U.S. and India: The So-So Strategic Dialogue

This year’s session of the annual U.S.-India Strategic Dialogue, which brought Secretary of State John Kerry to New Delhi two weeks ago, produced few headlines.  The gathering was preceded by low expectations as well as talk (here and here) about how bilateral affairs have plateaued in the years since the nuclear cooperation agreement between President George W. Bush and Prime Minister Manmohan Singh.  Nonetheless, there are some things going in the relationship that are worthy of note.  Here is a rundown.

..…

The session confirmed just how much bilateral dynamics have shifted over the past several years.  In its first year, the Obama administration did not display much interest in pursuing high-level engagement with New Delhi or in formulating “the next big idea” to animate bilateral affairs.  Taking office at a moment when “G-2” cooperation and “Chimerica” were regular themes in U.S. foreign policy circles, Team Obama emphasized full-bore collaboration with Beijing on an array of global governance issues, while in effect demoting New Delhi on Washington’s roster of foreign policy priorities.  Thus, President Obama delivered a major address on U.S. policy in Asia in November 2009, in which he vowed to “strengthen old alliances and build new partnerships” in the region but somehow failed to mention India even in passing.  The omission was all the more glaring given that Mr. Singh was due to arrive in Washington for a state visit a little over a week later.

The neglect of India 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.  Within months of Mr. Obama taking office, one Indian analyst concluded (here and here) that “clearly the new administration in Washington has little time for New Delhi” and that “there [is] no mistaking the thrill is gone” in bilateral relations.  Others (here and here) exclaimed that mistrust of Mr. Obama “pervades the Indian establishment” or warned of foreboding “storms ahead in the Indo-U.S. strategic partnership.”

But the U.S. strategy of expansive engagement with China began to change following the brusque treatment Mr. Obama received from Chinese leaders – both during his trip to Beijing in November 2009 and then at the global climate summit in Copenhagen a month later.  The change of tack was registered at the inaugural session of the U.S.-India Strategic Dialogue in June 2010, when senior U.S. officials began harking back to the Bush administration’s emphasis of building up India’s strategic potential as a check against the rise of Chinese power.

But now that U.S. attention has re-engaged on India, it is New Delhi that is playing hard to get.  This was evident last summer when then-U.S. Defense Secretary Leon E. Panetta visited New Delhi.  Calling India a “linchpin” in the Obama administration’s strategic pivot toward Asia, Panetta proposed the formation of a long-term strategic partnership, one featuring greater Indian access to the latest U.S. military technology and a defense trade relationship that went beyond a focus on one-off transactions to include joint research and co-production efforts.  Mr. Kerry renewed this overture while in New Delhi by calling India “a key part of the U.S. rebalance in Asia.”  In both cases, the Indian leadership has remained non-committal.

How likely is it that New Delhi will come around?  There are a growing number of doubters in Washington, where widespread disappointment has taken hold that bilateral ties continue to fall far short of the promises which seemed so alive just a few years ago.  But U.S. hopes for deeper strategic ties still might not be out of the question.  First, some $8 billion in Indian purchases of U.S. military equipment is in the pipeline.  Second, the recent India-China border standoff in the Ladakh region of Kashmir has already led to closer security relations between New Delhi and Tokyo.  A similar result might spring forth from Vice President Joe Biden’s visit to New Delhi later this month and Indian Prime Minister Manmohan Singh’s journey to Washington in September.

The key variable here is whether Singh’s government, which has long been a lame duck and is now focused on upcoming parliamentary elections, still has enough political gas to move things forward bilaterally.  We’ll know more on this score shortly.

..…

Much of Mr. Kerry’s meetings in New Delhi were focused on economic frictions that have been accumulating for some time and which form another factor in the growth in Washington of what I have termed “Delhi disillusionment” and what others call “India fatigue.”  The American side continues to be upset over a tough Indian nuclear liability that goes far beyond international norms and which has had the effect of all but blocking the involvement of U.S. companies in India’s expanding nuclear energy sector – one of the very things that the nuclear deal was supposed to bring about.  (The law has also rankled Russia and, until recently, France, both of which are also vying for contracts in India’s expanding nuclear power sector.)

More recent complaints about discriminatory trade practices and the violation of intellectual property rights have also taken a toll.  In the days before Kerry journeyed to New Delhi, a bipartisan group of 40 Senators wrote him to complain about Indian trade protectionism, and the top Democrat and Republican on the Senate Finance Committee told him that …

We cannot afford to sit back and watch as India adopts policies that adversely impact U.S. innovative and creative industries, and threaten the greater stability of the international trading system.

A similar letter from 35 members of the House Ways and Means Committee arrived in President Obama’s inbox.  And 16 business associations from nearly every segment of the U.S. economy have coalesced into the “Alliance for Fair Trade with India” and sent their own letter to the White House.*

For their part, the Indians are concerned that immigration legislation just passed by the U.S. Senate will unduly affect Indian technology firms that send skilled personnel to this country on short-term visas.

New Delhi extended an olive branch of sorts to Mr. Kerry by pledging to sign in the weeks ahead an agreement allowing Westinghouse to do preliminary licensing and site development work for a nuclear power plant in Gujurat.  But even this falls far short of the breakthrough Kerry portrayed it as, since it entails no firm promises on the Indian side.  And acceding to New Delhi’s request, Kerry announced that Washington would allow U.S. natural gas exports to energy-starved India.  But it will take years before this project comes online.

