By Kanwal Sibal
24 Sep , 2015
The pro-US lobby in India prefers to see in Prime Minister Modi’s move to invite President Obama an inclination to strategically lean towards the US, shed “strategic autonomy” and end the phase of missed opportunities with the US that marked Manmohan Singh’s second term. This could be misconstruing the significance of Modi’s move, which may well be to strengthen our strategic autonomy by engaging with all countries to maximum potential, opening up opportunities in all directions and separating the economic from the political as much as possible. Modi may not be thinking of taking sides but working with all sides pragmatically. At the end of the day, India and the US have to find common ground to protect their respective interests. Dealing with the US will always test our diplomacy.
Our interests have actually not been served by US policies in West Asia and towards Pakistan…
The remarkable improvement in our relations with the US has been the most significant development in India’s external relations in the last decade. We have suffered from US sanctions in the nuclear, missile and high technology sectors ever since the nuclear test in 1974. US policies in our neighbourhood, in particular with regard to Pakistan, have been seriously damaging to our security. In this background, the shift towards growing mutual confidence, wide ranging political, economic and security related engagement in recent years has been unprecedented.
During his visit to India in 2010, President Obama described the India-US relationship as a defining one for the 21st century. What “defining” may actually mean is difficult to define. It could mean that the US sees India growing into a major global power in the years ahead, and believes that the relationship forged between the oldest and the largest democracy, between the world’s largest and the third largest economy in time, could define how international relations will be played out in the 21st century. This sounds rather grandiloquent, but then such rhetoric comes easily to the Americans.
India has been more reticent in its rhetoric because even if the general sentiment towards the US has become more positive, there is still political reluctance to be seen drawing too close to it. India is sensitive to any perception domestically and externally about losing the independence of its foreign policy if it embraces the US too tightly. But India too has used vocabulary about relations with the US that is not justified by realities. We have said that India and the US are “natural partners”, when objectively this is not the case. Democracy and pluralism has not shielded us from punitive US policies. The US has targeted us in the 1990s on human rights issues, especially relating to Kashmir, and remains censorious on issues of treatment of religious minorities and religious conversion in deference to its own Christian lobbies. It is worthwhile remembering that it denied Narendra Modi a visa for the US for nine years under an act of which he was the only victim.
The US has committed itself to support India’s membership of the four technology control regimes…
A natural partnership would also imply that there is a basic convergence in policy goals. Our interests have actually not been served by US policies in West Asia and towards Pakistan, its support for jihad to fight the Soviet Union which has ended in spawning extremism and terrorism in our region, its ambivalence towards the Taliban and its handling of Afghanistan. Its views on China’s policies in South Asia, especially China’s relationship with Pakistan that has so seriously damaged our security, have not been congenial to our interests.
In fact, India and the US have had to overcome a difficult legacy. The US has done the greatest damage over the longest period to India’s strategic interests by curbing our efforts to develop nuclear and missile technologies and denying us dual use technologies by imposing global sanctions bilaterally and internationally through export control regimes. It has politically undermined India’s sovereignty over J&K by frequently intervening on Pakistan’s behalf, though less so publicly in recent years. It has, in the past, armed Pakistan in full awareness of the security implications for India and continues to do so now. It has also been responsible for unleashing jihadi terrorism in our region by legitimising extremist groups and their ideology in the fight against the Soviets in Afghanistan. It has been unduly tolerant of Pakistan’s use of these terrorist groups against us as an instrument of state policy. Even now, despite the shelter given to Osama bin Laden by Pakistan, the support given by it to Afghan Taliban groups targeting US/NATO troops in Afghanistan, the US has given primacy to its own concerns about an orderly, Pakistan-assisted withdrawal from Afghanistan and has treated regional and Indian concerns as secondary.
The US decision to open a dialogue with the Taliban without insisting on the red lines laid down by the international community creates potential problems for India. It continues its failed policy of offering carrots to Pakistan, including military aid, in the hope of buying its co-operation. The manner in which Pakistan Army Chief General Sharif has been feted during his lengthy visit to the US in December 2014 suggests that the US has not been able to forge a clear policy of dealing with an increasingly radicalised country whose duplicitous conduct it recognises. Secretary Kerry went to the extent of calling the Pakistan military a binding force when he met the General, which suggests that the US has little faith in Pakistani democracy and endorses the political role that the Pakistan military sees for itself in the country.
