7

THE NEW INDIA–US RELATIONSHIP

Anjali Ghosh

India had always been peripheral to US interests when it came to forging international engagements. India figured nowhere in the list of priorities enumerated by the US foreign office immediately after President George W. Bush took charge. In the US foreign policy agenda, however, experts emphasized the need for a partnership. This was specially relevant in Asia, because there was no Asian analogue after NATO, and the US think tanks realized the need for key bilateral alliances in the region without, of course, naming India. The deadly terrorist strikes in the US on 11 September 2001 may be regarded as the watershed that spurred the new understanding between India and the US. This, however, does not imply that the US and India were estranged democracies prior to the terrorist attack on 11 September 2001. The post–Cold War era had led to a thawing of relations though it must be mentioned that even during the cold war period Indian intellectuals and professionals had streamed to the US in appreciation of the latter’s contributions to the global community. The ‘feel-good’ factor in the India-US relationship was triggered during the previous regime when Bill Clinton visited India for the first time as US President and foreign policy experts started anticipating the present efforts made by the two regimes.

The elimination of the Soviet threat along with a growing recognition of converging geo-political interests and shared democratic values, the growth of militant Islamic fundamentalism and, finally, the escalation of global terrorism culminating in the 11 September attacks in the US elevated the relationship to the next level. There was a convergence of interests when the US administration came to realize the gravity of the terrorist menace after the 11 September attacks on its Twin Towers. India was already plagued by the menace of cross-border terrorism and took great pains to convince the international community, especially the USA, to take action against terrorist training camps situated inside the Pakistani territory. India therefore accepted what America proposed—the challenge against terrorism was jointly accepted leading to the converging of interests in other fields, and understanding between the two countries seemed to reach a new level.

The dialogue for improving relations between the two countries had long been a subject of debate between the bureaucratic and intellectual elite of the two countries. For example, the Carnegie Study Group.¹ on US-Indian Relations, which had met way back in 1991, recommended separate plans of action for the Indian and US governments to improve their ties. The understanding reflects some of these recommendations.

The lndo-Pak rivalry in the subcontinent and Pakistan’s relations with the US have acted as a barometer in the India–US relations. The United States has often tried to act as a mediator in the Kashmir problem between India and Pakistan, and whenever the tilt has left towards Pakistan, it has left a bad taste in the mouth for India. Pakistan obviously figures prominently in the improvement of Indo-US ties. The triangular equation involving India, Pakistan and the United States has been a significant factor in the maintenance of strategic balance in the region. The American policy on Kashmir has shifted from its earlier stance and supports bilateral negotiations between India and Pakistan within the framework of the Simla Agreement and not on the lines of the UN plebiscite. During the Kargil crisis in 1999, the United States administration helped by applying pressure on Pakistan to withdraw its troops from the Kargil and Drass sectors in Kashmir.² A bilateral link was developed with India by setting up a joint commission to counter terrorism. The Indian government endorsed the National Missile defence proposal adopted by the Bush administration in 2001. The two governments also decided not to criticize each other in public as before; for example, Indian concerns about the US stand on the Kyoto treaty were conveyed privately to the Bush administration. The latter, in a similar manner, muted its criticism of India’s test of the 700 km medium range missile, Agni, in 2001.³

There were in fact several calculations that prompted a ‘reorientation’ in America’s future foreign policy towards India, and according to analysts, the China factor was an important one. China was no longer just a trading partner but was becoming a strategic competitor as well and needed to be contained in Asia. Thus, right from the beginning of 2001, Secretary of State Colin Powell stated that:

We must deal wisely with the world’s largest democracy. Soon to be the most populous country in the world, India has the potential to help keep the peace in the vast Indian Ocean area and its periphery. We need to work harder and more consistently to assist India in this endeavor, while not neglecting our friends in Pakistan.⁴

