September 28, 2014

ick-Starting the U.S.-Indian Strategic Partnership

Ashley J. Tellis

Indian Prime Minister Narendra Modi's forthcoming visit to Washington will provide India and the United States with a golden opportunity to repair their faltering partnership. The stakes are high, even if the circumstances today are not particularly propitious.

The United States is consumed by managing disorder in Eurasia, the Middle East, and East Asia. India is marginal to resolving these crises, even though it could be far more significant if it chose to. On issues closer to home—Pakistan and Afghanistan—India is rightly fearful about U.S. policies, and on critical initiatives farther afield—the U.S. rebalance to Asia—India is understandably ambivalent. Further complicating matters, bilateral relations have deteriorated in recent years because of poor policy choices in India on nuclear liability, taxation, and trade. More importantly, India's recent political paralysis and crumbling economic growth have suppressed the opportunities for more robust commercial ties.

Tellis is a senior associate at the Carnegie Endowment for International Peace specializing in international security, defense, and Asian strategic issues. 

In these circumstances, the latter-day approach to India pursued by the administration of U.S. President Barack Obama has not helped any. By permitting sectoral interests to define the content of U.S. engagement with India, Washington has allowed a pernicious transactionalism to gradually replace the strategic vision that previously guided the evolution of bilateral relations. This mistake was compounded by the obsessive complaints of senior U.S. government officials about India's economic policies. However misguided these decisions may have been, the failure to place them in the wider context of necessary geopolitical cooperation ended up embittering both sides. As things stand, therefore, the U.S.-Indian strategic partnership is in a rut.
If Modi's private remarks to visiting American officials recently are any indication, the Indian prime minister seeks to end this stagnation. But his approach, which seemingly centers on soliciting huge international investments for important, high-profile projects at home, offers poor prospects for any deep U.S. involvement that would quickly resuscitate joint cooperation between the two countries.

None of these challenges can be resolved overnight or through a single visit by a prime minister who has had other reasons to nurse personal grievances against the United States. Yet, dismaying his many hard-line followers, Modi has reached out to Washington, warmly receiving a series of American dignitaries since his accession to office in May 2014. The Obama administration has recognized his efforts and will heartily reciprocate when the prime minister visits on September 29–30. The president will go out of his way to welcome Modi in ways that are atypical for a working visit: he will host a private dinner for him in the White House and spend more time with him either in intimate settings or in restricted meetings than is usual. The U.S. vice president and secretary of state will host a welcome luncheon at the State Department as well, and an intense set of bilateral discussions to review the entire gamut of the relationship can be expected.

All in all, the administration will treat Modi with the honor befitting the leader of the world's largest democracy and a strategic partner of the United States. That sentiment will be fully echoed when the prime minister meets the congressional leadership on Capitol Hill as well.

Needless to say, both governments are working diligently to ensure that the visit produces a harvest of "deliverables" that will mark it a success. The range of interactions between the two countries today is truly immense and spans the entire spectrum of high and low politics. In fact, the joint statements issued from bilateral encounters in the past have a certain mind-numbing quality because of the diverse initiatives they record, sometimes without any particular sense of priority.

Although it is to be hoped that this visit will mark the abandonment of that cumbersome product, the fact that the two nations cooperate in varied, and sometimes esoteric, activities is all to the good. It will therefore be no surprise if Modi's visit to Washington records further progress on, among other issues, cybersecurity and homeland security, defense, education, public health and human capital growth, energy and the environment, infrastructure and urban development, and civilian space and nuclear cooperation. This range of topics demonstrates the continuing value of bilateral ties.

With a little bit of luck, both countries may make sufficient headway to announce ambitious initiatives. These could include U.S. decisions to partner with New Delhi on developing India's next-generation aircraft carrier, to sell India unconventional oil and gas, or to permit U.S. companies to use Indian space launch services. The United States might also accelerate its efforts to complete India's integration into the multilateral nonproliferation regimes or decide to deepen meaningful cyberdefense cooperation with India.

Similarly, India could bring to the table important decisions to close on key projects subsumed by the Defense Trade and Technology Initiative or new solutions for overcoming the impasse over the nuclear liability law. India could show a renewed willingness to cooperate on salvaging the Doha round of global trade talks or advancing the common quest for mitigating climate change, or it could recommit to energetic liberalization at home in ways that open the door for greater American private participation in India's economic growth.