India is sensitive to any perception domestically and externally about losing the independence of its foreign policy…
Notwithstanding all these negative elements, it is necessary for India to have as friendly a relationship with the US as possible. The US cannot be ignored because of its superpower status. The 2005 India-US nuclear deal opened the doors for establishing a relationship at a much higher level than ever. With the dissipation of strategic distrust as a result of the deal, the range of bilateral engagement has expanded phenomenally. As many as 28 sectoral and subject specific dialogues have been set up with the US, covering the areas of energy, education, health, development, science and technology, trade, defence, counter-terrorism, non-proliferation, high technology, innovation and the like. With no other country do we have such wide ranging institutionalised dialogues.
The nuclear deal removed the distorting impact of the nonproliferation issue from our bilateral agenda with the US and other important members of the international community. The US has committed itself to support India’s membership of the four technology control regimes: the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement and the Australia Group. This support is repeated in political declarations, as was the case when Prime Minister Modi visited Washington in September 2014, when President Obama noted that India met MTCR requirements and was ready for NSG membership, without, however, setting any time-tables. India’s task will be to prod the US to implement its strategic commitment at the earliest and not use it as a bargaining lever to extract more concessions in non-proliferation areas and to obtain commercial contracts for its companies on their terms. The US is miffed that having done the heavy-lifting for India in the NSG, its companies have not procured civil nuclear projects in India because of our Nuclear Liability Act which provides for supplier’s liability in certain circumstances. The US has openly lobbied for an amendment of our law, and could well link its active support for India’s membership of the NSG to the amendment it seeks. During each high level visit after the nuclear deal, this issue has been raised by the US and India has been obliged to show some “progress” in implementing its commitment to acquire GE and Westinghouse nuclear reactors for producing 10,000 MWs of power in two sites reserved for these companies.
During President Obama’s second term India-US ties began to lose momentum, disappointing those on both sides who had expected much more to emerge from the newly minted relationship of strategic trust. On the US side, apart from disappointment on the nuclear power front, there were strong hopes of the US obtaining a sizeable part of India’s defence procurement pie. That the US has bagged almost $ 9 billion worth of defence contracts in the last five to six years, whether for C-130 and C-17 heavy lift aircraft, advanced maritime reconnaissance aircraft, attack, heavy lift and VIP helicopters, and in that period became India’s top defence supplier, is not seen as sufficient strategic reward for the reversal of US nuclear policies towards India.
During President Obama’s second term India-US ties began to lose momentum, disappointing those on both sides who had expected much more…
The UPA government baulked at signing the three foundational agreements with the US- the LSA, alogistics agreement, BECA for access to high defence technology and CISMOA, an interoperability agreement that would supposedly make India more eligible for transfer of advanced defence technologies. Its concern was to avoid being seen as moving too far into the US defence orbit, as that would cause an imbalance in its relationships with other powers, but this reticence has been balanced by numerous joint military exercises.
The naval exercises in the Indian Ocean area have been particularly elaborate, involving submarines and aircraft carriers, which sends an important strategic message as these waters are crucial for the trade and energy flows of China and other East Asian and Southeast Asian countries. Under the Defence Trade and Technology Initiative (DTTI), the US has offered to co-develop and co-produce some ten defence items in collaboration with Indian partners, including the Javelin anti-tank missiles. The Indian response has not been particularly enthusiastic, with the BJP government rejecting the Javelin programme for price escalation reasons and choosing an Israeli missile instead. The US is still hoping to make progress on the DTII.
