Monday July 10, 2023

Executive Briefings Politics & Economy: Indo US Relations

Indo-USA Relations - A new paradigm

The historical weight of a relationship, enveloped in animosity and mistrust, took over two decades to reset. The first indications of change appeared in the wake of the 1991-93 economic reforms, undertaken by India’s then prime minister PV Narasimha Rao. The American administration, perhaps with justification, assumed that India was on the verge of shedding its inward-looking policies and sought to join the international community as a free-market economy. America’s interest began to grow, as something interesting appeared to be happening out there. It was only a decade later that things really began to turn.

In the early 1960s and 1970s, specifically during the era of the Nixon administration, India was viewed in Washington as firmly allied with the Soviet Union. As a founding member of the Non-Aligned Movement, it joined a sizeable community of developing countries that claimed to follow the middle ground but, for all practical purposes, was viewed by Western nations as being in close partnership with Russia and it’s allied Eastern Bloc. India’s position was pushed perhaps by the fact that America had lent economic and military support to Pakistan during the 1965 and 1971 wars.

Subsequently, during the Vajpayee government and following the explosion of a nuclear device and the imposition of sanctions by the US that ensued, a serious engagement to resort differences really began. The discussions between India’s then foreign minister Jaswant Singh and America’s assistant secretary of state Strobe Talbott (beautifully articulated in his book ‘Engaging India’) ultimately resulted in the signing of a nuclear treaty that accepted India as a nuclear power. However, the big change took place under the presidency of George W Bush who made every effort to ensure progress on several bilateral issues. He had remarked, “often overlooked in our strategic calculations is that great land which rests at the south of Eurasia. This coming century will see democratic India’s arrival as a force in the world”. When history is written, it will clearly state, beyond any shadow of a doubt, that President Bush was perhaps the closest friend India has ever had in the White House.

President Barack Obama, a progressive left-leaning democrat, was ideologically suspicious about India during his initial days, but later reversed his stance and accepted to be the chief guest at India’s republic day celebration, the first for any American president. Mr. Obama went further by declaring India as a major defence partner, which enabled the export of technology and weapons. The Trump administration took this process further by placing India at Strategic Trade Authorisation Level 1 for technology releases, at the same position as America’s closest allies. His pivot to Asia and America’s shifting focus towards the Indo-Pacific, reactivated the Quad, a community comprising of Japan, Australia, India and US to focus on regional security.

However, the biggest change in Indo-US relations has been under the prime ministership of Narendra Modi. If things go according to plan, these relations may be the defining partnership of the 21^st century. Joe Biden, in a previous incarnation as the chairman of the Senate’s foreign relations committee in 2006, had declared, “My dream is that in 2020 the two closest nations in the world will be India and the USA. If this occurs the world will be safer.” As things transpired, and luck would have it, Mr Biden is now the President of America and seems to have stuck to his earlier instincts. Mr Modi’s recent State visit to the US involved several game-changing agreements. He was hosted by President Biden at a state banquet at the White House and invited to address a joint session of Congress. This is an honour rarely offered to visiting heads of state, which very few people of the likes of Winston Churchill and Nelson Mandela, have received. In the polarised atmosphere that exists in America today, there are only two issues that both houses of US Congress can agree upon. One of them is the partnership with India. The other is in their dealings with China.

There are five key drivers to Indo-US relations. Most significant among them is India’s powerful diaspora, comprising strong lobbies with influence and wealth. Several Indian-Americans now hold critical positions in the administration and Congress, and head some of America’s largest corporations. Mr Modi has shrewdly exploited this to India’s advantage. The ability to lobby Congress and seek its support in amending legislation that could serve as an impediment, for instance towards the export of sophisticated technology or the supply of the latest weapons, can hinder the efforts of the administration to take relationships forward. In India’s case, both Congress and the White House appear to be closely aligned.