Even if all these breakthroughs occur—and it would be miraculous if they did—would they suffice to truly transmute bilateral ties into the strategic partnership that both nations have declared is their avowed aim? There is reason to be skeptical, not because these advances are unimportant, but because the relationship has lost the foundational moorings that would otherwise bestow these leaps with strategic significance. Thankfully, however, all is not lost. Modi can, through the conduct of his diplomacy during this visit, do the three things necessary to renew bilateral ties in their most fundamental terms.

So, what must the prime minister actually do?

First, Modi must build personal relationships with key interlocutors. Although it is true that states ultimately act in accordance with their national interests, their actions at the practical level are colored deeply by the quality of the private ties enjoyed by their leaders. There are few countries that have witnessed this reality in recent years more vividly than India. The extraordinary friendship that developed between the then U.S. deputy secretary of state, Strobe Talbott, and the Indian minister of external affairs, Jaswant Singh, in the aftermath of the 1998 Indian nuclear tests is one such example. That bond may not have resolved the vexatious bilateral dispute over India's nuclear weapons, but it was critical in shaping Washington's favorable policy toward New Delhi during the Indo-Pakistani war that followed in the Kargil-Dras sector of Jammu and Kashmir.

Similarly, the U.S.-Indian nuclear cooperation agreement was owed greatly to the deep respect then U.S. president George W. Bush had developed for India's prime minister during his first term, Atal Bihari Vajpayee, and his affection for Vajpayee's successor, Manmohan Singh. This combination of esteem and endearment, which would later mark Obama's and Singh's interactions during the global economic crisis, would pave the way for continued advantages to India. This was reflected in three important decisions that marked the early Obama presidency: an invitation to Singh as the first state guest of the new president; the speedy conclusion of a nuclear fuel reprocessing agreement with India; and the public extension of U.S. support for India's candidacy as a permanent member of the United Nations Security Council.

The moral of the story is clear: the quality of the personal relations between leaders makes a difference to the way in which they conduct foreign policy. And especially among friendly nations, such as the United States and India, relationships make a huge difference to whether the outcomes of summits are prosaic or momentous. Modi's first order of business in the United States, then, consists of building a strong connection with Obama, of the kind the prime minister enjoys with his Japanese counterpart, Shinzo Abe.

There is every reason to hope that such a rapport develops: both Modi and Obama are intensely composed individuals, and both are relentlessly purposeful—but both are also deeply charismatic and can be charming to a fault. Building a foundation on personal respect and taking the first steps toward friendship will yield benefits for both leaders individually as well as rewards that go beyond the private. In the past, such affinity has induced leaders to walk the extra mile for one another, and that has paid off in dampening national disagreements when they arise—which, in the U.S.-Indian case, they certainly will.

As history has also demonstrated, this empathy encourages leaders to take risks and boldly push the bounds of policy beyond the comfort of their bureaucracies, to the advantage of the bilateral relationship. Whatever the current challenges bedeviling the United States and India, they will be greatly mitigated if Modi capitalizes on his intimate meetings to develop strong personal ties with Obama. The president still has over two years in office, which as both leaders know is an eternity in politics.

The prime minister should not stop there. Through the course of his visit to the United States, both in Washington and in New York, Modi will encounter many American interlocutors in government and outside it. If he approaches these meetings with the intention of forging durable associations beyond what the immediate business demands—and this applies especially to discussions with senior administration officials, congressional leadership, and leaders in civil society—the longer-term payoffs will exceed those chalked up in any joint statement.

In this context, the bridges he builds on Capitol Hill will be especially important. Many of those he meets there will be around for the duration of his prime ministerial term, and the congressional leaders on both sides of the aisle remain strong champions of India. In recent years though, their disenchantment with Indian policies has grown, reflecting the wider sentiment throughout official Washington.

Modi needs to charm their socks off. The bipartisan support among American lawmakers for India will be strengthened immensely if the prime minister can convey his determination to set right the relationship in ways that matter to their constituents: by pursuing good policies at home that yield renewed opportunities for business and civil society in the United States. What the U.S. Congress yearns for, more than anything else where India is concerned, is validation that its historic bets on India in recent years—reflected by its willingness to amend laws to uniquely favor New Delhi—were not a mistake. There is no better person than India's prime minister to provide that assurance.

