Indo-US Relations: Aspirations and Challenges

As a young nation with 800 million population under age of 35, India today seems to be brimming with confidence and optimism. US in recent interactions has talked of India as its natural global partner, owing to the embodiment of enduring and universal relevance of the shared values of the two nations. However in this hype about the growing relationship between world’s two largest democracies, it may be worthwhile to analyze the aspirations and the challenges of this relationship.     

Before we get into the roadmap for the perceived Strategic Partnership between the two countries, it may be pertinent to mention the irritants hat have been playing in the backdrop:

• Nuclear Deal Limbo. India has been unable to persuade US & other members of the Nuclear Supplier Group on the liability clause. US maintains that Indian Law violates international convention on supplementary compensation.
• UN Security Council (UNSC) Permanent Membership. In 2010 the US President Mr Barak Obama had stated that US was ready to see India as a permanent member of UNSC. However four years down the line, US has made no serious efforts to reform the UNSC.
• Devyani Tussle the Diplomatic Freeze. The Deputy Consul General of India, Devyani Khobragade was arrested in US in Dec 2013 and was subjected to humiliating strip search, DNA swabbing and cavity search, often a procedure meant for hardened criminals. Ever since then the  diplomatic differences between the two countries are in the open.
• Crimea Issue. India did not support US in its stand against Russia over annexation of Crimea.
• Iranian Oil Issue. India continued to import Iranian oil, despite western sanctions on Iran owing to its nuclear program.
• Stand on Human Rights Violations in Sri Lanka. India abstained from voting on US sponsored resolution on Human Rights situation in Sri Lanka. In fact India has taken a stand completely opposite to that of US.
• Cap on H-1B Visa by US. US move to cap H-1B visa for highly skilled/ specialized workers, has affected the Indian IT firms adversely. The restrictions approved by US senate have stifled competition for IT staffing services.

In the new world order, the most important strategic challenge that India faces is the rise of China in the Asian continent. There are far too many coincidences happening, whether it was the border incursion during the visit of Chinese President to India or the surfacing of a Chinese submarine in Sri Lanka coinciding with the visit of Vietnam’s premier to India. A thought needs to be spared whether these are mere coincidences or are these deliberate structured messages of mild diplomacy with some muscle flexing. Coupled with this is the threat of the Islamist Jihadist emanating from Pakistan, more so after the US withdrawal from Afghanistan. Hence it is in the larger interest of India to strike an understanding with US with convergence of thoughts on the security arena.

US aspires to take this partnership to a new level, that is Indian participation in their Global War on Terror (GWOT) in terms of contributing the military component on ground and not only in terms of verbal support. However owing to the geo-political paradigm of South Asia in terms of commitment of Indian Defense Forces on the borders as also within the country, coupled with restricted capability for Out of Area Contingencies, it is not prudent for India to stand shoulder to shoulder with US on this issue.

India needs to seriously make endeavors to make this relationship a success.  However, if there are so many hiccups in this so called Strategic Relationship, then what is actually going to drive this relationship? The world and especially the US started taking India seriously when it started growing economically at 9%. It is only the ability of India to project itself as a future economic super power that has probably propelled US to mend fences, overlook minor irritants and foster a strategic partnership. The economic engagement thus is going to be the metaphor for the potential of this partnership and also for the possibilities of an environment that nurtures the shared values of the two nations.

The bedrock of the stronger bilateral relationship has to be strengthened economic partnership between India and US. After a slump, the Indian economy has started showing signs of revival. The Indian new order has reached out to US investors and has endeavored to sell the dream of ‘Make in India’. However the slogans have to be followed up with the actions on ground. The Fortune 500 US companies that were engaged during the recent visit of India’s Prime Minister to US, are the very companies which were vying to come to India between 2003 to 2008, when we were growing close to 9%. A conducive environment to do business along with predictability in the economic policies and expeditious financial sector reforms have to be ensured to draw the US investors into India.

One such avenue to draw the US investors into India is the Defense Sector manufacturing. The Defense business in India is expected to touch US $100 Billion. At present the US share is only between US $ 10 to 20 Billion. Although US has become India’s largest Defense supplier, there is still tremendous scope for expansion. US wants high level technological competence and cheap labour, both of which are available in India in abundance. The only stumbling block is the India’s ever-lurking ‘Red Tapism’. To set the house in order, the initiative could commence by providing the appropriate environment for ease of doing business in India. This could include amendment to certain key legislations to obviate over dependence on PSUs and OFBs for defense equipment manufacture and in turn permit the Indian civil defense industry for the same. This will indeed lend impetus to achieving the desired dividends of increasing the FDI from 26% to 49% in the defense sector.  

The political scenario in India is favorable for initiating the required reforms as after a long time we have a non-coalition government in power. Certain tough decisions need to be taken and the environment is conducive for the same. However the relationship has to be in which both sides are contributive and sensitive to each others interests and concerns. With the White House issuing a statement of the US President accepting to be the chief guest at the India’s Republic Day Celebrations, the message from US is loud and clear that they want to take this strategic partnership to a new level; however certain concrete reciprocations are very much in the offing from the Indian side.    

The author is a Senior Fellow at CLAWS. Views expressed are personal.