Post-11 September, the United States renewed its security relationship with Pakistan, but at the same time took India into confidence. India had offered unconditional support to the United States including basing rights for carrying out an air campaign over Afghanistan, but Pakistan’s proximity to Afghanistan made it necessary for the US to renew its alliance with Islamabad. When the Indian Parliament was attacked on 13 December 2001, reportedly by the Lashkar-e-Toiba at the behest of the Pakistani lSI, India mobilized its armed forces along the Pakistani border but decided not to take military action following a US undertaking to put pressure on President Musharraf to halt cross-border ‘infiltration’.⁵

The Indian government offered its wholehearted support to the United States, particularly because it viewed America’s newly declared ‘War on Terror’ as one that was aimed at comprehensively dismantling extremist groups in South Asia and that the US government would realize that the problems of terrorism emanated from Pakistan (along with Afghanistan) and would take appropriate action. (later, of course, in spite of applying diplomatic pressure on Pakistan, the US was unable to bring about a complete halt in terrorist activity in India from across the Pakistani border). India had lost more than 250 people in the terrorist attacks of 11 September and was eager to forge a strategic partnership with the American government. An intense military relationship developed between the two nations and it seemed evident that America’s war on terrorism was intertwined with that of India’s, and terrorist groups like Lashkar-e-Toiba were banned by the USA. During the US military operation in Afghanistan—Operation Enduring Freedom—the Indian Navy helped in escorting and protecting high-value shipping through the Straits of Malacca. This allowed the US ships to refocus on other global commitments against terrorism. Besides, by granting permission to transiting US Naval ships to use Indian ports for resting and refueling, India gave the US Navy the logistical flexibility required to conduct its trans-oceanic operations. Allowing over-flight for the US Air Force aircraft was considered by the United States to be ‘another force-enabler contribution by he Indian government that saved operational planners countless hours’. Thus, following the 11 September terrorist attacks, India had taken immediate and unprecedented steps of offering to the US full cooperation and the use of its bases for counter-terrorism operations reflecting a change in the US-India relationship that was already in the offing. During a meeting between the then Prime Minister Atal Behari Vajpeyee and President Bush in November 2001, the two leaders agreed to expand US-India cooperation on a wide range of issues including counter-terrorism, regional security, space and scientific collaboration, civilian nuclear safety and of course, broadened economic ties. In December 2001, the US Defence Policy Group met in New Delhi after a lapse of five years.

In 2002, the two countries engaged in an unprecedented joint military cooperation. The US supplied 12 AN-TPQ/37 Fire-finder counter-battery radars to the Indian Army. Advanced air combat exercises took place in 2003. The US and the Indian special forces’ soldiers held a two-week joint exercise near the India-China border, and the largest ever ‘Malabar 2003’ joint naval exercises off the Indian coast included an American nuclear submarine. Mock air combats were held in India in February 2004 where Indian pilots defeated American pilots flying older models. In July 2004, an Indian Air Force contingent participated in the Cooperative Cope Thunder exercises in Alaska. Later in the same year, the US and Indiannavies further held joint exercises in ‘Malabar 2004’ off the Goa coast. In spite of these, a fully developed military-to-military relation, however, could not mature between the two countries not only because of divergent views on certain key areas of international politics but also because of the issue of non-proliferation unilaterally laid forth by the USA.

The increasing military involvement between the two countries also led to an increase in US arms sales to India. The US decision to sell $1.1 billion US-Israeli Phalcon airborne early warning system to India has the possibility of tilting the regional strategic balance further in favour of India. The Indian government also possesses the US-made P-3 Orion maritime patrol aircraft, PAC-3 anti-missile systems and electronic warfare system. The supply of sophisticated electronic ground sensors from the US also helped the Indian security forces to stem the tide of militant infiltration in the Kashmir region. GE-404 engines for light combat aircraft (LCA) have been acquired by India. The Air Force is also not excluded from this bilateral convention, and there has been a large strategic deployment of combat exercise between the Air Force Base in Alaska and the Air Force Station in Gwalior. Joint excercises have also been held in November 2005 in the Kalaikunda air base in West Bengal in spite of apprehensions expressed by left political groups.

