Analysis:4 reasons why U.S. wants better relations with India

Evan A. Feigenbaum, Foreign Policy
28 April 2015


Obama’s visit to India is said to have shepherded in a new basis for regional cooperation in the Asia-Pacific. But Obama and Modi have to make their broadly shared interests in the region more real.

President Obama’s January visit to India was, by most measures, a symbolic success. The past decade has witnessed many resonant moments between Washington and New Delhi. But the spectacle of an American president, seated side-by-side with Prime Minister Narendra Modi, as Chief Guest for India’s Republic Day parade was a first – a symbol of Washington’s productive relations with Modi and, perhaps, a harbinger of new potential for U.S.-India relations.
Why the growing closeness over the past decade and a half?
For its part, the United States has developed a growing stake in India’s success. It has developed an interest, too, in a confident and reforming India – one that contributes to global growth, promotes market-based economic policies, helps maintain the global commons, and works to assure a mutually favorable balance of power in Asia, especially against the backdrop of a more powerful and assertive China.
In this sense, Modi’s spirited outreach to Japan, Singapore, and other U.S. partners in the Pacific has stirred American interest. So too has his rekindling of economic reform momentum over the last six months: his public support for a contentious land acquisition bill, impending tax reforms that will unify India’s patchwork tax structure into a common market, passage of coal and mining bills that will expand private sector participation through auctions, and an increase or removal of caps on foreign direct investment (FDI) in insurance, defense, railways, and other industries.
Modi, for his part, clearly seeks a United States that helps to facilitate his economic goals – faster growth, technology acquisition and co-production, and expanded FDI in infrastructure and manufacturing. Previous governments, including but not limited to Modi’s, have also sought
American support for India’s rise as a major power and recognition of its growing economic and strategic weight in Asia and around the world.
But Obama’s visit also included an interesting development: the two governments adopted a standalone joint statement on regional cooperation in the Asia-Pacific. And in the wake of the visit, this statement was trumpeted by many, especially on the U.S. side, as a new basis for cooperation.
In fact, the emphasis on the Pacific is not new. As early as November 2001, U.S.-India joint statements emphasized “common goals in Asia.” A landmark 2002 speech by then-Ambassador to India Robert Blackwill positioned Asian geopolitics squarely at the center of his argument for strengthened partnership. Blackwill put this point directly: “Peace within Asia – a peace that helps perpetuate Asian prosperity – remains an objective that a transformed U.S.-India relationship will help advance.”
But in the decade of the 2000s, the principal lever to enable this cooperation was high technology – something tangible, touchable, and concrete. The two sides could set clear benchmarks: technology would be transferred or not; civil nuclear trade would be permitted or not; adaptations to the U.S. Atomic Energy Act would be made or not; India would separate civilian and military nuclear facilities or not; and so on. And the manifestations of cooperation were many, including a defense technology security dialogue established in August 2003, missile defense cooperation, and Asia-focused military exercises.
By 2004, with the “Next Steps on Strategic Partnership” initiative, the core of the expanded U.S.-India strategic relationship had settled around three areas – civil nuclear activities, civilian space cooperation, and high technology trade – all of which focused on technology acquisition and collaboration. These came to dominate bilateral interaction for the rest of the Bush Administration.
Some of that momentum has continued into the current decade, especially in defense technology. The new U.S. Secretary of Defense, Ashton Carter, has long placed an emphasis on co-development and co-production with India. And the two capitals agreed in 2012 to a potentially robust Defense Technology and Trade Initiative through which the United States would transfer various weapons and technologies and move toward co-production.
But the joint vision statement on Asia issued during Obama’s visit marked a challenging change as well. It turned from a predominant emphasis on the tangible lever of high technology as the manifestation of cooperation to the less tangible, less touchable, less concrete lever of diplomatic coordination.
These tools were at the very core of the joint statement on Asia: the two sides pledged to “strengthen our regional dialogues, invest in making trilateral consultations with third countries in the region more robust, deepen regional integration, strengthen regional forums, explore additional multilateral opportunities for engagement, and pursue areas where we can build capacity.”
The good news is that an enhanced turn toward the Pacific represents a sensible evolution of the U.S.-India relationship. Rapid economic growth has helped India’s trajectory to diverge sharply from that of Pakistan and its other South Asian neighbors. Through participation in the BRICS, the Regional Comprehensive Economic Partnership (RCEP) trade negotiations with Asian economies, and an array of existing free trade and economic partnerships in Asia, notably with Japan and ASEAN, India has burst out of the confining shackles of its South Asian strategic geography. It has become an Asian player, better integrated into the East Asian economic system than at any time since 1947, and has acquired some capacity to influence the broader Asian balance of power.
Bluntly put, while continental Asia – Afghanistan, for example – has long been an arena for U.S.-India disagreement and rancor, maritime Asia and the broader Indo-Pacific offer some natural affinities of interest.
The central challenge, then, is to make broadly shared interests in the region more real. And in that context, the new emphasis on diplomatic (and to a lesser extent, economic) levers will test the depth and quality of the two countries’ coordination.
Here are four reasons why:
First, economics.