Modi's second task is to rejuvenate the concept of "strategic partnership." During Vajpayee's tenure, the U.S.-Indian relationship acquired genuine depth for the first time since the 1962 Sino-Indian War because both sides had a convergent understanding about what a strategic partnership entailed. Shorn of all subtlety, this imperative of geopolitical collaboration was anchored in the mutual desire to preserve a continental balance of power that would prevent Beijing from dominating Asia to the disadvantage of both Washington and New Delhi. Neither capital had any appetite for pursuing the containment of China, nor did they believe it was necessary for their well-being. Both, however, wanted to coordinate their otherwise independent policies to the maximum degree possible to prevent China from either driving a wedge between them or misusing its power to their mutual detriment.

This required honest conversations—and lots of them. Discussions took place between U.S. Ambassador Robert Blackwill and Jaswant Singh; between then Indian national security adviser Brajesh Mishra and his U.S. counterpart Condoleezza Rice; between then U.S. undersecretary of defense for policy Douglas Feith and Indian defense secretary Yogendra Narain; between then U.S. undersecretary of commerce Kenneth Juster and Indian diplomat Jayant Prasad as well as then Indian foreign secretary Kanwal Sibal; and, later, between another Indian foreign secretary, Shyam Saran, and the counselor to the secretary of state, Philip Zelikow.

These talks have never been rivaled—or reprised—in recent years. That is a pity because it has deprived both nations of doing what is necessary to build up the other to achieve their common ends. These discussions involved each side identifying and articulating its own particular interests, but the ensuing conversations were not scripted parleys revolving around the mere recitation of talking points previously cleared by their governments. Rather, they evolved into free-flowing conversations and exchanges of ideas that provided the participants with a deeper insight into why standing policy took the form it did. Simultaneously, the discussions provided opportunities to explore the possibilities for change. To her credit, as secretary of state in Obama's first term, Hillary Clinton tried her best to carry on this tradition, but the absence of suitable Indian counterparts doomed the effort.

Three critical rules of engagement evolved from those early encounters during the Bush-Vajpayee era. Codified in the Rice-Mishra dialogue, these rules took the following form: first, no surprises; second, discuss disagreements vigorously but work to keep them private and contained; third, look for ways to support the other side on issues that deeply matter to it. The pattern of engagement hewed to these understandings well into Singh's first term but unfortunately atrophied subsequently. In fact, the experience of recent years demonstrates that these principles have been honored mainly in the breach. That the U.S.-Indian relationship has frayed should then come as no surprise.

Today, U.S. policymakers across a wide spectrum are perplexed by what the phrase "strategic partnership" actually means where India is concerned. After an interregnum of desultory conversations, Modi's visit to Washington presents a great opportunity to reconsider this issue. Beyond platitudes about democracy and common values, it is important that both sides have an honest conversation about the kind of relationship they seek and what it obligates mutually. Modi and Obama are both plain-speaking men and should have no difficulty conducting the type of conversation their predecessor governments once had. If they do so, the bilateral relationship will come out stronger because it will leave little room for exaggerated or misplaced expectations on either side.

Both principals would do well to think carefully about how they envisage the other country fitting into their own grand strategy. Fortunately for Modi, the United States has been utterly—perhaps even unduly—transparent about its ambitions for India. To summarize these aims, even at the risk of oversimplifying them: the United States ardently supports India's rise because its success as a powerful democracy would help to transform the greater South Asian region while serving as an objective constraint on growing Chinese power.

If India can achieve the economic and geopolitical success it seeks for its own development, it could in time become a security provider in the Indian Ocean basin, easing U.S. burdens there. India could also effectively partner with the United States in protecting the liberal international order that serves the interest of both countries. Most importantly, New Delhi could do all this without formally allying with Washington, merely by cooperating with it in the manner agreed upon during the Bush-Vajpayee years—and thus gain all the bounties from the strategic partnership while protecting its cherished independence.

U.S. policymakers today are intensely interested in understanding Modi's corresponding vision of how the United States fits into India's conception of the strategic partnership. What they have heard thus far has been meager and unsatisfactory. To the degree that this vision has been articulated at all, it has usually been anchored in an emphasis on Modi's domestic priorities. In other words, the United States is important to India in that it can support the prime minister's domestic agenda by serving as a source of capital and technology for the developmental projects Modi seeks to complete at home.