The US government, however, hesitated to sanction the sale of the sophisticated anti-missile platform—the Arrow Weapons System—which the Indian government wanted to purchase from Israel. In spite of Pakistan being a key ally of the US in all its missions, there definitely appears to be a pro-India drift in the US government’s strategic orientation towards South Asia.

This relationship received a further boost under the second Bush administration where India figured prominently in the future US foreign policy considerations towards Asia. The idea was echoed in a statement made by US Secretary of State Colin Powell in March 2004:

Well before he took office, President George W Bush set the goal of improving relations with India … a nation of over a billion people, a dynamic, multi-ethnic democracy … ancestral home of over one and a half million Americans … a critical presence in Asia … a nation of enormous achievement and promise.⁶

Powell endorsed and accepted the then Prime Minister Atal Behari Vajpayee’s concept of describing India and the United States as ‘natural allies’ and that both nations would ‘seek to stretch the bounds of human knowledge and seize the opportunities of a 21st century world’. The US secretary of state further reiterated:

A thriving, peaceful, democratic India is taking its place on the world stage, and the United States looks forward to acting in close partnership with her. In the years ahead, I see the US–Indian relationship becoming as rich and vibrant as a ‘Bollywood’ blockbuster. To be sure, there will be twists and turns of plots and some challenges for the characters to overcome, but I have no doubt there will be a happily-ever-after result for India, for the US, and the world community.⁷

This transformation in the Indo-US ties was a direct outcome of the new American diplomatic and military policy that was adopted following the 11 September attacks. This was embodied in the new National Security Strategy document approved by President Bush in which he stated: ‘we start with a view of India as a growing world power with which we have common strategic interests. Through a strong partnership with India, we can best address any differences and shape a dynamic future’. Bush was talking of a new world order where he defined the classic American policy in the simplest of terms—‘either you are with us or you are with the terrorists‘. India in its long battle against terrorism, was obviously with America and the Indian government did not hesitate to make that clear to the American authorities. The two countries pledged to cooperate on the global War on Terror and prevent the spread of weapons of mass destruction.

The second Bush administration engaged the Indian government across a wide spectrum of issues. With improvements in the ‘Next Steps in Strategic Partnership (NSSP) ‘, important initiatives were taken. The agreement promised to expand cooperation in three critical areas—civilian nuclear activities, civilian space programmes and high-technology trade. Dialogue would also be pursued on missile defence. While the previous three phenomena came to be known as the ‘trinity’ issues, with the inclusion of the fourth one it came to be referred to as a ‘quartet’.⁸ In June 2004, the Indian Space Research Organization (ISRO) and NASA, along with other partners, celebrated 40 years of cooperation in space exploration at the Indo-US Space Conference in Bangalore. India and the US have established a High Technology Cooperation Group (HTCG)—a forum to discuss ways to promote high-technology trade. Both sides have a common interest in preventing high-technology goods with a military application from falling into the wrong hands.

The above steps have led to the development of more intense activities between India and the United States especially to that of counter terrorism. This was made clear in a speech delivered by the US Charge d’ Affairs to India, Robert Blake, at the Army War College in Indore last year. ‘These who attack our societies, be it in New York, in Washington, in Mumbai, in New Delhi, or in Jammu and Kashmir, must be stopped’.⁹ Earlier, of course, President Bush had sent messages to the Pakistani government to take ‘additional strong and decisive measures’ to eliminate the extremists who seek to harm India. From strategic interests followed other issues like trade and market ties. With the move towards ‘first generation’ economic reforms in India since the early part of the 1990s, US interests in India seems to have increased, particularly in the information technology (IT) and service sectors. According to the American Chamber of Commerce, about 1,000 US companies are doing business in India. Though America is stated to be India’s largest trading partner, and American brands like McDonalds, Domino’s, CocaCola, Nike and Reebok have become very popular in urban India, there seems to be a lack of clear and outright market opportunities for American goods in the new Indian economic society.

