Obama's trip is also about business, with China now ahead of the United States in trade with India.
The $10 billion in deals will support 54,000 jobs in the United States, White House aide Michael Froman said.
The White House also announced Obama would support India's membership of four global non-proliferation organizations, a move that will reassure New Delhi -- left out of these groups after its 1998 nuclear tests -- that Washington is recognizing its global clout.
Obama will also visit Indonesia, South Korea and Japan on the Asian tour that will see Washington push to prevent countries unilaterally devaluing currencies to protect their exports, a top theme at the Group of 20 heads of state meet in Seoul next week.
Obama flew by helicopter to the Mumbai seafront before heading to the Taj hotel. Onlookers pressed up against police barricades along the motorcade's short route.
With armed police at every road intersection, southern Mumbai was turned into a fortress with police outnumbering onlookers. Snipers kept vigil on the top of buildings along the route.
Across town, police took the precaution of removing coconuts around Mani Bhavan, where Indian independence hero Mahatma Gandhi stayed while in Mumbai and which now serves as a museum that Obama visited on Saturday.
The 2008 Mumbai attack was launched by militants who arrived by boat from Pakistan, coming ashore near the Taj. It increased tension between the nuclear foes, who have been to war three times since independence from Britain in 1947.
TV stations were abuzz with most Indian commentators surprised about the softness of Obama's Taj speech.
"This was a guarded statement," strategic analyst Mahroof Raza told the Times Now news channel. "No mention of Pakistan conveys that Pakistan is key to their (Washington's) Afghan policy ... and, therefore, Pakistan will not be brought to book."
The opposition also criticized the speech.
"Knowing fully well that Pakistan and Pakistani machinery has been used for perpetrating terror in India, by not acknowledging it he has disappointed the country as a whole," said Rajiv Pratap Rudy, spokesman for the Hindu nationalist Bharatiya Janata Party.
Obama heads to New Delhi on Sunday. His Saturday-to-Tuesday trip to India started just four days after his Democratic party sustained big election losses tied to the weak economy, raising doubts over how much the trip can yield given pressures at home.
On the agenda will be lucrative defense ties. The United States has held more military exercises with India in the past year than any other country, and U.S. firms Boeing and Lockheed Martin Corp are bidding for a $11 billion deal for 126 fighter jets.
Washington still faces a host of hurdles, including Indian worries that signing defense pacts -- which are necessary for the U.S. arms sales to go through -- may land New Delhi in a wider entanglement with the U.S. military.
Also, an increase in U.S. visa fees, a ban on offshoring by the state of Ohio and the Indian IT industry's portrayal in campaign publicity as a drain on U.S. jobs have set a frosty tone in India.
(Additional reporting by C. Bryson Hull and Nandita Bose in MUMBAI; Writing by Alistair Scrutton; Editing by Krittivas Mukherjee and Andrew Marshall)