Second, India’s rising economic clout and the fact that it is one of the world’s largest economies is a reality hard to ignore. By 2030, India will be the world’s third-largest economy and contribute to around 15-20% of global growth. It will create new market opportunities each year that will be larger than that of Germany, Japan and the United Kingdom put together. As China’s growth begins to plateau and as Western democracies begin to age, growth will only stem out of emerging markets and India is highly placed in this pecking order. Third, several multinational corporations are now understandably wary of China and have started shifting their focus towards other markets. For instance, Apple now makes 10% of its phones in India. As Tim Cook its CEO appropriately observed, “The dynamism in the market, the vibrancy is unbelievable. India is at a tipping point”. Moreover, global supply chains that are currently China-dependent, are being de-risked with several companies scouting for competitive manufacturing destinations. India provides a possibility. Fourth, from the view of the American-led Western alliance, India is indispensable towards military stability within the Indo-Pacific. The American-led effort to counter China’s assertiveness, is perceived in Washington as possible only with India firmly on its side. India’s partnership is consequently considered essential to retain Western influence in Asia, to prevent the rise of the Russia-China axis. Finally, Mr Modi’s domestic popularity rating at 87%, brings with it the credibility of leadership of the world’s largest democracy. Domestic standing plays an important role in global geopolitics.

Several initiatives provide platforms for engagement in further strengthening the bilateral deal. Amongst them is India’s membership of the Quad, a sort of security alliance that encompasses the US, Japan, Australia and India. Its members conduct regular maritime drills in the Indian Ocean, in sensitive waters including the straits of Malacca. Second, the Clean Energy Agenda Partnership 2030, an engagement between India and the US, seeks to mobilise finance, accelerate clean energy deployment, innovative technologies and build capacities to address climate-related risks. Third, the Indo-US Initiative on Critical Technology, represents a significant step towards participation in the field of advanced technology, artificial intelligence, quantum computers and 6G communications. It also includes sensitive industries such as space, defence, semiconductors, rare-earth metals and advanced materials. Finally, I2U2 is a four-nation pact including UAE, Israel, USA and India. This is basically about projects that would enhance infrastructure and connectivity in the Gulf region.

However, topping everything is a bilateral focus on a defence partnership. America’s single most important offer, in recent times, is a roadmap for defence industrial cooperation covering technologies in areas such as air combat, armoured vehicles and ISR (intelligence, surveillance and reconnaissance). Through one plank of this platform India is expected to manufacture under licence General Electric’s F414 jet engines, which are used in the F18 Super Hornet and the Swedish Saab JAS 39 Gripen. More recently India’s faith in Russia has ebbed, following its proximity to China. Besides, sanctions on Russia have made the supply of military hardware spares increasingly difficult. This places India in a quandary as the bulk of its defence hardware is of Russian origin, a legacy of the past.

So where does India stand in the context of its stated foreign policy? Is it truly a partner in the Western alliance or simply accepting America’s outreach as an economic opportunity? This is the question that strategic analysts are beginning to ask. The way India sees the world is through an explicit commitment to multi-polarity and not a cold war-style duality. This involves engagement with multiple partners, albeit at varying extents. Consequently, relations with Russia will continue although at levels different to what they might have historically been.

India’s foreign minister, Dr S Jaishankar, has been explicit in his observations that India’s foreign policy will be based entirely on strategic Indian interests. As a former British prime minister, Lord Palmerston, so aptly put it – in international affairs nations have no permanent friends, or permanent enemies, only permanent interests. India’s foreign office seems to follow this mantra. The import of oil from Russia, against the wishes of European democracies, or indeed, the acquisition of long-range missiles from Russia, despite American misgivings, are clear examples of this principle. What is remarkable, however, is the fact that, despite demonstrating an independent line and avoiding explicit choices, India has managed to keep the Americans on its side. This has happened because New Delhi has convincingly explained that in the final count, the interests of the US and India converge on more fronts than they differ. Fortunately, the perceived indispensability of the Indian partnership, from Washington’s point of view, is so paramount that differences in certain areas may be allowed to be overlooked.

The real shift in international affairs has been from taking the moral high ground (of the Nehruvian days) to a more realistic position in self-interest. India’s economic rise has brought it to the centre of global affairs. Consequently, whilst New Delhi will pursue a strategy of slacker multipolar alliances, its partnership with America can, going forward, become the defining approach.