With the UPA government coming into power in May 2004, Indo-US relations seem to have improved and gained new momentum. Prime Minister Manmohan Singh, a fine economist and an academician, in his speech at the joint session of the US Congress on 18 July 2005 promised that the natural partnership between the two countries would be based on principle and pragmatism. He invited further foreign investments in areas of high technology including software, engineering design, pharmaceuticals, new oil and gas exploration, coal and hydro-power and civil nuclear energy. The Prime Minister also emphasized a second generation India-US collaboration in agriculture. The Indian leader assured his US counterpart that the laws on intellectual property rights in India ‘have been recently amended to comply fully with our international obligations under the WTO’.¹⁰ India also offered her commitment to work with the US and other partners for strengthening the multilateral trading system in accordance with the negotiations held in the Doha Development Round. Indo-US cooperation was also envisaged in other areas, for example, against the global challenge of HIV/AIDS, and of course, terrorism. Thus, along with people-to-people private sector cooperation, the 18 July joint statement calls for government-to-government joint cooperation in a large range of areas including civil nuclear cooperation, US-India global democracy initiative, an extended US-India economic dialogue focussing on trade, finance, environment and commerce, continued cooperation in science and technology, an energy dialogue to strengthen energy security and promote stable energy markets, an agricultural knowledge initiative, an information and communications technology working group, space cooperation, and a US–India disaster response initiative. The two nations have also signed a treaty on mutual legal assistance in criminal matters. They have also signed an umbrella science and technology agreement that will enhance their capabilities and strengthen relations between the extensive scientific and technological communities of both countries. The agreement also includes a substantive intellectual property rights provision.

Moreover, American officials have been insisting that ‘there is no higher priority’ for George Bush’s second term in office than ‘expanding and broadening our re1ationship with India’¹¹

The economic relationship figures as the most important in this context. As referred before, though American business houses have been making a mark in Indian markets, there remains scope for further involvement, and American officials believe that India should further revise its economic policies and tariff laws, and create conditions conducive for American business in the region. From the time of Dr Singh’s visit, high-powered teams of corporate CEOs from both countries have been engaged in strengthening business exchanges and investment deals. The restriction on the entry of wholly foreign-owned corporations into the retail sector for example, seems to have been lifted with entities like Walmart trying to make a headway in the Indian market. While New Delhi has adopted a more accommodating approach to American demands in global trade negotiations on services and agriculture, there has been a growing outsourcing of computer software-based operations and call centres from the United States to India. It has been reported that IBM has been slashing 13,000 jobs in the US and Europe to create 14,000 jobs in lndia¹²

Nevertheless, the annual US investment has not yet registered any upward trend worth mentioning. The main cause, as stated, has been the slow pace of economic reforms in India. The opinion of the corporate sector is that India needs to restore investor confidence with regard to infrastructure development in order to attract investment from foreign destinations in this highly competitive global marketplace. The ‘American version of US–India Economic Cooperation’ as put forward by the US under secretary for economic, business and agricultural affairs,¹³ calls for a pivotal role of the private sector, restructuring of public sector enterprises, streamlining of the tax system, promoting competition, tripling direct foreign investment and reducing India’s fiscal deficit to 3 per cent within three years. The idea was to facilitate a two-way trade and investment that would address the most immediate and high priority concerns of both Indian and American businesses. Commercial exchanges have been visualized in fields like biotechnology, pharmaceuticals (including research in these areas), telecom, electric power and transportation facilities. Entry of American financial service firms have also been envisaged. The two-way merchandise trade which is $17 billion annually was expected to reach a target of over $100 billion annually and the US annual investment flow was expected to rise from less than half a billion dollars annually to $5 to $10 billion annually within a few years.