US specialists, as well as some Indian ones, have also explained the diminution of White House’s interest in India because of her reluctance to solidify a strategic partnership with the US and cling instead to a renewed version of nonalignment represented by the concept of strategic autonomy. While US leaders officially express understanding of India’s desire to preserve its strategic autonomy and do not expect India to choose sides, at unofficial levels India has been accused of fence sitting, of being a free-loader on security provided by others, of not wanting to assume responsibility as a growing power for upholding the global system. The dialogue on global commons- air, space, sea and cyber- is intended to steer India towards burden-sharing and to ensure that, as far as possible, as India rises and seeks a change in the international rules defined by the West so far, it does so in close concert with the US so that any disruptive initiatives can be forestalled or controlled.
At unofficial levels, India has been accused of fence sitting, of being a free-loader on security provided by others…
In the maritime domain, freedom of navigation and securing the Sea Lanes of Communication are areas of particular interest in partnering India, given India’s dominating position in the Indian Ocean Region and the steady expansion of its naval power. With cyber security becoming a major international concern, India’s emergence as a major IT power and the vast expansion of its telecommunication network makes it a choice partner to develop new rules of the game with as much consensus as possible, including on the contentious issue of internet governance.
India has been cautious about the US pivot towards Asia as its capacity and willingness to curtail the expansion of Chinese power is doubted, not the least because of the huge financial and commercial interdependence that has been forged between the two countries. India has its own reasons to seek stable and economically productive relations with China and wants to avoid the risk of being manipulated by the US to serve the latter’s China strategy that appears uncertain even to US allies in Asia. China is acutely sensitive about what it sees is a US bid to co-opt India in its policy of containing China. While this should not deter India from forging strategic ties with the US to the extent it serves its interests, there has been reluctance under the previous government to provoke China by veering too much towards the US. Under the Modi government, however, India, while opening up to China, is also less inhibited about sending strategic signals to it aimed at restraining its conduct. India has decided to “Act East”, to strengthen strategic ties with Japan, Australia and Vietnam, conduct more military exercises bilaterally with the US armed forces and trilaterally with Japan in naval exercises.
The last decade has seen a significant expansion of India-US economic ties, with total exchanges, including investment, amounting to almost $100 billion, making the US India’s largest economic partner as a single country. Vice-President Biden, during his July 2014 visit to India, envisioned $500 billion of bilateral trade if the “right choices” were made. The US seeks further economic reforms in India and has, accordingly, welcomed relaxation in FDI norms in sectors such as telecom, defence and insurance.
China is acutely sensitive about what it sees is a US bid to co-opt India in its policy of containing China…
However, the political drift in India-US relations has been accompanied by the deterioration of the business atmosphere in economic ties. Elements of the US corporate sector, that in the past have been a driving force in improving overall ties between the two countries, have led a campaign in the US Congress against India’s trade, investment and IPR policies, prompting a year-long investigation into these policies by the US International Trade Commission. In addition, the US Trade Representative (USTR) began an investigation of India’s IPR policies under Section 301 of the US Trade Act. Issues of Preferential Market Access in the telecom and solar sectors seen as protectionist, complaints about the application of our patent laws which we see as TRIPS compliant, and retrospective application of our tax laws, have pitted some giant corporations against us. On our side, we have problems with US restrictions on movement of personnel from India to the US in the IT sector, the increased costs of H1B and L1 visas that are financially burdensome for this sector, the campaign in the US against outsourcing, our own concerns about US protectionism and market access for some of our products, as well as the unresolved issue of the equalisation agreement. On all this we do not receive a sympathetic US response, and are unlikely to get it.
Prime Minister Modi chose to accept President Obama’s invitation to visit Washington in September 2014, indicating that he considers his personal pique at being denied a visa less important than the country’s interest, which lies in changing the dynamic of India’s relations with the US and make a revived relationship with it a crucial element of his development agenda, which includes the building of the country’s manufacturing sector.
