Pax Indica: India and the World of the Twenty-first Century (35 page)

This argument seems to assume more American altruism than many realist Indian analysts find plausible. In such an analysis, the United States would essentially leave India alone to pursue its own interests, so long as these upheld a liberal world order; when, in Perkovich’s view, they did not, as (in his view) with the US–India civilian nuclear agreement, Washington should oppose India (as Perkovich himself did in advocating rejection of the deal). In such a reading of Washington’s interests, any attempt to cajole India into a ‘strategic partnership’ would of course clash with India’s own view of its strategic autonomy and fierce independence on the international stage, but it would also be unnecessary. What would be best, therefore, would be a loose partnership on global issues, rather than anything resembling an alliance, with the only litmus test on each
issue being the contribution that India would make to the kind of world order the United States sought to build.

An alternative view that embraces many of the same premises but goes beyond them was that of the Indian-American scholar Ashley Tellis, also at the Carnegie Endowment, who advocated in Washington that the United States should support India in a ‘calculated contribution to creating, in Condoleezza Rice’s famous phrase, a “balance of power that favours freedom”’. As Tellis argued, ‘assisting India to develop its national capabilities is intended not merely to uplift its humanity’ but rather ‘to advance the vital US interest in preserving a stable geopolitical balance in Asia and globally’. He goes on:

To the degree that the American partnership with India aids New Delhi in growing more rapidly, it contributes—along with Japanese, Australian, and Southeast Asian power—towards creating those objective structural constraints that discourage China from abusing its own growing capabilities, even as Washington preserves good relations with Beijing and encourages all its Asian partners to do the same. American strategic generosity towards India, thus, remains an investment in its own geopolitical well being.

In this view, the United States should support policies to strengthen India—including the nuclear deal—even if India remained wilfully independent on certain issues, because it would be good for the United States to do so. To Tellis, ‘the real issue boiled down to how Washington could assist the growth of Indian power so as to secure its larger global aims at lowest cost to itself’.

Neither scholar succumbs to the crude ‘what can India do for us?’ reasoning of many American politicians; Tellis, in effect, suggests that the United States has a stake in India’s success even when no direct benefits to Washington accrue from it—since a successful India is an asset for the United States’ own geopolitical vision of the future world order and ‘itself becomes New Delhi’s strategic bequest to Washington’. Tellis’s only caveat is that his argument for backing Indian success applies ‘so long as it is not used to undermine America’s vital interests’. In turn, Tellis ‘expects that New Delhi would see cooperation with Washington
as being fundamentally in its own interest—and, by extension, act in ways that confirm this expectation whenever possible. Such responses would materialise not so much out of gratitude to the United States but because aiding the preservation of the American-led global order, in contrast to, say, acquiescing to the rise of a Chinese alternative, is necessarily consistent with India’s own vital national interests.’

Tellis served as an adviser to the Bush Administration and to its ambassador in New Delhi, Robert Blackwill, and it is safe to accept that his view both informed and reflected the administration’s thinking on relations with India. It helped, of course, that Indian economic reforms since 1991 had transformed the land of the tortoise-like ‘Hindu rate of growth’ into a rising economic power by the time Bush was elected, and a decade of post–Cold War geopolitics had ended all traces of the sympathy in New Delhi for the Soviet Union that the Republicans used to despise. India’s democracy was itself a source of deep fascination for President Bush, as was the country’s pluralist way of dealing with its own diversity (he was known to have remarked with admiration upon the fact that in 2004 India’s elections were won by a woman of Italian Catholic background who made way for a Sikh to be sworn in as prime minister by a Muslim President). Bush could see no reason why the two giant democracies could not make common cause in pursuing compatible global interests, and he had little patience for the non-proliferation orthodoxies that had ostracized India after the 1998 nuclear tests. The Indian exception was born.

In Tellis’s telling, Washington under Bush perceived a ‘strong compatibility in values’ which was ‘reinforced by the growing recognition that India’s interests increasingly converged with those of the United States’. Abstract considerations of a global balance of power favouring ‘freedom’ were supplemented by far more hard-headed considerations of both countries’ targeting by the forces of Islamist terrorism, especially after 9/11. Tellis puts it well when he suggests that ‘American and Indian interests were similar even if they were not always perfectly congruent’. As an Indian-American, he probably had a higher tolerance for the areas of policy difference between the two states than many of his Washington colleagues, but his President, too, was quite willing to cut India some slack in this area. And there were, with the end of the Cold War, the
new Indian relationship with Israel and the pragmatic recalibration of relations with Southeast Asia embodied in the ‘Look East’ policy, no longer any major differences on issues that the United States would have seen as affecting its own vital interests. In President Bush’s view, therefore, Tellis avers, ‘having India in the stable of America’s friends and allies was preferable to being without it’.

India undoubtedly preferred being considered a friend rather than an ally—a distinction that matters in New Delhi since alliance politics implies a logic of commitment that few Indian policy-makers would find acceptable. India’s preference to support or oppose American policies depending on India’s own assessment of the issues involved is one that successive administrations in Washington have found difficult to swallow, but Bush seems to have done so, provided India was supportive on the transcendent issue of Islamist terrorism, which it was.