For one thing, Washington and New Delhi will need to navigate their pursuit of separate trade arrangements – the U.S.-backed Trans-Pacific Partnership (TPP), which does not include India, and the ASEAN-based RCEP, which does not include the United States but does include China.
More important, the two will need to take individual and joint steps to facilitate enhanced Indian economic integration into East Asia. This is no trivial matter: the backbone of East Asian economics remains integrated supply and production chains from which India is glaringly absent. With rising labor costs in China, the geography of Asian manufacturing is shifting, but mostly to Southeast Asia, not India. Simply stated, Modi’s “Make in India” campaign, which aims to capture a share of regional manufacturing, cannot align with strategic imperatives eastward without land, labor, and other facilitative reforms. And labor reforms, in particular, are bogged down at the federal level, with momentum likely to shift instead to states, such as Rajasthan, that are distantly connected to East Asia, at best.
Second, partnerships.
Washington and New Delhi will need to find ways to leverage India’s third party partnerships in the Pacific – for instance, with U.S. allies and security partners. There is much in the joint vision that does not, in fact, require bilateral steps.
Take defense technology. To date, the emphasis in the U.S.-India-Japan triangle has been on trilateral dialogue mechanisms. But India-Japan technology ties may, ultimately, be more consequential than dialogue for its own sake. Tokyo and New Delhi have mused about making defense technology a cornerstone of their cooperation. But that bar remains very high: India has expressed interest in Japanese diesel electric submarines; thus far, Tokyo has shown little interest in India’s $12 billion sub tender. And despite Prime Minister Shinzo Abe’s broadly stated interest in expanding Japanese defense technology exports, many hurdles remain to make that real, not least high costs, problems of scale, and commercial competition from other vendors.
Ironically, India’s membership in the Beijing-backed Asian Infrastructure Investment Bank (AIIB) may facilitate the very Indian integration into East Asia that Washington
professes to seek. That is ironic because the Obama Administration has, quite transparently, opposed its Asian partners joining the AIIB.
Third, contingency planning.
Can Washington and New Delhi make security coordination more relevant to real-world East Asian contingencies? India holds more military exercises with the United States than with any other country. But joint contingency planning remains an elusive goal. And despite $8 billion in U.S. defense sales, true interoperability remains more distant than ever.
The problem is not just that the two sides remain at loggerheads over foundational agreements, such as the long-debated Logistics Support Agreement, that have been hamstrung by Indian politics for over a decade. India briefly provided refueling support to the United States during the 1991 Persian Gulf War without such an agreement in place. A political uproar ensued; some of those same voices remain skeptical even today. Rather, an equally salient problem is that it is difficult to imagine a serious East Asian security contingency – Taiwan, Korea, the South or East China Seas – to which U.S.-India operational coordination would be relevant. India would almost certainly keep itself aloof. And the United States, for its part, would likely keep itself aloof from India-China border tensions, not wishing to be caught in the middle. That would, predictably, raise hackles in New Delhi about U.S. “reliability.”
One model on which to build would stress informal coordination, while building capacity with third parties. Consider the Tsunami Core Group, through which the United States, India, Japan and Australia provided rapid relief around the Indian Ocean for nine days in 2004 and 2005. Indian participation was effective precisely because it was ad hoc, but the four countries came away from the event with a body of shared experience. India can make unique contributions alongside the United States, especially in informal settings, when it brings specific operational capabilities to the table. That has also been the case in its patrols of the western approaches to the Strait of Malacca.
And that points to a fourth issue: the need to stress function over form.
It is fine for the United States and India to tout common membership in the East Asia Summit and other regional groupings. But such groups are themselves creatures of bureaucratic inertia – ritualistically meeting, issuing hollow statements, and then persisting. Habits of cooperation emerge from mutual interests, shared objectives, and joint efforts to confront real problems, not from abstract geometry.
Ultimately, the United States and India need to enhance functional coordination, including with third parties, on issues such as financial stability or clean energy technology in the East Asian context. There is simply no practical problem of significance in the Asia-Pacific that Washington and New Delhi can resolve working alone. Thus these can be better addressed if the two pool their capacities, on an issue-by-issue basis, with third, fourth, and more parties that bring real capability to the table.
This argues for trilaterals, quadrilaterals, or larger ad hoc groups, but mostly organized informally and around functional coordination on issues, rather than formal coordination in ritualized groupings. That calls for organizational creativity and experimentation.
Ultimately, then, the challenge facing U.S.-India cooperation in Asia turns more on Indian economic choices than on geostrategic developments in Asia. Will India enhance such functional capabilities, and how?
If reforms proceed and India grows again at seven to eight percent, then market forces should propel it inexorably toward the United States and Pacific Asia. If, however, India cannot assure a durable dynamism, then the joint U.S.-India enterprise in the Pacific will almost certainly flounder too.
Evan A. Feigenbaum is Vice Chairman of The Paulson Institute at the University of Chicago and Nonresident Senior Associate at the Carnegie Endowment for International Peace. He served twice during the George W. Bush Administration as Deputy Assistant Secretary of State, including with responsibility for U.S.-India relations.