Monday, October 13, 2014

India-US Relations – the Road Ahead

Dr Harinder Sekhon, 
Senior Fellow, VIF

The recently held Modi-Obama summit has been subjected to varied assessments both in India and the United States. Official communiqués describe the meeting as “extraordinarily successful,” one that has re-energised the strategic partnership between the two countries and set the stage for a ‘re-set’ of Indo-US relations. According to the Joint Statement, the two leaders have ‘endorsed’ the first ‘Vision Statement for the Strategic Partnership’ as a “guide to strengthen and deepen cooperation in every sector for the benefit of global stability and people’s livelihoods over the next ten years. They also reiterated their commitment to move forward together through a new mantra: ‘Chalein Saath Saath: Forward Together We Go.’

According to Phil Reiner, senior Director for India at the US National Security Council, Prime Minister Modi’s visit was “extraordinarily successful. It has provided a boost in terms of the vision and focus that we have for our bilateral relations." He further elaborated, "We’re excited to be moving forward with a re-energized strategic partnership. The US continues to strongly support a prosperous India that plays an important role in the global stage, and I think the Prime Minister's visit really provided the opportunity for the two leaders to discuss that vision that's necessary in order to set the framework under which we are going to operate going forward."

This in a nutshell sums up the importance of the Modi-Obama meeting despite a counter voice closer home where some analysts feel that the euphoria is a creation of media hype and that there has been more style and rhetoric rather than substance. India does figure high in US strategic calculus and according to Nicholas Burns, “In strategic terms, there are few countries more important to Washington than India, the dominant power in the Indian Ocean region and, with Japan, the most important U.S. partner in Asia seeking to limit Chinese assertiveness in the region.” Economically too, Indian and US interests are finding increasing convergence between the US search for investment opportunities and India’s need for foreign investments to meets its developmental goals.

This mutual dependence has turned Modi’s visit into one of the most remarkable visits by an Indian Prime Minister to the United States. PM Modi packed in a wide range of activities into a fast-paced schedule both in New York and Washington D.C. displaying great energy, oratorical skill and a remarkable flair for diplomacy that helped establish a strong connect with all the major stake holders – the Indian American community, business leaders and the US Congress. Whether it was his event at the Madison Square Garden or his stroll around the Martin Luther King Memorial in Washington D.C with President Barack Obama, all had a positive impact and there is optimism that under Modi’s decisive and pragmatic leadership, backed by a strong political mandate, India-US relations will move to a higher trajectory. The vision statement lays out a clear road map for bringing matters to fruition over the long term and in the coming months various bilateral meetings are slated to be held between stakeholders to “revitalize the existing partnership and find new areas for collaboration and mutual benefit.”

But much work remains to be done. Despite the positive synergy that the two leaders have created, there are many hurdles that linger from the past. American strategic thinkers and policy analysts see a lack of vision and commitment on both sides and while admitting that President Obama has been more preoccupied with other pressing matters, they are equally quick to remind that India would also need to “walk the talk” and take definite incremental steps to overcome the policy paralysis of the past couple of years. To India, the United States seems too transactional which leads to considerable mistrust towards its motives. This leads to utmost caution on moving the economic and strategic agenda forward, which in turn frustrates the US as this has delayed and even disrupted initiatives in the past – something that does not inspire confidence especially at a time when India is seeking US investments to revive India’s economy.

In the economic sphere, the Joint Statement observes that while US-India trade, at $100 billion, has increased five-fold since 2001, the two leaders have committed to “facilitate the actions necessary to increase trade another fivefold.” Investments in infrastructure development, clean energy and R&D – all critical to India’s developmental needs, have been listed as priority areas for joint ventures. India also aspires to emulate the US in preeminence in research and innovation, as also the manner in which it has leveraged the power of entrepreneurship to enhance the prosperity of its people. Therefore, it is in India’s interest to foster closer economic ties with the US, our second-largest trading partner and the largest customer base for the Indian software industry.

