By: Hari Sud
January 01, 2005

The current era of India – US relations began with the election of AB Vajpayee in 1997 and second term of President Clinton in US. Prior to that India – US elections can at best be described as satisfactory or reasonable. The latter state was predominantly caused by the Cold War hysteria in the West. India was dragged into it indirectly with US seeking regional allies to counter Soviet Union and found Pakistan as a willing ally. US traded weapons for military bases. As a natural consequence, India maintained a neutral sort of foreign policy, which leaned more towards Soviet Union. The US and its media always poked fun at India and its development five year plans. The lowest point was in 1961-63, when promised help to set-up a large steel mill in Bokaro was withdrawn. The 1965 Indo-Pak war did not help. The subsequent 1971 Pakistani Army’s blunder of military operation in Bangladesh and its subsequent defeat at the hands of India did not sit well with US Administrations. Subsequent decades were eventless for India –US relations. Although US wanted Indian support for an anti Soviet operation in Afghanistan, India disagreed with US on freely arming Afghan guerillas and Pakistani Army. Badly mauled, Soviets left Afghanistan and later crumbled into an economic and political chaos. India suddenly had no friend left. The years leading to Vajpayee’s election were of economic chaos and domestic political upheaval. The nation thanked its stars when a strong leader in AB Vajpayee got elected in1997. A complete transformation of India – US relations immediately began. 

India Draws US and the World Attention to Itself 

No amount of diplomatic moves or good fellow image, which India had projected from 1950 to 1996, could draw US and the West’s attention to it. At best India was considered as a basket case. Something drastic needed to be done. Immediately upon becoming the Prime Minister, Vajpayee decided to explode the Indian Atom Bomb. This made US to sit up and take notice of India. Surprised, Clinton and his advisors ran with sanctions to block every possible avenue of technological trade with India. A month later, Pakistan followed it with its own Atom Bomb explosion. Clinton tried to prevent the latter but failed. This earned Pakistan a complete displeasure of US government.  

With the above one act, India became the focus of Clinton Administration. Diplomacy took the center stage. Clinton sent his ace foreign policy official, Strobe Talbot for diplomatic paw – paw with the Indians. Vajpayee sent his able Foreign Minister, Jaswant Singh to the diplomatic table.  

India – US relations with one major act took a center stage. Pakistan on the other hand became the butt end of American ire. 

Talbot – Jaswant Reconciliation talks 

Over two years period these talks in seven countries concluded the following: 

1.       India will never give up the nuclear weapons, although further weapons development will severely be curtailed. 

2.       India wishes to further enhance economic ties with US. This will be mutually advantageous. 

3.       On the diplomatic front, India wishes to sit at the UNSC as a permanent member with all rights and privileges. 

4.       India offered and US partially accepted a strategic role for it in South Asia and Indian Ocean. 

With the above issues under discussion, President Clinton decided to pay a visit to India and see for himself India and its potential. He came to India in 2000 and this visit transformed India – US economic relations. 

Other Factors Drawing US and India Closer 

China’ economic progress, although made in USA with lavish FDI, is a cause for concern in America. It is a matter of time when China will challenge USA. Hence US are in search for a powerful nation in the region which can balance Chinese influence. India with its size and highly educated work force seemed to be an obvious choice. In addition US did not wish to put all its eggs in one basket. The manufacturing had been outsourced to China. US wished another nation to become a partner in service sector outsourcing. India with its skilled workforce and large presence in US, IT sector was again the obvious choice.  

Strategically prior to 9/11, the Bush Jr. administration, considered India as a natural choice to police the Indian Ocean sea-lanes from Suez to Singapore. Enormous amount of trade flows through this route and safeguarding it on a long-term basis is not in the capacity of the US 7^th fleet in the Pacific or 6^th fleet in the Mediterranean. A local power is needed. India has the power and potential to do the job. The Vajpayee government in India liked the Idea and liked the importance it will give to India, hence welcomed it. In addition China’s enormous military advantage on the mainland facing Taiwan could also be neutralized, if India kept the Chinese military reserve in central China somehow busy. Development of ICBMs by India is part of the plan. Although, US will not help yet it will not hurt the development of this strategic technology. These plans were under active consideration in US and India, when Osma Bin Laden struck on 9/11.  

Events, which are Drawing US – India Apart 

The events of 9/11 rudely interrupted the geopolitics in Asia underway. The US got defocused on its long-range objectives. Its policy suddenly became Middle East centric with an objective to remove the perpetrator of this crime from power in Afghanistan. It was an easy task. Overconfident, US went ahead and decided to remove Saddam Hussein in Iraq from power. It has succeeded but done very poorly with 1300 American soldiers dead and no end in sight. It is turning out to be America’s Afghanistan with huge drain on resources and public opposition to it at home. In the process, it has befriended Pakistan and currently showering it with money, military hardware and diplomatic niceties.  

The Cold War mentality in US State Department official is another factor, which is pulling US and India apart. India was previously lumped together with Soviet Union and today this attitude continues. These officials dominate the policymaking and place roadblocks in Indo – US relations. 

American arms supply to Pakistan is currently dominating the Indian mindset. The Indians are fixated on its negatives. US may have made an error in judgment on this issue. But for the greater good of the nation, Indian politicians have to find a way out of this situation. One way out is to get more economic aid and spend more money on defense as the economy grows. This will neutralize all the advantages Pakistan may have with new arms. 

Net Impact of pluses and Minuses on Indo – US relations 

The net impact is that: 

·         China still gets $40 Billion a year of US money as FDI and India about $3 Billion. US have not encouraged industry to consider India for manufacturing outsourcing as an alternative. 

