Great expectations: But positive mood in Washington

Post-election murmurs from Foggy Bottom on relations with India and also among all the political and thinking class has reaffirmed the bipartisan support for stronger relations and engagement whereas the recent political developments in India has cast a shadow on Indian bipartisan support for strong relations with the US.

The warm telephonic conversations after his reelection with Prime Minister Dr Manmohan Singh and later his meetings in Phnom Penh during the East Asia summit has reaffirmed Obama’s desire to develop close coordination on issues of mutual interest and fast forward the bilateral relations.

All indications are that the second presidency of Barack Obama will make a renewed effort to deepen the strategic partnership with India in its own national strategic, geo-political and economic interests, but it takes two hands to clap.

During his first Presidency Barack Obama reinforced the policy of strong strategic partnership with India assiduously set on course by the previous Republican George Bush administration.

There were genuine and unreasonable expectations from both the sides to deliver, and failure on these counts led to many grouses against each other. In fact, in 2009, when Barack Obama assumed the charge of the US Administration, there were lot of apprehensions in Indian diplomatic community.

Strategic partnership

But against all domestic odds, he invited Dr Manmohan Singh as the first State Guest. The previous Republican President George Bush had taken India-US relations to a new height and the Obama administration belying all apprehensions wanted to take the relationships to newer heights.

India was not the bone of contention in the nationwide election debates on issues relating to foreign policy, which gave enough indication that a nationwide consensus has developed on the need for a strong strategic partnership with India.

However, in the second term of its administration, the scandal ridden and lame-duck UPA government heavily dependent on the support of the regional parties for its survival, found it difficult to take the relationship with the US forward.

First, the UPA government had to surrender to the demands of the major changes in the nuclear liability law and later the emergence of anti-nuclear lobby took the US nuclear power companies by surprise who felt cheated, after the Indo-US nuclear agreement, the benefits of which has not yet accrued to them.

The US Administration was also expecting a quid pro quo in the shape of US$ 10.5 billion Multi Role Combat Aircraft deal in lieu of the Indo-US nuclear deal, for which the US leaders and top diplomats were openly campaigning and putting pressures on Indian government and in fact President Obama also wrote a letter to Indian Prime Minister.

The US defence sector is hopeful of a big business from India, as India plans acquisitions worth US$ 100 billion in the next decade. In the first decade of revived India-US defence relations the US companies have supplied systems worth US$ 10 billion and many more billions could be in the pipeline.

A decade earlier, the US political and thinking class was not very sure of the need for a strong partnership with India.

However, the challenge posed by a rising and asserting China has changed the mindset of the US political and think-tank circles and now there is an overwhelming support for a strong bilateral engagement with India.

With the rise of India as an emerging economic power the US business class emerged as a strong proponent of a tension free Indo-US relations for which the lifting of all US promoted international sanctions regime in nuclear and defence sectors was considered as the sine-qua-non.

The US business propelled the US administration under both the Democratic and Republican regimes and pushed India’s case and lobbied hard in favor of India, which were strongly opposed by China.

In the early years of his first term Obama seemed to be inclined to develop a US-China condominium for managing world relations but later the US administration began talking about a diplomatic and military pivot in Asia to balance the aggressive tendencies of China.

The Obama administration also started urging India to assume a larger role in promoting a stable balance of power in Asia.

But a divisive Indian polity cannot perform this role. Though US administration has started engaging with India on various issues of mutual and international concerns, India is finding itself slipping from many multilateral forums like BRICS and G-20.

Two countries have witnessed a slump in momentum in bilateral relations, though bilateral engagements in many areas of mutual concerns have increased phenomenally.

However, the White House felt disheartened with India’s slowing economic reforms, which in fact is the prime source of attraction for US business.

The political interests of the US leaders would be more advanced if India offers better opportunities for US business. Though the Indo-US bilateral trade is about to reach an unprecedented height of US$ 100 billion very soon, the investment climate in India has deteriorated sharply accompanied by sharp fall in Indian growth rate.

Domestic instability

The unstable political situation and inability to take major national decisions has led to reduced interest of US business in India which is evident from the fact that President Obama ignored the presence of Indian Prime Minister on various international gatherings where he was also present.

The immediate prospects of US$ 100 billion trade have created lot of expectations in US business which wants the relationship to go deeper. However, uncertainties have emerged in Indian domestic political consensus on issues relating to the nuclear investment and economic reforms which interests the US investors most.

The US had worked hard to help India join the nuclear mainstream, with an intention to grab more than US$ 100 billion investment in Indian nuclear sector but failed to take even a single step in this direction. Perhaps the Indian domestic politics has put a spanner in the US expectations.

The evolving geopolitical environment necessitates the US to come closer to India, especially in view of an increasingly assertive China but India will have to weigh various options before embarking on an alliance kind of relationship with the sole superpower.

As the Indo-US trade will very soon touch US$ 100 billion, the US wants India to introduce next set of economic reforms which will allow greater capital outflow from US to India in Indian manufacturing and infrastructure sector.

There were wide expectations in the US administration from an emerging India but the corruption ridden Indian establishment is itself fighting for survival.

The last ditch effort to introduce economic reforms in the county may be an effort by the UPA government to save its sagging international image which was intended as a message to the international community that India means real business.

However, since the quality of governance is going down, no amount of reform can work in a lawless country, practicing crony capitalism and fake nationalism. International investors look for sound political authority, good governance and good law and order, in the absence of which any country becomes unattractive.

As the UPA Government is gearing up for the next parliamentary elections, it would be difficult to imagine a cohesive policy towards US. Fearing domestic backlash, the government will find it difficult to implement some big ticket reforms.

The impending parliamentary elections will keep the government engaged in domestic vote bank politics, which will forbid the government from moving fast towards deeper engagement with US.

Though there is lot of scope to move forward, while protecting own turf in international arena, India simply has to prove to the world that it remains an attractive investment destination and market.

The size and huge possibilities of the Indian market has encouraged many governments around the globe to shed its anti nuclear rhetoric towards India which includes countries like Canada and Australia.

Since economy and business is the guiding force behind many strong bilateral relationships, India will once again have to prove its vitality as a strong and stable economy.

Though both the countries have seen many divergent views and policies on issues relating to Iran and Syria, top diplomats of both the countries have continued to discuss on these and many other subjects.

The Foreign Minister level strategic dialogue is now a routine feature and has helped in understanding strategic compulsions of each other. The recent example of Iran would be worth mentioning.

The recent indications of US desire to engage with Iran through Indian assistance will perhaps bring both the countries to a better understanding. The US understands that Iran is not Iraq and asking India to snap relations with Iran will not help US interests also.

The two countries are also now working closely on Afghanistan, though during the initial years of Obama presidency the State Department tried to club India with Afghanistan and Pakistan while accepting the Pakistani argument that India should be considered as part of the problem rather than solution of the  burning issue, which in fact directly impacts on US interests.

Later the Obama regime came to terms with India and developed good understanding with Indian authorities on how to move forward.   

Thus, the later years of Obama administration looked serious in developing a very cooperative relationship with India and Obama’s second term has also started sending positive signals, the UPA regime has to capitalize on the positive mood towards India in the US.