US-India Relations at the Crossroads

By Vinay Kaura

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Can the growing U.S.-India partnership survive ‘America First’?

U.S. Secretary of State Mike Pompeo is scheduled to visit New Delhi this week to prepare the ground for a meeting between Prime Minister Narendra Modi and President Donald Trump on the sidelines of the G-20 meeting on June 29 in Osaka. S. Jaishankar, India’s new foreign minister, must convince Pompeo that the unnecessarily hard-line trade policies of the Trump administration will only cloud the geopolitical promise of a closer strategic alignment between India and the United States.

It is time to redefine the parameters of Indo-American ties. Pompeo needs to be told unambiguously that if trade tensions are allowed to persist, the very foundation of Indo-U.S. strategic partnership will be called into question. It is not in Washington’s interests for trade frictions to powerfully drive India’s domestic political debates in policymaking toward the United States.

Modi has begun his second term as prime minister at a moment when the Trump administration’s unilateralist impulses are uncontrollable. As Trump’s campaign for the U.S. presidential election next year is likely to be more muscular and nationalistic than Modi’s campaign this year, India’s relationship with the United States is at a crossroads. Despite plenty of positive momentum, many sticky issues threaten future progress in Indo-U.S. relations.

On the positive side, ties between India and the United States have seen considerable improvement in the last two decades with a convergence of views on many issues. Successive presidents from Bill Clinton through Donald Trump have ensured that the project of deepening ties between the India and the U.S. remains on track. Immediately after assuming the presidency, Trump began to woo Modi, who lost no time in carving out a personal relationship with him. The Trump administration made India eligible for defense-related technologies under a “strategic trade authorization,” going a step further than the Obama administration, which had designated India as a “major defense partner.”

The term “Indo-Pacific region” has now replaced the term “Asia-Pacific region” in the American diplomatic lexicon. The Trump administration has consistently described India as one of its major allies in the Indo-Pacific region; it renamed the former U.S. Pacific Command as Indo-Pacific Command, emphasizing the strategic linkage between the Indian and Pacific Oceans. There is greater clarity now that the arc of authoritarian resilience threatening both India and the U.S. is no longer localized to the Asian landmass but can potentially stretch from the Pacific Ocean to the Indian Ocean. The democratic voices in territories falling between these vast oceans are calling for the creation of new security architecture premised on international law.

There has been a growing realization in Washington that closer ties with India can help the United States become stronger once again in Asia, where China has begun to flex its military muscles. On the other hand, India feels constrained in its options due to China’s growing global footprints. As New Delhi is trying hard to make its presence felt at the international level with enhanced engagements, China’s reluctance to acknowledge India’s global rise is having a negative impact on India’s engagement in its immediate neighborhood. India seeks to ameliorate many of its strategic challenges by deepening ties with the United States.

Modi’s previous tenure witnessed a series of defense-related agreements that would enable the two countries’ militaries to work closer together. Continuing the momentum, the Modi government would like the U.S. to help India add more teeth to its military capabilities. This is particularly important for India to become a net provider of security in the Indo-Pacific region.

The Basic Exchange and Cooperation Agreement (BESA), the last of the three “foundational agreements,” is likely to be signed soon. The Logistics Exchange Memorandum of Agreement (LEMOA), which allows the Indian and American forces to use each other’s facilities, was signed in 2016. The Communications Compatibility and Security Agreement (COMCASA), which allows the United States to transfer communication equipment to India for the secure transmission of data and real-time information, was signed during the inaugural “two-plus-two” talks in 2018.

American concerns about Chinese President Xi Jinping’s most ambitious geopolitical project, the Belt and Road initiative (BRI), have found echoes in New Delhi, which views the initiative as undermining India’s security interests. India and the U.S. seem determined to counter China’s maritime expansion, which is seen as a threat to their trade routes in the Indian and Pacific Oceans. Beijing is increasingly using the carrot and stick policy for increasing its geopolitical influence in countries in South Asia and the Indian Ocean region.

It is expected that at the end of this year India and the United States will conduct a new bilateral triservices exercise, which was announced at two-plus-two dialogue. Last month, two Indian naval ships – INS Kolkataand INS Shakti – participated in a joint naval exercise with the United States, the Philippines, and Japan. This significant naval event has been viewed as India offering support to the Philippines in its claims over disputed parts of South China Sea.

The Quadrilateral grouping, uniting India, the U.S., Australia, and Japan, has been revived with meetings being held at regular intervals. The Trump administration has been more vocal than previous administrations when it comes to U.S. support for New Delhi’s fight against terrorism. The listing of Jaish-e-Mohammed leader Masood Azhar as an international terrorist by the UN is an example of uncritical American support to India. The Trump administration has also thrown its weight behind the International Monetary Fund (IMF) to reinforce the Financial Action Task Force (FATF) demands on Pakistan. Recently, the White House has made it clear to Islamabad that the onus for regional peace is on Pakistan, which should take irreversible steps to shut down terrorist groups. In other words, American views on Pakistan seem a lot closer to India’s thinking, and this is an achievement.