The US-India economic dialogue (which was initiated in 2000) moved on five tracks—trade, finance, energy, environment and commerce. Emphasis was also laid on power trading with the idea that other nations of the region could eventually participate in the Indian power trading system. The US government was committed to the development of regional power trading in South Asian because it represents an important untapped market. Food and agriculture would also figure as a crucial part of the expanding trade and investment between the two countries. India produces 200 million tonnes of foodgrains per year (taking the figure of 2004). According to David Mulford, if India opened up its economy to the global marketplace with unbridled private sector participation, it could not only meet the demands of her burgeoning population, but also be fully integrated into the global economy and emerge as a world power.¹⁴

When Finance Minister P. Chidambaram visited the US in September 2005, he laid emphasis on closer Indo-US cooperation in the economic sector. In relation to other developing countries, India has certain definite advantages because of its skilled and intellectual labour that contributes to America’s knowledge -based economy. The US invests its financial resources in India, while India invests its human resources in the US. According to the Indian Finance Minister, developing economies are growing faster than advanced economics, and India faces a bright prospect of playing a contributory role in the global economy. With a GDP of nearly $800 billion, each 10 per cent rise in India’s GDP will contribute $80 billion to world output. India has a 25-year track record of an average annual growth of 5.8 per cent. The nominal GDP being $800 billion, the per capita income is $750 per year. Measured in terms of purchasing power parity, the five biggest economies of the world are the US, China, Japan, India and Germany.¹⁵

According to the Economic Freedom of the World 2005 Report released by the Fraser Institute in Canada, which has measured economic freedom in 127 countries (as per 2003 data), the US is ranked at three, Israel 50, Italy 54, China 86, Brazil 88, while India has been placed at rank 66. This measurement of economic freedom shows that the Indian economy is freer than China or Brazil, though less than Israel or Italy. Taking the above context into consideration, as an Asian power, India along with USA could be a major player in the world economy in spite of certain restraining factors like high oil prices, slack in the international trade growth and weakening economic indicators in the US.¹⁶ The US share in world GDP was 20.9 per cent in 2004 while that of India was 5.9 per cent. However, according to the report presented by the US under secretary, ‘Indian products and services have been doing very well in the US market. Indian producers have demonstrated that they can thrive in a very open and competitive marketplace. They have demonstrated their ability to be global players’. Indian merchandise exports to the US recorded somewhere around $15 billion in 2004, though the US exports to India touched a modest $10 billion last year.

An important component of the 2004 agreement to promote high-technology commerce between the US and India, better known as the ‘next-steps in strategic partnership (NSSP)’ that has become a prime issue between the two countries, is the civilian nuclear energy and civilian space programmes. In July 2005, President Bush and Prime Minister Manmohan Singh issued a joint statement under which the two countries agreed to work towards full civil nuclear cooperation and strengthen the nuclear non-proliferation regime. As per the joint statement, the USA would ‘provide India access to the technology it needs to build a safe, modern and efficient infrastructure that will provide clean, peaceful nuclear energy’.¹⁷ For this purpose, India has to separate its civilian and military nuclear facilities. It would also have to assume non-proliferation responsibilities and protect against diversion of such items either to India’s weapons programme or to some other countries. India’s track record has demonstrated a strong commitment to protect fissile materials and nuclear technology even though it is not formally a part of the NPT regime. India has resisted the proposals for nuclear cooperation with nuclear aspirants that could have had adverse implications for international security.

Through the joint statement, issued in July 2005, India has publicly committed to a number of non-proliferation steps mentioned in the following:¹⁸

1. Identify and separate civilian and military nuclear facilities and programmes, and file a declaration with the International Atomic Energy Agency (IAEA) regarding its civilian facilities.
2. Place voluntarily its civilian nuclear facilities under IAEA safeguards.
3. Sign and adhere to an additional protocol with respect to civilian nuclear facilities.
4. Continue its unilateral moratorium on nuclear testing.
5. Work with the US for concluding a multilateral fissile material cut-off treaty (FMCT) to halt production of fissile material for nuclear weapons.
6. Refrain from the transfer of enrichment and reprocessing technologies to states that do not have them and support efforts to limit their spread.
7. Secure nuclear and missile materials and technologies through comprehensive export control legislation and adherence to the missile technology control regime (MTCR) and nuclear suppliers group (NSG) .¹⁹

The above would contribute to non-proliferation efforts. According to opinions in US official circles, this would bring non-proliferation gains in the US-India deal and strengthen the international nuclear non-proliferation regime.