While the PM has re-ignited excitement about India amongst major US business houses and the Indian American business community, asking them to “Come, make in India,” policy makers would have to be realistic and recognize that no investments will come if a venture will not bring benefits to the investor as well. For all stake holders to gain equally from any business collaboration, there will have to be immediate structural reforms to create an amiable business environment and assure the American business community that Indian red tape would be weeded out and simpler business and tax procedures established.

Both leaders “discussed their concerns about the current impasse in the World Trade Organization (WTO) and its effect on the multilateral trading system.” Officials in both countries have been directed to hold consultations with other WTO members and find a way out of this stalemate. Since India’s recent stand at WTO has caused ‘frustration’ and ‘despondence’ in the US, India must be seen as a resolute power committed to upholding the global trading system and should find a solution that would safeguard its food security concerns without isolating it from the global trading regime. Such a settlement would benefit Indian business leaders too and they are in favour of India negotiating its inclusion into APEC, show its commitment to find a way out of the WTO impasse and look for ways to move forward on the BIT.

The fact that the D-Company and South China Sea were mentioned for the first time in the Joint statement shows greater acceptance and a meeting of minds on common threats and challenges. Both leaders “reaffirmed their deep concern over the continued threat posed by terrorism, most recently highlighted by the dangers presented by the ISIL,…and underlined the need for joint and concerted efforts …to disrupt all financial and tactical support for networks such as Al Qaeda, Lashkar-e-Taiba, Jaish-e-Mohammad, the D-Company, and the Haqqanis.” This is a positive signal and counter-terror cooperation will be stepped up.

The two leaders have also agreed to intensify cooperation in maritime security to tackle the challenges posed by maritime disputes, especially in the South China Sea. Cooperation in East Asia is to be stepped up “through consultations, dialogues and joint exercises” amongst the countries of the Asia-Pacific. It is heartening to see that India seems to have shed off its reticence and is assuming a more robust strategic role in East Asia.

To facilitate deeper defence cooperation, the Framework for US-India Defence Relationship of 2005 has been renewed for another ten years. While not much headway was made in the first ten years as India has not agreed to US proposals for a Logistics Support Agreement (LSA), Communication Interoperability and Security Memorandum of Agreement (CISMOA), and End-User Verification Agreements (EUVA) on military sales because of the physical inspections built into military sales and transfer of technology issues, there is optimism that both India and the US would be more accommodating as India embarks on the process to acquire more weaponry to meet its defense shortfall, something that the US military-industrial complex cannot ignore.

The first meeting of the Defence Trade and Technology Initiative (DTTI), in September 2014, has decided to establish a Task Force to “evaluate and decide on unique projects and technologies which would have a transformative impact on bilateral defence relations and enhance India’s defense industry and capabilities.” This follows from US Defence Secretary, Chuck Hagel’s assurance in New Delhi in August 2014 to revitalize the DTTI that had been announced by the earlier Defence Secretary Leon Panetta in 2013. The aim of the DTTI was to shift US-India defence relations from a buyer-seller relationship to one involving co-production and co-development. It said the "closest partners" would collaborate in "defence technology transfer, trade, research, co-development and co-production for defence articles and services, including the most advanced and sophisticated technology." Focused working groups to move this initiative forward need to be set up as such collaborations have the potential to impart India greater strategic autonomy and prestige in a changing global scenario.

India-US relations have without doubt received a positive boost from the Modi-Obama summit meeting. The two countries are bound by common values, people to people interactions, soft power linkages and a basic understanding of each other that brings a special dynamism into this partnership. But the challenge in creating a durable strategic relationship will be for the US to treat India as an equal partner and for India to make itself sufficiently useful to Washington to ‘justify the political costs’ needed to implement policies that strengthen Indian power. Can Modi and Obama establish a definitive road map and sustain the momentum?


Published Date: 13th October 2014, Image source: http://im.rediff.com

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