The mutual frustrations mean that the bilateral investment treaty that Washington and New Delhi have started work on, much less a full-blown free trade agreement being pushed by some (here and here), is far off in the distance.**  But economic grievances need not derail the strategic agenda.  For example, even as the groundwork for the nuclear cooperation deal was being laid, the two governments were at loggerheads in the Doha world trade talks, an impasse that helped bring about their collapse.  Paradoxically, the U.S. Congress gave its preliminary assent to the nuclear deal in December 2006 at the same moment that anger over New Delhi’s position in the Doha negotiations caused legislators to cut some of India’s trade privileges under the Generalized System of Preferences. And in the months prior to Congressional approval of the implementing “123 Agreement,” a high-ranking Bush administration official publicly accused New Delhi of stymieing negotiations and “working behind the scenes for Doha’s demise.”

..…

Secretary Kerry missed a good opportunity to generate some positive headlines by launching a visionary, signature initiative of his own.  In his public address in New Delhi, he rightly underscored the desirability of enhanced India-Pakistan economic links.  Although the remark attracted criticism (more on this below), the real problem was that he only offered mere words of support rather than a proposal of concrete assistance for a goal that both New Delhi and Islamabad embrace.  (I’ve outlined what such a proposal might entail in an earlier post.)  He compounded the mistake when he mentioned the Obama administration’s “New Silk Road” initiative that is designed to ensure Afghanistan’s economic future by building it up as a regional trade and transit hub but then failed to make the connection to the regional diplomatic environment.  To put it bluntly, the prerequisite for the NSR’s viability is a dramatic improvement in India-Pakistan relations and the best way to secure this is to bolster economic engagement between the arch-rivals.

The disjunctions in Kerry’s remarks were all the more glaring given that he had been diplomatically creative a month earlier when he unveiled a $4 billion plan for Palestinian economic development as a way of catalyzing Middle East peace negotiations.  And just days after Kerry departed New Delhi, President Obama during his tour of Africa launched a $7 billion initiative aimed at doubling access to electricity across that continent.  In the same vein, Washington would do well to think of imaginative new ways to encourage cross-border economic cooperation in South Asia.

..…

The Strategic Dialogue session highlighted Washington’s continuing need to do to convince New Delhi about U.S. steadfastness in Afghanistan, an issue that I flagged in a recent post.  Mr. Kerry certainly made the right noises, at least in his public remarks, but their impact was diluted by two things.

The first is the continuing chasm between the Obama administration and Hamid Karzai’s government in Kabul over the political endgame in Afghanistan.  Unfortunately for Kerry, the extent of this gap was fully exposed a week before his trip by the debacle over the start of what was supposed to be a U.S.-backed negotiating process with the Taliban and the opening of a Taliban representative office in Doha to that end.  The lack of any mention about this process in the joint statement issued by Mr. Kerry and Indian Foreign Minister Salman Khurshid is a telling indicator that Washington and New Delhi are not on the same page.  Nor was the Indian side well assured when Kerry asked Khursid to put in a good word with Karzai about U.S. intentions in Afghanistan.

Rather, the conclusion that New Delhi most likely drew from this request was that the lines of communication between Washington and Kabul are horribly frayed.  Confirmation of this proposition has arrived in recent days.  Reports out of Kabul are that Mr. Karzai, who suspects that the Obama administration in its haste to depart Afghanistan is trying to broker a separate deal with the Taliban and its Pakistani allies, is now telling people that he doesn’t really trust the Americans.  Meanwhile, reports coming out of Washington are that President Obama, frustrated in his dealings with Karzai, is giving serious consideration to accelerating the drawdown of U.S. combat troops in the country and nixing plans to keep a small residual force behind to conduct counter-terrorism operations and advise Afghan forces.  New Delhi has invested heavily in Karzai over the past decade, and developments like these will resonate far more than Mr. Kerry’s soothing words.

A second development that undermined Kerry’s message in New Delhi was that during a press conference with Mr. Khursid he badly misstated U.S. conditions for the launch of negotiations with the Taliban.  Many in the Indian establishment will take this as yet another example of Obama administration’s credibility problems (here and here) on Afghanistan.

..…

Mr. Kerry’s words on Afghanistan might have had greater resonance in New Delhi had he shared his predecessor’s well-known sentimental attachment toward India.  Instead, many suspect him of harboring pro-Pakistani feelings, and this belief was only reinforced by the sandwiching of his visit in between trips to the Middle East.  Indeed, the public address he gave in New Delhi was not well attended by either Indian officialdom or the strategic affairs cognoscenti.  And his advice to take up Pakistani Prime Minister Nawaz Sharif’s offer for improved relations was interpreted by a number of Indians as further evidence as his “soft line on Pakistan,” as The Hindu put it.  The newspaper reported that his stance “left Indian diplomats displeased because Mr. Kerry has the perception of being soft on Pakistan unlike Ms. Clinton.”

This perception is a bit unfair given the role Kerry played as a Senator in supporting the U.S.-India nuclear deal.  And it’s worth noting that Clinton’s well-known affection did not stop the Obama administration’s early neglect of India.  Still, the sentiment toward Kerry is unfortunate since India now has a foreign minister (Mr. Khurshid) who not only has lived in the United States but also desires much stronger ties with Washington.

*New Delhi announced yesterday that it was suspending the “Buy India” regulations instituted a few months ago mandating that electronic goods purchased by the government contain a certain proportion of locally-made hardware.

**Instructively, the India-European Union negotiations on a free trade deal have been hanging fire for years now.

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