Reciprocating India’s commitment on civil nuclear cooperation, the US made its own commitment to the initiative. President George W. Bush said he would:

1. Seek agreement from the Congress to adjust US laws and policies.
2. Work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India.
3. Consult with partners on India’s participation in the fusion energy International Thermonuclear Experimental Reactor (ITER) and the Generation IV International Forum, the work of which relates to advanced nuclear energy systems.²⁰

The essential element of the whole initiative was that India would have to demonstrate the follow ups it had made on its commitments, and the US would seek the active support of the Congress and its international partners on the proposed cooperation. India has never proliferated its nuclear technologies and fissile materials to other nations, but now as per the joint statement, its will take on new non-proliferation responsibilities that will strengthen global non-proliferation efforts that serve the fundamental purpose of the NPT Though India has refused to become a party to the NPT as a non-nuclear weapon state, the USA (along with other international partners) recognizes the need to come to terms with India and would not like it to remain completely outside the international non-proliferation system. The USA would not try to renegotiate the NPT taking into account the realities of the unique situation in which India is in.

US authorities have underlined four benefits that would emerge out of the US India cooperation on nuclear energy:

1. It would bring substantive non-proliferation gains in the global main stream.
2. Since nuclear energy does not emit greenhouse gases, India’s modernization programme would be environment-friendly and would not damage the common atmosphere and contribute to global warming.
3. America’s involvement in India’s civil nuclear industry would facilitate US companies to enter India’s lucrative and growing energy market and provide potential jobs for thousands of Americans.
4. Lastly, India’s expertise in basic science and applied engineering would be of substantial use in the efficient development of next generation energy sources—for example, India could contribute to the International Thermonuclear Experimental Reactor (ITER) programme for the development of fusion as a cheap energy source.²¹

The US–India Civil Nuclear Cooperation did not have a smooth passage in either country. While the American Congress was sceptical about the deal at the initial stages, the Left parties in India had there own reservations apprehending that it would not only affect India’s independent nuclear programme but also her sovereign foreign policy. It was only after a debate in the Parliament when Prime Minister Manmohan Singh gave assurances that the government ‘would draw its own necessary conclusion’ if there were any deviation from the joint statement of 18 July 2005. There was no question of the autonomy being compromised and new and unacceptable conditions being introduced. The signing of the nuclear cooperation deal on the other hand would ensure complete and irreversible lifting of restriction imposed on India during the past three decades. It would also take care of all aspect of nuclear cooperation in the field of energy, nuclear fuel, reactors and reprocessing of spent fuel and adequacy of fissile materials. It would also not affect the country’s independent nuclear programme or its sovereign foreign policy. The plan provides for uninterrupted fuel supply to those reactors placed under International Atomic Energy Agency (IAEA) safeguards. Autonomy of research and development activity, first bidder reactors will remain unaffected. India will be free to build its own strategic nuclear fuel reserves.

The Nuclear Deal was overwhelmingly approved by the US House of Representatives on 26 July 2006. The senate cleared it on 16 November 2006, allowing the US to send nuclear fuel and technology to India, which has refused to sign the Nuclear Non-proliferation Treaty. While the agreement calls for the US to send a decade long moratorium on sales of nuclear fuel and reactor components to India, the latter requires to divide its reactor facilities into civilian and military nuclear programmes with civilian facilities open to international inspection. Fourteen out of 22 nuclear power reactors were classified by India as civilian facilities and could be put under international inspections. The other reactors would remain under Indian military jurisdiction, and not open to inspectors.

President Bush signed a new law expanding US Civil Nuclear Cooperation with India on 18 December 2006 at the White House. The law, known as the US–India Peaceful Atomic Energy Cooperation Act, lifted the long-standing legal restrictions—enacted after a series of nuclear weapons tests by India in the 1970s—that prevented US companies from trading in nuclear fuels and investing in India’s civil nuclear industry.

