Global Strategy Project

India’s Emerging Partnership with the U.S. and Beyond
by Marco Vicenzino

In recent times, India has hosted most major heads of states and multinational corporations, as well as high-ranking delegations from both the public and private sectors. This obviously constitutes recognition of India’s emerging role as an important political and economic player in global affairs. The emerging U.S.-India partnership was sealed in July 2005 with Prime Minister Singh’s historic visit to Washington. For President Bush, who enjoys significant approval ratings in India, the reciprocal four-day visit to India marks a further consolidation of the partnership at a time of mounting difficulties at home.

India is the world’s second most populous nation after China and home to the second largest population of Muslims (that constitute a minority of approximately 12% of India’s total population of over 1 billion). India has halved poverty since its independence from Great Britain in 1947 and its annual economic growth is projected to range from 7-10% for the foreseeable future. Considering its vast size and complex diversity as the world’s most populous democracy, India ’s relative stability and vibrant civil society remains a monumental achievement. Its population is over 80% Hindu, yet its president is Muslim, its prime minister is Sikh and the head of the governing coalition is Italian-born. However, sectarianism has not disappeared and its potential for sporadic and violence re-emergence still lurks, as demonstrated by the massacres in Gujarat in early 2002 which claimed approximately 2,000 victims, including women and children, as part of a vicious cycle of sectarian reprisals.

As the geopolitical center of gravity shifts to Asia in the 21st century, India finds itself in a geographically strategic position in the heart of South Asia and at the crossroads of the economically explosive Far East and the energy-rich regions of the Middle East and the Central Asian republics. Although India’s rise is inevitable, it constitutes part of a readjustment to reality whereby Asia is reclaiming its natural and historic place in the global economy after nearly two centuries of Western dominance.
Consequently, India is pursuing a policy of strategic pragmatism, skillfully exploiting its status as an emerging power to forge relationships of necessity and convenience, based on its basic needs and interests, particularly in the energy sector, which will significantly impact the pace and extent of its immediate and long-term growth. With nuclear-armed neighbors, including China and Pakistan, India’s policy of pragmatism becomes even more critical.
The extensive commonalities between the US and India include democratic forms of government, language, a shared value for entrepreneurialism and confidence in the future, concern for terrorism and the spread of weapons of mass destruction and a willingness to project power abroad. However, there is a tendency in Washington to overestimate the value of the ” India card”, particularly when interpreted as an attempt to counter China’s growing power and influence in Asia and beyond. Despite any apparent temptations, the reality is that India is still at an early stage of its emergence and to become embroiled in a late 19 th century balance-of-power game would not serve its interests. Although few will dispute India ’s potential for great power status, its path to achieving such status is a long one marked by enormous, but not insurmountable, challenges.

Considering its emerging partnership with India and Pakistan’s essential role in the “war on terror” in Afghanistan and beyond, the U.S. has been trying to strike a balance in its relations with these de-facto members of the nuclear club, specifically concerning the issue of Kashmir. Shrewdly exploiting this issue, jihadist support for militant Kashmiri separatists is viewed as another important front in its “global struggle for Islam”. India’s historical emphasis on a bilateral resolution of the conflict and its traditional reluctance and sensitivity to any involvement, or perceived involvement, by third parties, principally the U.S., has made “behind-the-scenes” intermediation an important aspect of the triangular relationship. In recent years India and Pakistan have pursued important symbolic steps and progress on reducing hostile and confrontational rhetoric. However, this progress has not been reflected in terms of addressing the core substantive issues of the conflict.
The largely untested U.S.-Indian partnership is entering a congressional minefield in a critical election year, particularly with the possibility of a Republican loss of Congress. Growing congressional protectionist tendencies concerning the issue of outsourcing, specifically the risk, whether real or not, of American job losses to India in the service sector, may emerge as a critical issue. In addition, the President’s trade promotion authority may fail to be renewed in mid-2006. Furthermore, legislative approval of President Bush’s nuclear accord with India is far from guaranteed, particularly with accusations of double standards when considering the U.S. and European position on Iran’s budding nuclear program. Without congressional approval of the U.S.-Indian nuclear deal, it remains unclear whether Indian support for the U.S. position will remain unequivocal. Furthermore, the proposal for a pipeline from Iran to India via Pakistan remains a sticking point between both sides. The U.S. view of Iran as a rogue state sponsor of terrorism and nuclear proliferation contrasts from India’s view of Iran as an important source of energy in its pursuit of growth and development.
CHINA AND INDIA
Whereas China began its process of economic liberalization under Deng Xiaoping in 1979, India began its opening in 1991 by necessity as a reaction to financial difficulties. China’s astronomical growth over the past 25 years clearly impacted the Indian psyche and made the desire to “catch up” with China a near national obsession in India , particularly among India’s ruling elites.
Furthermore, outstanding territorial disputes along their mountainous Himalayan borders still exist. Although a silent mutual understanding has emerged in recent years to temporarily sideline such disputes, India’s resounding defeat by the Chinese in the early ’60’s and the lack of precisely defined borders still riles the Indian psyche.

China has also proven more successful in the competition for energy resources. A recently signed memorandum of understanding between India and China was designed to improve cooperation on energy questions, but it realistically amounts to an agreement to combine diplomatic muscle whenever necessary to dictate mutually convenient terms to third party states being targeted for investments in the energy sector. Such cases are likely to be more the exception than the general rule. The competition on the energy front will continue as both states pursue economic growth.
Despite China ’s spectacular quarter-century growth and its significant economic and material advantages over India, India retains a long-term political advantage, which is not easily calculable in the short-term. India’s economic reform, however slow, is taking place within a democratic framework, that is, the institutions of civil society are developing and strengthening over time as economic change takes place. Considering the magnitude of India’s size, population and diversity, the Indian experiment with reform will gradually prove to be a significant achievement, particularly in light of an emerging consensus among political parties on good governance.

China is attempting to increase transparency and accountability at the local level to reduce corruption, principally regarding infrastructure development projects that impact the livelihood of ordinary citizens, and to narrow the gap between urban and rural and coastal and interior regions. However, this does not emanate from a deliberate choice to reform but rather the fear and threat of domestic instability and internal strife in terms of violent protests that could result in civil disorder and fragmentation. Reports of thousands of protests in China’s rural regions have further fuelled these fears.
Once regarded as a liability, India ’s enormous and continuously growing population is now considered an economic asset set to overtake China as the world’s most populous nation. As a result of years of strict policies to control population growth, China ’s population will diminish in the future.

For many in international business, China is the world’s blue-collar assembly line and India is the world’s white-collar assembly line. However, the reality is that each country is seeking to improve all capabilities, that is, China is trying to improve its Information Technology sector and India is focusing beyond IT to improve its manufacturing and agricultural sectors. However, such improvement will be limited without greater deregulation and massive investments in developing infrastructure, principally its transportation system. Today, China spends nine times more than India on infrastructure.
In conclusion, it ultimately remains in the long-term mutual interests of China and India, and the wider international community, that both countries continue to develop ties, cultivate relations and increase cooperation on all fronts in order to ensure uninterrupted and peaceful economic growth and global stability.
Marco Vicenzino is the founder and Executive Director of the Global Strategy Project. He served as Deputy Executive Director of the International Institute for Strategic Studies-US (IISS-US) in Washington, DC, and is an international attorney. He is a graduate of Oxford University and Georgetown University Law Center and has taught International Law at the School of International Service of American University. He can be contacted at msv@globalsp.org