Time for Some Realism in U.S.-India Relations

In a piece on Foreign Policy’s website the other week, Tim Roemer, the immediate past U.S. ambassador in New Delhi, urged Washington officials to pay closer attention to India as a geopolitical and economic partner.  In his view, the country needs to be at the center of the U.S. strategic pivot to Asia and both capitals must, among other things, start work on a free trade agreement.  India’s success, Roemer emphasizes, is “a linchpin in America’s success in the 21st century.”

Roemer’s bottom line is correct but it’s still an odd exhortation to make given the recent visits to New Delhi by senior Obama administration officials – Secretary of State John F. Kerry last June and Vice President Joe Biden a month later – as well as the September summit meeting between President Obama and Prime Minister Manmohan Singh in Washington.  Strange, too, in light of the Obama administration’s efforts to craft a long-term strategic partnership, one that features greater Indian access to the latest U.S. military technology and a defense trade relationship that goes beyond a focus on one-off transactions to include joint research and co-production efforts. Indeed, this proposal was conveyed by then-Defense Secretary Leon E. Panetta during a trip to New Delhi in June 2012, during which he made clear that Washington sees India as a “linchpin” in the pivot strategy.  Mr. Kerry also used similar language during his own visit.

It’s true that the Obama administration in its first year displayed little interest in pursuing high-level engagement with India, a development abraded sensitivities in New Delhi, where elites had grown accustomed to the pride of place their country enjoyed in America’s strategic calculus during the George W. Bush years.  But since then, the Obama team has harkened back to the Bush administration’s emphasis of building up India’s strategic potential as a check against the rise of Chinese power.

So, the problem now is not U.S. indifference but Indian ambivalence.  Consider, for example, the divergent signals that were registered in Washington and New Delhi in early 2012.  The White House was busy rolling out the pivot project to great fanfare, including releasing a high-level Pentagon policy document that skipped over long-standing Asian allies like Japan, South Korea and Australia to give singular mention of India as “a regional economic anchor and provider of security in the broader Indian Ocean region.”  At the same time in New Delhi, however, prominent members of the Indian foreign policy establishment were issuing their own report, titled “Nonalignment 2.0.” Seeking to chart out a set of basic principles to guide national security policy over the next decade, the report emphasized that strategic independence remains “the core of India’s global engagements even today.”

The policy lines drawn in Nonalignment 2.0 are a matter of vigorous debate in New Delhi, and it’s gotten pushback from Indian government officials.  It’s also striking that the document had much more to say about China than about the United States, including warning that India cannot “entirely dismiss the possibility of a major military offensive” along its contested Himalayan border with the People’s Republic.  Yet there was no mistaking the official wariness (here and here) that greeted Panetta’s proposal for a closer military relationship.  Indeed, some observers called the Indian reaction a “snub.”

The leadership dysfunctions currently pervading New Delhi explain some of this.  As one well-placed Indian commentator observes, “there is no escaping the international perception that Delhi has lost the political will to pursue strategic partnerships with any of its friendly interlocutors.”  Yes, hopes are now running high that upcoming parliamentary elections will result in a new, more dynamic government capable of rejuvenating the decision-making process.  But with disputatious coalition governments and the decentralization of national power now the norm in Indian politics, there is little guarantee that more vigorous leadership in New Delhi will be enough to move the bilateral agenda forward.  Ultimately, two larger constraints within India will need to be surmounted in order for relations with the United States to reach a higher plane.

The first of these is the residual suspicion of American global policy that resides in major quarters of the Congress Party and elsewhere.  The “strategic autonomy” mantra in New Delhi is solely deployed against Washington.  Mr. Singh has been a lame duck for most of his second tenure, yet he has also presided over a rapid growth of security ties (here and here) between India and Japan that is all the more remarkable given Tokyo’s deepening contentions with Beijing.  The contrast with the U.S. case is striking.  Forging closer strategic associations with other regional powers in Asia – including the chief U.S. military ally in the region – simply does not arouse the domestic political and bureaucratic opposition that undertakings with the United States engender.