·         Pakistan is back in US good books and at the receiving end of cash grants and arms. 

·         India with its high IT skills, has been given the carte blanche to become service sector headquarter for the US economy. 

·         India has decided to develop its armed forces a bit further, with US raising no hell on increased defense expenditures. 

·         India is seeking from US, strategic technology. This supply is bogged down in US State Department reviews. It may never materialize. 

Above are good and bad. India is benefiting tremendously on IT and BPO outsourcing front. Unfortunately, AB Vajpayee government has been defeated on a host of domestic issues in spring 2004 elections. A left leaning government is leading India into a policy of silent disagreement and confrontation with US.  

Current State of Geopolitics in Asia
 

China 

While US is busy in Iraq and Afghanistan, China is quietly upgrading its economic presence in East Asia. Its manufacturing exports to this region have increased 70% in last three years alone. In a short while all the East Asian nations will economically become addendum to the Chinese economy. This again is happening mainly due to cheaper products coming from China. Mind it, Chinese products are cheaper not because nobody else knows how to make them as cheap as they do but due to almost free money, cheap labor and artificially low exchange rate of its currency. US know about it but wishes to do nothing for two reasons. First, American businesses are reaping a bounty of profits and second all the money Chinese are earning is deposited back in US Treasury Bonds at low interest to help finance the ballooning US budget deficit.  

South East Asia 

Asian tigers of yesterday have become pussycats of today. The economic crisis of late nineties sobered them up. They are not building large manufacturing capacities to match China. They know that China is a favored nation as compared to them. In a crisis situation geopolitics will dictate favoring China. Hence they wish to tie with China and maintain their somewhat lack luster economic ties with US. The recent ASEAN reconfirmed this thought. Over a period of next ten years, all of East Asian economies will be in the full clasp of the Chinese.  

India 

AB Vajpayee opened the economic window to the US and the West. The present government is keeping all the policies enacted by the former prime minister intact. Still, India is not the receiving huge dose of FDI to invest in infrastructure, industry, trade and commerce. India is left to its own devices to upgrade all the forgoing. Still a healthy 6.5% to 8.5% growth rate has been achieved. Exports are slow to grow as no free money in large amounts has arrived still export growth is significant in last two years. One can easily say that India is doing better than it had done in last 50 years. It is now capable of facing up China.  

Pakistan 

It is a spoiler state with emphasis on Islam and grabbing Kashmir from India. It has a competent workforce but no emphasis on education, skill training, and modernization. It has done miserably in last 10 years economically. Only with the current infusion of cash by the Americans, the state has survived. Otherwise it would have completely failed. In last ten years, it allowed India to surge ahead of it economically. Its democratic institutions have failed. Mosques and Mullah are playing a greater role in national affairs as opposed to economists and politicians.  It has no worthwhile exports other than sporting goods and cotton & textiles. Pakistan offers no economic advantage for FDI hence none is forthcoming.  Militarily it is no threat. The Americans have compromised its nukes and the American with withdrawal of spare parts and services can any time sabotage its military hardware. 

Politics in India Affecting Indo – US relations 

China is ruled by a Communist dictatorship, yet it has found a strategic advantage in US mindset to exploit and prosper. Initially, China was the back stabber of the Soviet Union, which US loved. Now it is the cost advantage of products made in China, which invites more and more FDI and prosperity. India is a democracy, but has no strategic advantages. Its location at the crossroads of major sea-lanes is the only advantage it has. Today, India is bypassed when companies in the West consider new location to set up manufacturing. Reasons for this are attributable to 50 years of left leaning politics in India and also to the American apathy.  

The new phase of the evolution of the Indo – US ties started in 1998. This phase is now over. These ties have to be taken to next level. For this, it is India who has to take the initiative.  Although Bush And Vajpayee with great fanfare announced the Next Step Strategic Process in 2004 yet it has yielded no results.  US are leery of the current politicians in power in India and India sees US arming of Pakistan, a regressive step.  US could not care less of India’s objections. It is India who has to reconcile to it.  

Politics in India will have to be Re-formed to Encourage India – US Ties 

The above can only be achieved with present UPA government dumping its left leaning allies and breaking free from the Communist support. The BJP should break free of its regional party support and dump communal politics. Then Congress and BJP support each other on a few common policies for the welfare of the nation. This is not uncommon. Only recently, Prime Minister Arial Sharon in Israel dumped his party and joined hands with opposition Labor Party to push his Gaza withdrawal agenda.  In USA Democrats and Republicans constantly vote for each other’s initiated legislation.  

With above changes, Vajpayee should become the Prime Minister again and KL Advani should stay behind to lead his own party and influence government from outside. Similarly, Sonia Gandhi could influence government from outside. The current Prime Minister is the ablest man to become India’s Ambassador to US. This is need of the hour; otherwise we could miss the US, FDI again. 

What US has to do to prevent Indo – US relations Slide? 

Slide in Indo-US relations, could be prevented by US by: 

·         Freezing the supply of arms to Pakistan. These arms will never catch Osma Bin Laden.  

·         Removing hurdles to export and import in both countries. US in turn should encourage investment in India.  

·         Not lumping India with Pakistan together in all policy decisions. India is in a different league and cannot be compared with Pakistan. Follow the same policy as US follows towards China and Taiwan. Each is dealt independent of the other. 

·         Discouraging negative media stereotype of India. Today, India is a highly skilled service economy. The old stereotype is to be dumped.  

·         US officials of cabinet level be paying more frequent visit to India. They will know more about India by their own visits than by media or embassy reports. 

In the end, one can conclude that India and US are natural strategic partners.  They have to work together to remove hurdles in the forward movement

Hari Sud