The visit presented him with a difficult challenge. He went at a time when the mood towards India had soured because of the reasons outlined earlier, including the stand-off at the WTO on the food subsidy issue. It was not immediately clear how much the visit would achieve. The joint press briefing with Obama and the joint statement issued during the visit indicate that the results were more in the nature of establishing mechanisms to sort out problems rather than actual breakthroughs. The joint statement states that both sides “will facilitate” actions to increase trade five-fold, meaning reaching US-China trade levels, which in any realistic time-frame is most unlikely. They “pledged” to establish an Indo-US Investment Initiative and an Infrastructure Collaboration Platform to develop and finance infrastructure. It is improbable that the US will develop industrial corridors like Japan or competitively build highways, ports and airports. India has “offered” US industry lead partnership in developing three smart cities, but similar offers have also been made to Japan, Singapore and even China.
The political drift in India-US relations has been accompanied by the deterioration of the business atmosphere in economic ties…
US technology in Indian railway networks is mentioned as a possibility, but it is doubtful whether the US can compete with Japan, China, France and others in this sector. The two leaders “committed to work” through the Trade Policy Forum to promote an “attractive” business environment- without specifying what “attractive means- and to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of this Forum. These discussions have started, particularly with Obama’s visit in view. They “reaffirmed their commitment “to implement fully the U.S.-India civil nuclear cooperation agreement and establish a Contact Group to advance this. How this will be done practically is difficult to envisage at this stage, as both sides will have to find a way to work around our nuclear liability law, which may not be easy.
On IT related issues, Modi mentioned that he had sought Obama’s support “for continued openness and ease of access for Indian services companies in the US market”, without indicating Obama’s response. On the food subsidy versus trade facilitation stand off in the WTO, Modi maintained his position firmly and has been subsequently rewarded with a compromise with the US which has secured the Indian position. He welcomed “the US defence companies to participate in developing the Indian defence industry”, without mentioning any specific initiative or singling out any of the ten co-development and co-production projects offered by the US as part of the TDDI.
The reference in the joint statement to India and the US intending to expand defence cooperation to bolster national, regional and global security is strikingly bold but overambitious. If bolstering national security makes immediate sense, the reference to regional security does not, given that the US continues to give military aid to Pakistan, with the US announcing in December 2014 military aid to Pakistan amounting to $1 billion, and following it up with another package of $532 million. As regards India-US defence cooperation bolstering global security, it is not clear what is implied beyond securing the Sea Lanes of Communication in the Indian Ocean Region or anti-piracy and disaster relief operations. It was decided during Modi’s visit to renew for ten years more the 2005 Framework for US-India Defence Relations, with defence teams of the two countries directed to “develop plans” for more ambitious programmes, including enhanced technology partnerships for the Indian Navy. The last holds out interesting prospects.
The last decade has seen a significant expansion of India-US economic ties with total exchanges including investments amounting to almost $100 billion…
On geopolitical issues, Modi’s reference during the visit to the great convergence on “peace and stability in the Asia Pacific region” was significant in terms of China’s assertiveness there. That he said that the US was intrinsic to our Look East and Link West policies was a rather bold formulation geo-politically and suggested that India viewed the US as being central to its Asian policy. The joint statement speaks of a commitment to work more closely with other Asia Pacific countries, including through joint exercises, pointing implicitly at cooperation with Japan and Australia.
On the issue of terrorism and religious extremism, India and the US have rhetorical convergence and some specific cooperation on counter-terrorism issues, but, on the whole, our concerns are not adequately met because US regional interests are not fully aligned with ours. The joint statement called for the dismantling of safe havens for terrorist and criminal networks and disruption of all financial and tactical support for networks such as Al Qaeda, Lashkar-e-Taiba, Jaish-e-Mohammad, the D-company and the Haqqanis. The omission of the Taliban is striking. There is little US pressure on Pakistan to curb Hafiz Saeed, and instead of sanctions, Pakistan is being rewarded with military assistance. Not surprisingly, therefore, Pakistan is becoming more offensive in giving Hafiz Saeed more space to continue his extremist tirades, and now is dealing even with the other mastermind of the Mumbai massacre, Lakhvi, with calculated equivocation with regard to his bail, sending a clear signal to India that it is not going to seriously try those responsible for the Mumbai carnage. It is instructive that Obama felt obliged to speak to Pakistani premier Sharif to explain why while visiting India he could not visit Pakistan too.