Such a truncated vision of partnership is unlikely to be appealing to Obama or to any of his successors. For starters, as many observers, such as Devesh Kapur of the University of Pennsylvania, have pointed out, the ability of the United States to serve today as an official source of capital for India's development is highly limited. Unlike China and Japan, which possess huge investible reserves, thanks largely to U.S. consumption of their goods, the United States lacks the kind of sovereign wealth funds that would permit it to funnel tens of billions of dollars toward financing Modi's priority projects.

To be sure, vast investible resources exist in the United States, but these are primarily in private hands. The U.S. government, the primary object of the prime minister's engagement, cannot direct its citizenry to invest in India as a favor to the state. The same goes for mundane technology, however important it may be for meeting India's basic development objectives more efficiently. The bulk of such technologies are incubated and owned by the private sector in the United States, and they will be gladly domesticated in India so long as the prime minister's economic policies make it attractive for American enterprises to do business in his country.

Where Modi's conversations with Obama become relevant to the prime minister's quest is in the area of high technology. That is because the U.S. government retains ultimate control over the transfer of all cutting-edge embodied and disembodied knowledge in the military, dual-use, and some civilian arenas. But herein lies a catch. The United States, as a rule, is loath to part with its most puissant capabilities unless it believes it shares a fundamental affinity of interests with another nation. If Modi is to secure the U.S. administration's support for helping India shift its national technology frontier outward, he must be able to offer his senior-most, official American interlocutors a vision of strategic partnership that they would find both appealing and consistent with their own conceptions of national interest.

In other words, simply contending that the importance of the United States for India derives from the prime minister's particular domestic priorities is likely to seem quite insipid to his counterparts. Rather, they will want to know how Modi pictures India positioning itself as a partner that is valuable enough to the United States to warrant giving it privileged access to America's most sophisticated capabilities.

These expectations alter the kind of conversation with which Modi is most familiar. As someone who has built his reputation on getting things done, he is most comfortable thinking of grand change as little other than the successful culmination of a series of specific projects. The kind of discussions that will reinvigorate the U.S.-Indian strategic partnership, however, will not revolve around particular initiatives, important though those might be.

Instead, the dialogue will have to be about the highest aims of both sides in a national as well as international context, how each fits into the other's vision of realizing these aspirations, and how they propose to collaborate in achieving these goals despite their particular constraints. Gaining clarity about these fundamental questions is essential to rescuing the bilateral engagement from both derision and vacuity. It would not be an exaggeration to say that there is currently no task more important where rebuilding bilateral ties is concerned: achieve a common understanding of what the strategic partnership entails, and all else follows; fail on that count, and nothing both sides do right on the minutiae will save the transformation.

Modi's third task during his visit will be to co-opt American civil society to support India's development. Of all the countries the prime minister has engaged with thus far, the United States is unique in that its societal institutions shape and constrain foreign policy to an unprecedented degree—and therefore have an enormous impact, even abroad. Modi has astutely recognized this already. Accordingly, he has made it part of his schedule to address a huge jamboree of Indian-Americans and others at Madison Square Garden in New York City. The 20,000-strong event will be broadcast live in Times Square and at other locations around the city.

Modi's calculations are canny. By giving his audience a taste of both his gripping oratory and his riveting persona, he hopes to animate the Indian diaspora in the financial capital and beyond into supporting his ambitious agenda for remaking India. At the same time, he seeks to marshal them to serve as a motivated interest group in the United States. In this connection, he is also expected to make an unprecedented appearance at the Global Citizen Festival in Central Park. There, after being introduced by actor Hugh Jackman, he will address close to 50,000 concertgoers hosted by the Global Poverty Project in support of a campaign aimed at improving the lives of the impoverished through vaccines, education, and sanitation—the last of which is especially close to his heart. While in the city, he is also expected to address the Council on Foreign Relations, delivering a speech that will further burnish his credentials as a statesman while reinforcing his larger message with audiences back at home.

However important these public activities are for various political reasons in the United States and in India, the real dividends will come from Modi's individual and collective meetings with U.S. business leaders in Washington and New York. The outcome of these discussions, held mostly outside the public eye, hold the true promise of advancing Modi's ambition to transform India because, if he can convince the American private sector to transfer capital, technology, and best practices as part of their investments in India—not to mention championing India's cause with U.S. policymakers and congressional leaders—he will have gained exactly those resources he needs to achieve his aims.

Unfortunately, however, what Modi has done thus far, and what he is likely to do further while in the United States, is necessary but not sufficient. Exhorting foreign investors to physically plant their flag and removing procedural impediments to setting up shop in India are important, but in the absence of larger policy change—which liberates the economy on multiple levels—U.S. business is unlikely to be enticed.

