In his state visit to India in 2010, President Barack Obama hailed the Indo-American relationship as “one of the defining partnerships of the 21st century.” The statement was hardly exaggerated. India’s sheer size and location makes it an obvious choice for the United States to realize its goal of maintaining a balance of power in the Asia-Pacific region in the face of an increasingly assertive China. India, too, perceives China as a credible threat and understands that it needs outside help to deal with a power much mightier than itself. Combine this issue of adversarial China with other areas of common interest, such as counterrorism and stability in South Asia, and a long-term strategic partnership between India and the United States seems only natural.
Likewise, an enhanced cooperation in the economic realm is also sure to bring enormous benefits to both parties. Following its economic liberalization in the 1990s, India has been emerging as an increasingly influential player in the global economy. Together, India and the United States have enough leverage to shape the rules of the global economy. More importantly, bilateral trade and investment between the two giant economies have potential to create tremendous wealth for both countries.
But the growing convergence of strategic and economic interests has not been matched by the scope and level of bilateral engagements. In other words, “the defining partnership” is itself yet to be clearly defined. Strategic and military cooperation has improved in the last two decades but does not speak to the partnership’s potential. Economic cooperation is even less developed: The two countries are yet to sign a free-trade agreement and have several WTO cases filed against each other.
In the context of a relationship whose relevance is growing, Washington should consider India as its top priority and work toward increasing engagements in both strategic and economic fronts. While nurturing this relationship might not bring great short-term benefits and could require concessions from the United States, strengthening it will be crucial in determining American primacy in the long run.
Post-Cold War Convergence
During the Cold War, India did not fit in well with the American vision for the world. Guided by Nehruvian socialism, India advocated for and practiced an autarkic and protectionist economic model involving a strong state presence. This stood in stark contrast to what the United States promoted through the Bretton Woods system: a global economic order characterized by free markets and free trade.
More importantly, the two countries’ strategic goals also seemed disparate. As a leader of the Non-Aligned Movement, India vowed to stay neutral during the Cold War. In the 1970s, however, it effectively sided with the Soviets after the Nixon administration supported Pakistan in the Indo-Pakistani war of 1971. The normalization of Sino-American relations under the Nixon administration further distanced India, which had recently fought a border war with China.
The Indo-American relationship reached its nadir in the 1970s and remained there for two decades. Since the 1990s, however, the two democracies have experienced a gradual realignment of interests. The collapse of the Soviet Union in 1991 rendered the Cold War-era bitterness between them largely irrelevant. Additionally, they have found common interest in confronting several challenges, ranging from rising Chinese power to jihadist terrorism. On the economic front, the Indian economy has become freer and larger, making economic partnership an attractive option.
A Tale of Slow Progress
Several important developments in Indo-American strategic partnership have taken place in the past two decades; the U.S.-India Civil Nuclear Agreement was perhaps the first milestone. India, which was not a part of the nonproliferation regime and had previously faced U.S.-led nuclear sanctions, essentially gained recognition as a nuclear weapons state after the signing of this treaty in 2006. This landmark agreement under the Bush administration is still looked back as a watershed moment in Indo-American relations.
The Obama administration failed to capitalize on the enthusiasm the Bush administration generated for Indo-American relations. “During much of the Obama administration, India remained a relatively low priority, viewed only through narrow lenses such as climate change,” Dhruva Jaishankar, a fellow in foreign policy at Brookings Institution India, told the HPR. Nevertheless, some crucial progress was made in its final years with the signing of a joint strategic vision in 2015 and the designation of India as a major defense partner in 2016.
As with many other foreign policy issues, there is a high degree of uncertainty about Indo-American relations under the present administration. “It is evident that there is greater unpredictability in the U.S. foreign and security policy and, consequently, in the responses of other nations following President Trump’s assumption of office. India is no exception to this global trend,” Jayant Prasad, a former Indian diplomat who now heads the Institute for Defense Studies and Analyses in New Delhi, explained to the HPR.