International opinion including that of the Nuclear Suppliers Group was not wholly unanimous on the deal and critics raised fears that it would allow India to built more bombs with its limited stock pile of radioactive materials which in turn would trigger a regional nuclear arms race with China and Pakistan. A downside to the agreement is that it could prompt other countries to seek similar exceptions to the Nuclear Non-proliferation Treaty. Moreover, the pact could rally nations such as North Korea and Iran to press ahead with their nuclear weapons programme despite international complaints and threats. President Bush, however, along with the support of the Senate expressed that ‘the goal nurturing India as an ally outweighed concerns over the risk of spreading nuclear know-how and bomb making materials’.²²

America’s overtures towards India may be referred to as a historical necessity arising out of the exigencies of the world situations. American foreign policy makers have always maintained a strategy of ensuring that they remain the foremost power in military, economic, technological and cultural terms in particular reference to a group of six major powers—US, China, EU, Japan, Russia and India. In order to implement this strategy India has to be enlisted as a partner like the other four powers. This necessitated a U-turn in the US policy towards India. Major powers of the world often take such U-turns in their policies just like the US and China did in 1971 after having fought a bloody war for 18 years. Russia is no longer an adversary; it has integrated into the G-8 group and is important to the US. Both China and Russia are largely partners of the US and are involved in US economic and technological interests. China is a major trading partner of the US. While China will exploit resources from developing countries in terms of oil and mineral products, it will not make even a token effort to fight on their behalf. India is now perhaps the last frontier on which the American government has concentrated—endeavouring to make it a partner and tapping its economic and technological potentials.

The recent upswing in the Indo-US relations may be attributed to a variety of factors—one of them being the role played by the Indian diaspora in the US. Though certain analysts have argued that the role of the Indian diaspora has been over-hyped compared to the American-Jewish community or the Cuban-American community which have been living in the US for a longer time and whose philanthropic contributions have been greater compared to that of the Indians, nevertheless, India has a constituency in the US with ‘real influence and status’ taking into account the intellectual contributions made by the Indian community in America’s knowledge-based economy, in spite of the fact that Indians constitute only 1 per cent of the American population. The Indian community has been trying to play its part when it comes to adoption of policy measures with regard to India. It has been trying to exert its influence in furthering and maintaining the recent upswing in the relations between the two countries.

America’s need to combat terror also calls for a coordination of strategies with India. While India has provided outright support to the US on this matter, the latter, apparently recognizing New Delhi’s position in its own battle against terror, has also envisaged closer cooperation in areas like law enforcement, intelligence sharing and technology controls. The relationship will become more effective if the cooperation is on a reciprocal basis. This means that India, which is a non-terrorist state with a clean record and has been a victim of terror herself, should have the right to seek help from the USA in order to identify and track terrorists.

With the changed scenario in international relations, the Bush administration has come to believe that India’s role could be important in the long run as a strategic partner of the United States. In doing so, the USA has to refrain herself in equating India with Pakistan and not bring in Pakistan within all her bilateral dealings with India. There is also a need to recognize India’s strategic objectives in South Asia on a long-term basis. India’s desire to play a dominant and independent role in South Asia (both economically and strategically) may not be problematic for USA if the latter takes into account the strategic compulsion of India in the region. Strategic analysts like Barry Posen as well as Amit Gupta have argued that America’s military supremacy rests on her ‘control of the commons—the deep seas, airspace over 15,000 feet and outer space’.²³ America has a control over all these ‘commons’ as no other country has, and is likely to retain this advantage for some time to come because of her commitment to military research and development. According to Posen, the current US expenditure on research and development is nearly equal to the combined defence budgets of Germany and France. These capabilities are further enhanced by a wide network of bases and a series of military commands that the US maintains all over the world, which enable it to implement military strategy whenever and wherever needed.