Therefore Modi finds it far easier to deepen ties with the United States as support for closer ties with America has grown among India’s strategic elite. He has been remarkably successful in projecting a strong image of India, putting New Delhi in a leading position to play a larger role on the international stage. Following his tremendous electoral victory, Modi will find more maneuvering space to resist Chinese assertiveness while deepening ties with Washington. But it does not mean that the relationship is free of frictions, as rhetorical ambition and practical constraint are two different things. Despite an unmistakably positive turn in Indo-U.S. relations, Modi will find that the United States is mounting pressure on India on multiple flanks.

India cannot ensure its global rise without a stable global economic order, but Trump’s America is challenging the basic foundations of economic globalization. The U.S.-China trade and technology conflict is rising, with huge consequences for a global economy already under stress from several directions. Washington seems to relish bullying traditional American allies, as has become a norm in its foreign policy conduct during the last few years.

The Trump administration’s extremely thoughtless approach toward its allies by degrading the strategic value of NATO, threatening to impose tariffs on the European Union goods in connection with trade disputes, unilateral withdrawal from the Iran nuclear deal against European consensus, and raising doubts about America’s commitment to Japan and South Korea are just a few visible examples of the senseless application of “America first” policy. With Washington flexing its economic muscles, India has begun to face heat.

New Delhi has been forced to stop concessional oil imports from both Iran and Venezuela, and these heavy-handed American tactics have led to sharp rise in India’s oil import bill. India’s energy security requires a stable Middle East and New Delhi cannot be expected to downgrade its profile in the region. But more that, the U.S. attempts to undercut India’s strategic ties with Iran are going to pose serious challenges for Indian foreign policy. The common concerns of India and Iran about threat of jihadist terrorism emanating from Pakistani territory make Iran an important geopolitical partner of India.

India’s attempts to reach Central Asia are also likely to suffer if New Delhi’s ties with Tehran show downward trend. So far, the United States has exempted the Iranian port of Chabahar – which lets India bypass Pakistan to create a transportation corridor to Afghanistan – from punitive sanctions, but many in India remain deeply suspicious of America’s future intentions. If Chabahar port stops receiving preferential treatment, it would be a classic case of short-term American unilateralism trumping long-term strategic thinking.

The United States has also been critical of India’s bid to purchase the Russian made S-400 air defense system. Washington argues that if India buys the S-400, it will violate the Countering America’s Adversaries Through Sanctions Act (CAATSA); America’s ties with Turkey are also under strain as the latter is planning to buy the same S-400 system. Former US Defense Secretary James Mattis was the biggest advocate for a presidential waiver for India, but his absence from the Trump administration has made the threat of CAATSA sanctions a real possibility. The biggest challenge New Delhi faces is that if it defies American diktat, there would be economic sanctions as well as restrictions on high-tech defense cooperation with Washington. But if India cancels the S-400 deal, its traditional ties with Russia are bound to suffer.

Trade ties are also a source of tensions. India has been a huge beneficiary of the Generalized System of Preferences (GSP) program, but the Trump administration is moving ahead to end it. The GSP is a preferential trade program that gives developing countries like India easier access to the American market by reducing duties on their exports. Meeting many American trade demands on medical devices is not possible without having a deleterious impact. Washington also wants India to relax e-commerce rules. Many rounds of talks on a comprehensive trade package have failed to yield any breakthrough.

So far, the strength of Indo-U.S. strategic relationship has allowed overall ties to endure the jolts on the commercial side. But America’s provocative and unilateral actions in the economic sphere will only exacerbate the Modi government’s challenges in balancing India’s multifaceted relationships with Iran and Russia. If the thinking in Washington is that these actions would force India to become more closely aligned with American position, then it is an essentially faulty way to breathe a fresh life into the Pax Americana. Every time Trump takes a strictly transactional approach to India, bilateral ties will come under strain, and the differences between Washington and New Delhi will then appear too large and the need for a common approach too weak. It therefore needs no further elaboration that the role of Iran and Russia in the Indo-U.S. bilateral dynamics needs to be addressed urgently.

Perhaps most importantly, the real danger is that if the Trump administration does not soften its quarrelsome trade attitude toward India, it may end up projecting an image of America as unreliable and insensitive. Hyper-nationalism and a combative approach has fundamentally defined the motivational structure of Modi’s foreign policy. Therefore America’s narrowly-conceived actions may revive the dormant tendency in India’s diplomatic establishment for the vigorous pursuit of “strategic autonomy.”

If a more coherent response to the BRI in the form of multiple infrastructure initiatives is to emerge in near future, the United States cannot continue to behave like an arrogant, nonchalant, and unilateral actor. It is tempting to suggest that the U.S. should offer incentives and rewards to India rather than continue to make demands, if it is really serious about reversing China’s economic and strategic onslaught.

The Indo-U.S. ties have gathered momentum fuelled by strategic realities and political convergence. Strategic dialogues and military exercises between the two have become more sophisticated and elaborate. Therefore, leaders on both sides need to chart out a pragmatic vision of what is achievable over the next half decade, with concrete steps along the way. The interlocutors of the Modi government must convincingly argue before Pompeo that a long-term American commitment to India in the Indo-Pacific region is the only way to operationalize the vast potential in Indo-U.S. strategic relationship into concrete policy outcomes while preparing India as a credible counterweight to the Chinese power in Asia.