During his Washington visit, Modi, it now appears, invited Obama to be the chief guest at our Republic Day on January 26, 2015, which the latter accepted, causing surprise that this unprecedented invitation was in the first place made and equally that it was accepted at such short notice. It is evident that Modi and Obama struck a good personal equation with Obama making the unprecedented gesture of accompanying Modi to the King Memorial. All this has certainly helped to invest Modi with political prestige as India’s man of destiny, as a “man of action” in Obama’s words. This visit and Obama’s return visit has no doubt widened India’s foreign policy space with both friends and adversaries. Even if the concrete outcomes from the Washington visit were relatively thin, the ice was broken with the US and prospects were opened up of bilateral ties regaining some of their lost momentum. This, of course, is not to minimise the difficulties that lie ahead in forging balanced and equitable ties with the US.
There is little US pressure on Pakistan to curb Hafiz Saeed, and instead of sanctions, Pakistan is being rewarded with military assistance…
The US Congress has, for instance, decided to continue the investigations of India’s investment and trade policies for another year, although the USTR has halted further action under Section 301 of the US Trade Act against India’s IPR policies. The USTR has been to India in December 2014 to hold the long delayed meeting of the Trade Policy Group and has interacted with our business organisations. It would appear from his statements that while the US is encouraged by some policy steps we contemplate, it will make a final call depending on implementation of stated policies.
The US maintains its opposition to India’s manufacturing requirements and is cautioning against extending them to the defence manufacturing sector. With the Indian government moving forward decisively on the GST, raising the FDI ceilings in the insurance sector and amending the Land Acquisition Act, the signalling to the US about economic reforms is positive before Obama’s visit. We can, however, expect further pressures on us by the US on Climate Change issues following its agreement with China, even if that non-binding agreement is hollow in substance.
With the latest accommodative signals from Washington and the new Afghan President on Pakistan’s role in Afghanistan, we will face problems as the US completes the process of removing all its troops from Afghanistan by 2016. We will continue to have differences over US policies in West Asia, even if our relations with Israel have improved vastly. US policies towards Iran have affected our energy security scenario by preventing investment by our companies in the Iranian hydrocarbon sector. While the US supports India’s permanent membership of the UN Security Council, its position has not evolved since 2010, and is unlikely to do so in the foreseeable future. On the issue of reforms of the global institutions, we will continue to face US recalcitrance.
Obama’s return visit has no doubt widened India’s foreign policy space with both friends and adversaries…
The US will expect the Obama visit to yield some visible results. The Defence Cooperation Framework Agreement will be extended for another ten years, with more ambitious content, including more military exercises. The US will want at least one joint defence manufacturing project to be announced during the visit as a start. It will be interesting to see if anything is announced on naval technologies as a follow-up to the joint statement issued during Modi’s Washington visit. Obama will not be able to give satisfaction on either the UNSC permanent membership, that of the four export control organisations or reform of global institutions.
The pro-US lobby in India prefers to see in Prime Minister Modi’s move to invite President Obama an inclination to strategically lean towards the US, shed “strategic autonomy” and end the phase of missed opportunities with the US that marked Manmohan Singh’s second term. This could be misconstruing the significance of Modi’s move, which may well be to strengthen our strategic autonomy by engaging with all countries to maximum potential, opening up opportunities in all directions and separating the economic from the political as much as possible. Modi may not be thinking of taking sides but working with all sides pragmatically. At the end of the day, India and the US have to find common ground to protect their respective interests. Dealing with the US will always test our diplomacy.
The US maintains its opposition to India’s local manufacturing requirements…
The US position on India’s permanent membership of the UN has evolved positively, indicating that the US is inclined to open the strategic space that India claims for itself. The US has also committed itself to promoting India’s membership of the existing four non-proliferation regimes.
The Iranian issue has created wrinkles in our bilateral relationship as US sanctions have interfered with India’s energy security, forcing India to reduce its oil intake from Iran quite drastically and blocking Indian investments in attractive long-term projects in the hydrocarbon sector in Iran.
The US is pushing for a Bilateral Investment Treaty. On climate change and WTO issues, India and the US have differences.
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