Ironically a key issue that cemented Washington’s new thinking about India in the Bush years was one in which the two countries did not in fact necessarily share the same perception. The Bush Administration saw India and the United States as kindred nations threatened by the inexorable rise of Chinese power, and assumed a shared interest in containing Beijing, a perception of which India did not fully partake. Washington was happy enough to promote China’s economic integration into the global order but less content to see it grow too large for its geopolitical breeches; a democratic state in Asia of comparable size, military strength and economic capacity would, many American policy-makers thought, help place some checks on Chinese assertiveness on the regional and world stage. India, while conscious of China’s potential to disrupt the geopolitical status quo, felt its relations with China should follow a strictly bilateral logic, independent of any American desire for an Asian counterweight to China. India’s chronic resistance to being seen to be doing anyone else’s bidding, or to any perception of encroachments on its strategic autonomy, made it, in any case, an implausible participant in any third country’s strategic logic, including America’s. This has become steadily apparent to Washington over the years, and may have helped diminish the ardour with which India is courted, though not the basic underpinnings of the relationship.

At the same time, this thinking helped explain the Bush Administration’s
enthusiasm for arranging an ‘Indian exemption’ on the nuclear deal, as well as its willingness to strengthen defence cooperation, agree to high-technology transfers and even to promote partnership in space exploration. The Obama Administration, in turn, built on these foundations, adding to it the largely symbolic declaration of support for India’s efforts to obtain a permanent seat on the UN Security Council, as well as welcoming and even promoting India’s membership in assorted non-proliferation arrangements.

This kind of relationship, accepted in these terms across influential policy-making circles in both Washington and New Delhi, falls well short of a traditional alliance, something to which India is generally presumed to be allergic. But it justifies strong American support for India as a player on the global stage, as a sound investment for Washington that advances both countries’ strategic aims.

This was broadly the approach of the Bush Administration, given its profound misgivings about the rise of Chinese power. A somewhat more benevolent view of China on the part of the Obama Administration might have diminished the intensity with which such an approach was advocated in Washington, leading some Indian analysts to write of a state of ‘drift’ in the relationship. But it was amply compensated for by the President’s own considerable regard for Indian Prime Minister Manmohan Singh, whom he even publicly described as the first of the three world leaders he most admired and had good relations with. In sum, each country could afford to take a benevolent view of the pursuit by the other of its own interests, secure in the belief that that pursuit would not fundamentally be incompatible with its own core national objectives on the world stage.

But in fact there is more to the India–US relationship than that. As far back as 2005, Prime Minister Manmohan Singh had declared: ‘I believe we are at a juncture where we can embark on a partnership that can draw both on principle as well as pragmatism.’ That practical benefits are available to both sides in the relationship is readily apparent: as the Canadian diplomat David Malone observed, ‘US demand for information
technology and other services has been extremely helpful to India, and India’s capacity to absorb American exports has greatly strengthened American commerce (at a time when much militates against continued unfettered global US economic dominance).’ The question is how to build on those basic trade-offs in order to accomplish a more substantial partnership. The two nations are busily working on this.

So President Obama’s 2010 visit, with which we began this chapter, resulted in significant new agreements across a wide range of subjects, from civil nuclear cooperation to food security issues. The two governments have followed up by developing a collection of consultative mechanisms to improve and strengthen the trade and investment relationship. To take an illustrative list, there are meetings of the US– India Economic and Financial Partnership at finance minister level, the US Trade Representatives’ Trade Policy Forum, and the Department of Commerce’s Commercial Dialogue; perhaps most important to India, a High Technology Cooperation Group has been working to reduce barriers to trade in sensitive cutting-edge high technology.

But governments do not determine every aspect of an economic relationship. US–India business ties have emerged as particularly crucial drivers of the relationship; despite the bureaucratic and domestic political impediments to faster growth, delays in upgrading India’s shoddy infrastructure and the unavoidable transaction costs of doing business in India (including the prevalence of corruption), American firms rightly see the country’s long-term potential as one worth being invested in. According to the McKinsey Global Institute, 80 per cent of the Indian infrastructure of 2030 has yet to be created, and US businesses will have the opportunity to provide the goods and services needed to build or upgrade India’s railways, airports, power plants and IT infrastructure (laying fibre optic cables, for instance). India projects a need to invest some $143 billion in health care, $392 billion in transportation infrastructure and $1.25 trillion in energy production by 2030 to support its rapidly expanding population; many of these contracts could come America’s way.

India’s demographic advantages are particularly attractive: with 65 per cent of its population under thirty-five, India should have a dynamic, productive and youthful workforce when the rest of the world, including
China, is ageing. This would give India, according to one study, 25 per cent of the world’s working population by 2025 (provided India does enough to educate and train its young people to take advantage of this demographic opportunity). India is also a market of 1.2 billion actual and potential consumers, with McKinsey estimating that its middle class could number 525 million by 2025 (though not all would have the purchasing power of the American middle class). Given that the United States is India’s principal export market for its services (and has only just been overtaken by China as a trading partner in goods), the scope for collaboration is huge.

The figures are impressive, and reveal a pattern of increasing economic interdependence. Between 2002 and 2009, US goods exports to India quadrupled, growing from $4.1 billion in 2002 to over $16.4 billion in 2009, while US services exports to India more than tripled, increasing from $3.2 billion in 2002 to over $9.9 billion in 2009. More striking than absolute numbers is the fact that US exports to India grew faster than exports to almost all other countries in the world. In 2010, US exports of goods to India shot up 17 per cent and US goods imports from India went up 40 per cent, making India, at $48.8 billion in goods trade, the United States’ twelfth largest goods trading partner. Preliminary figures for 2011 confirmed the positive trend. Nor is the traffic all one-way. The overall trade relationship is a balanced one, and there are some departures from the norm: while overall FDI into India declined over 2009–11, Indian companies continued to invest in the United States, growing at a compound annual growth rate of 35 per cent between 2004 and 2009. In addition to India’s role in providing services to US businesses and consumers, from medical transcriptions to call centres, India has also become a significant source of tourist revenue for the United States, with some 650,000 Indian visitors in 2010, making India the tenth largest source of tourism to America.