But despite this uncertainty, there have been many positive signs that hint at a brighter future for Indo-American relations. “Contrary to many expectations, Trump has pursued a set of policies that are not entirely at odds with Indian interests,” said Jaishankar. “These include a stronger military presence and role in the Indo-Pacific, more support for defence technology sharing with the likes of India, and economic policies that sometimes inadvertently benefit India, such as greater scrutiny of Chinese economic activity.”
Washington’s recently toughened stance on Pakistan is also a welcome development for Indo-American relations. New Delhi has long been annoyed by U.S. military support to Pakistan in spite of growing Sino-Pakistani affinity, Pakistan’s alleged support for terrorism against India, and its obstruction to peace-building efforts in Afghanistan. Recently, however, the Trump administration has signaled a change in status quo by suspending military aid to Pakistan. As Washington rethinks its South Asia strategy, it should not miss the opportunity to accommodate India as a long-term strategic partner in the region.
A Case for Delimited Strategic Cooperation
Moving forward, Washington should take Indo-American strategic partnership to the next level. India and the United States already hold more joint military exercises with each other than either does with any other country, but their military cooperation still has much room to expand. For instance, both countries would benefit immensely from a robust military collaboration on counterterrorism.
The United States also has an opportunity to assist India with its defense-modernization process. The Indian military remains antiquated and ill-integrated, thanks partly to a history of anti-militarism. A stronger India will need a much more sophisticated defense system. The United States has agreed to share some of its more advanced defense systems and technology with India in a recent high-level bilateral meeting. More steps in this direction are necessary.
In the course of enhancing strategic engagements with India, Washington should also clearly identify the scope of this partnership. “There are natural areas where Indo-American partnership makes a lot of sense but that does not mean a full-fledged global partnership in on the cards,” Richard M. Rossow of the Center for Strategic and International Studies told the HPR. He added that “we should focus on areas of natural convergence rather than trying to claim a big global convergence.”
Two such areas where the two countries’ interests lack consonance are Russia and Iran. India has a historic relationship with Russia; its military still purchases the majority of its defense equipments from Russia. Likewise, India’s energy and security interests are tied with Iran. Washington’s approach to this divergence of interests should be to respect Indian sensitivities wherever possible. The Trump administration’s decision to provide India a waiver on recently renewed sanctions on Iran’s oil exports is an exemplary step in that regard.
Helping with India’s Development
While the present U.S. administration is getting many things right on the strategic front, it is only making things worse on the economic front. The steel and aluminum tariffs imposed earlier this year are hurting India directly and, as a result, India is now considering retaliatory tariffs on U.S. goods. The U.S. Treasury department has also added India to its currency watchlist — for the first time in several years — citing potential “unfair currency practices.” In short, the inward-looking character of the present administration — exemplified by the “America First” slogan — is hurting America’s credibility as a reliable economic partner.
With a population of 1.3 billion, India has major developmental needs and challenges. Prime Minister Narendra Modi was elected on the agenda of economic growth and employment. Any partnership without the economic dimension would therefore make little sense for the developing nation. If Washington is committed to developing a strong partnership with India, it will have to forego its present transactional method of dealing solely with economic issues for an approach that focuses on long-term economic and strategic benefits.
This would entail facilitating bilateral trade and investment while directly assisting in India’s development. Despite a lack of bilateral trade treaty, Indo-American trade has increased sevenfold in the past two decades because of vibrant private sectors in both countries. Bilateral engagements, such as the resolution of trade disputes and a bilateral trade agreement, can further unleash the potential of economic cooperation, leading to gains for both countries. The United States should also continue providing India with developmental aid, not least to prove its reliability as a partner.
Washington should understand that the economic and the strategic are always enmeshed. A stronger India is in America’s best interests. But for India to become stronger, it must also become richer. The Indo-American relationship should progress in a way that ensures interconnectedness in both strategic and economic issues. Only then can this be the defining partnership of our century.
Image Credit: Official White House Photo/Lawrence Jackson