This distrust of Washington was palpable in the extended and uproarious debate over the U.S.-India nuclear cooperation agreement in the summer of 2008.   But it likewise casts shadows in the Nonalignment 2.0 report, the continuing apprehension toward the Obama administration’s strategic entreaties, and in the current uproar over the arrest of an Indian consular official in New York.

A second element impeding the development of bilateral affairs is that U.S. proposals for tighter partnerships in the economic and strategic arenas intrude on fundamental questions that continue to elude consensus in the Indian polity.  Consider how a cottage industry has sprung up in Washington lamenting the clearly undeveloped state of U.S.-India economic relations and proposing such remedies as a bilateral investment accord, a broader-based free trade agreement and Indian inclusion in the construction of the Trans-Pacific Partnership. (Good examples here, here, here and here.)  Never mind that these are paths that Indian elites remain unwilling to walk down.  It is unreasonable, for instance, to believe that New Delhi will further dismantle external trade barriers when key obstacles to intra-state commerce within India persist or that foreign goods and services will find greater favor when domestic businesses remain subject to onerous regulation.

The essential problem hobbling greater bilateral economic interaction is that, since Indian economic reforms were born in the crucible of intense crisis two decades ago, there exists no intellectual tradition underpinning them nor has a political champion emerged to galvanize public opinion.  As Nandan Nilekani, one of the famed co-founders of Infosys, points out, the word “reform” remains “conspicuously absent from the election manifestos of India’s parties.”

The ambivalent embrace of the domestic reform agenda resonances throughout Indian economic statecraft – from New Delhi’s objections that stymied the Doha Round of global trade negotiations for a dozen years, to the interminable saga that talks on an India-European Union free trade agreement have become.  New Delhi has great difficulty in saying “yes” on matters of international economic engagement because it is bereft of corresponding policies at home.

Similarly, U.S. hopes for a tighter security relationship will need to wait for the settlement of the debate now underway in New Delhi over India’s future strategic course and, especially, the nature and depth of the interactions it desires with Washington.  As one analyst recently noted, New Delhi continues to be “constrained by an unresolved tension between the inertia of its policy positions framed during the early years of building the post-colonial state and the logic of its emerging major power status.”

For at least the next few years, grand undertakings like a free trade accord or a closer military partnership are simply not in the cards for U.S.-India relations.  Nonetheless, it should be possible to focus sufficient energy on a handful of more accomplishable projects that build on the steady accumulation of bilateral bonds, while setting the stage for more ambitious undertakings once a more promising moment in the relationship arrives.  One such initiative should be Washington’s sponsorship of New Delhi’s entry into the Asia Pacific Economic Cooperation (APEC) forum, which engages over half of world gross domestic product and a large fraction of global trade.  India for decades has desired formal membership, but its application has continuously been passed over due to a lack of consensus inside the grouping, which currently numbers 21 members.  Some APEC countries have expressed concerns that the institution is too unwieldy as it is and cannot accommodate India or the dozen other interested countries lined up at its door.  Others argue that India is not really a Pacific Rim country and is therefore outside of APEC’s geographic parameters.

But with India poised to become one of the world’s top economies in the years ahead, its absence is a serious lacuna for the organization.  Moreover, Southeast Asia has historically been an area of deep Indian trade and cultural influence, and New Delhi is fast becoming a key factor in the region’s geopolitical calculus.  Involvement with APEC will also further reinforce liberalizing coalitions within India pushing for greater economic openness.  To avoid never ending negotiations about whether other countries should be let in at the same time, the U.S. might repeat its persuasive line about New Delhi’s recent entry into the global nuclear order: India is simply so important that it merits a special dispensation.

This commentary is cross-posted on Chanakya’s Notebook.  I invite you to connect with me via Facebook and Twitter.