Because American companies will make a beeline for India only when the enabling environment is propitious, Modi needs to convince his audience that he will expeditiously do the three things that are necessary to welcome increased foreign direct investments: institute long-overdue policy reforms that enlarge free markets in India and thereby create room for private initiative in different ways; rationalize and simplify the bureaucratic procedures necessary to start and sustain business operations locally; and protect investments already made through fair, effective, and transparent procedures that uphold the sanctity of contracts, preclude extortion by the state, and enable speedy adjudication in the event of disputes.

Modi has thus far focused his energies on the second component; he has taken a stab at, but not completely put to bed, problems with the third; and he has punted entirely on the challenges associated with the first. If this trifecta is not addressed comprehensively and soon, American business will essentially give up on India and look elsewhere. At a time when the global economy is steadily improving, many other destinations will compete with India for U.S. investment—and they will win, if they promise a better policy environment, greater institutional rectitude, and a reasonable regulatory and enforcement regime.

This does not mean that American business will cease to invest in India. The large size of the country's population ensures that major international companies will want to maintain some presence in India's national market. But it does imply that foreign actors will not make India a priority destination for their investments—to Modi's and India's cost in an increasingly competitive international economic environment.

The prime minister's maiden budget, unfortunately, did not convince American business that a pot of gold lies at the end of the Indian rainbow. Judging from the reticence of Indian investors, they seem to have reached a similar conclusion, at least for now. As Swaminathan S. Anklesaria Aiyar, highlighting this fact, asked trenchantly, "If Indians are not rushing to invest in India, will foreigners really do so?" Clearly, the conspicuous absence of structural reforms and the continued economic populism displayed through Modi's policies since he took office have left both foreign and domestic investors somewhat queasy. While in the United States, he will hear all this from the former directly. At the moment, American investors are willing to extend him some latitude, hoping that policy announcements during the remainder of the current fiscal year and in the next budget will show the true difference in course between Modi and the preceding regime.

But if failure persists even then, American business, at any rate, will give up on India, concluding that if a leader with a strong mandate such as Modi cannot change direction, then the prospects for a turnaround are truly bleak. When the prime minister meets the titans of U.S. industry during his forthcoming visit, he will have a chance to persuade them face-to-face that their worst fears will not materialize. If he is convincing—and only his actions will finally prove that—he will have gained the most important ally in American civil society, to India's lasting benefit.

Whether Modi succeeds on all these counts will make the difference to whether his visit produces only modest results or the transformative outcomes that can put the U.S.-Indian strategic partnership back on track. There will be strong temptations both in Washington and in New Delhi to focus on the myriad initiatives that can be announced after the bilateral consultations have concluded on September 30. However important these outcomes may be, it would be unfortunate if they dominated the discussions that are slated to occur at the White House.

What the U.S.-Indian relationship desperately needs for lasting success at this juncture is not more activities, regardless of how valuable or well-intentioned those may be. Both sides, for different reasons, appear to have lost sight of the partnership's core strategic imperatives; they have spent the last few years, therefore, struggling to find cooperative activities as a substitute. While the U.S. and Indian governments are undoubtedly capable of coming up with new pursuits, these by themselves will not suffice to build the strategic partnership that both desire.

Rather, the two leaders should seek a genuine rediscovery and reaffirmation of the fundamentals that brought the two countries together in the first place. Accordingly, President Obama and Prime Minister Modi will be better served by spending their time together discussing why they should be forging a strategic partnership to begin with—and gaining agreement on how they can do so, given the differences between the United States and India in national capability, worldviews, and commitment to practical cooperation on various issues of international politics.

If such a productive conversation occurs, the president will quickly realize that, despite the usual frustrations of dealing with India, a strong association with New Delhi is nevertheless valuable because it advances the vital interest in preserving a favorable Asian balance of power. Appreciating this reality should make his administration more indulgent in its dealings with India.

Conversely, such a discussion should also pointedly remind the prime minister of how robust ties with the United States would deepen Indian security, facilitate its embrace in the wider Indo-Pacific region, and increase its bargaining capacity with formidable rivals such as China, including on matters that directly affect its territorial integrity. Understanding these benefits would permit Modi to appreciate the United States anew and, paradoxically, would take him back to the objective that drove his election campaign: transforming India at home.

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