The new India–US relationship could, however, bring about a new orientation in the Indian foreign policy. For example, India’s relations with Iraq appear poised for transformation. Iraq had been a traditional ally. In the post-Saddam era India’s Left parties, on which the United Progressive Alliance (UPA) coalition relies for support, are tooth and nail opposed to India changing its moral stand and establishing links with the Iraqi interim government, whom they brand as ‘stooges’ of the US. This of course, foreclosed the UPA government’s options to deploy any Indian troops to occupied Iraq. Taking into account the international situation where those countries which had strongly opposed US invasion of Iraq, began to veer around to have official dealings with the Iraqi interim government, the UPA government trod a careful path. The international conference at Sharm-el-Sheikh, Egypt, on 23 November 2006 came as an eye-opener for Delhi, because virtually all of Iraq’s neighbours as well as Russia and China and even Pakistan participated, while India was not invited. The Indian government, which aspires to have a role in the affairs of the Gulf, was acutely conscious of being left behind in the efforts to find a solution to the Iraq problem. The task was complex because India had to weigh carefully the broad implications of its Iraq policy on the overarching strategic partnership which it was assiduously forging with the US. Washington would be justified in questioning the merits of the partnership which does not call for a commitment from India to support the US while confronting its single biggest challenge. During his visit to Delhi in June 2006, US Deputy Secretary of State Richard Armitage told the Indian leadership that short of committing Indian troops in Iraq, there were many things that India could still do.²⁴ Thus, the new India-US relationship affects India–Iraq relations in a significant way. Not only does Delhi not wish to be cornered in the upcoming diplomatic turn of events in Iraq and the neighbouring areas, it also does not want its Iraq policy to became a sore point in its relations with the US. The Indian government therefore, in particular the Congress party, has to steer through troubled waters (keeping in mind the Muslim opinion in the country towards President Bush’s perceived hostility toward Islam) and adopt a pragmatic foreign policy towards Baghdad. In view of the emerging ties with the US, India is gradually moving from the path of abject disengagement to judicious and careful engagement with the Iraqi interim government led by lyad Allawi, at the same time, keeping in mind that such engagements should not represent a clear cut endorsement of the US-led position in Iraq.

A strategic cooperation with India could serve complementary interests in areas like Central Asia and the Indian Ocean—the common concern being China’s military modernization efforts and its outreach into the Indian Ocean, where India is poised to play a blue water role extending from the Straits of Hormuz to the Straits of Malacca. America could win Indian support by providing advanced technologies in its areas of concern. In this case it would not be fruitful for the USA to bring in a Western ally as that would be seen as an imperialist venture by non-Western nations. Also, its single venture in this respect would be viewed with apprehension. It remains in its interests to see the emergence in Asia of a power that could counterbalance China. For this, India was best suited given the ideological, economic, military and logistical role that it plays in Asia and in the Indian Ocean region.

Another area where India’s military capability could be used in furthering American interests is in Central Asia. Indian interests in this region is guided by three factors—the need for energy resources and the potential of the Central Asian market; the attempt to counterbalance Chinese as well as Pakistani presence in the region; finally, the concern about radical Islam spreading its influence from the region into India, particularly Kashmir. It is perhaps for this reason that India, after the Taliban’s ouster, seeks to develop its presence in Afghanistan and in the surrounding Central Asian region.²⁵ India’s secular ideology as well as its security assistance would be of help to USA in furthering her own goal of checking radical Islam in the region. Thus, a growth in security cooperation between India and the US was important and in this context the US could gain India’s confidence by removing constraints on its military and technological development as well as appreciating its emerging power potential. The various declarations made and policy measures adopted by the Bush administration display the American government’s awareness and sensitivities towards this issue. While the US has increasing control over the three ‘commons’ previously mentioned, it has little control and expertise when it comes to deployment of land forces especially in unknown terrains. With the expanding global battlefield and corresponding manpower shortages, America needs assistance, and that too from a partner which has shared world views and secular democratic norms. The two countries should not be pitted against each other but try to work on their common concerns for a better balancing of interests, both economic and strategic, on a level-playing field.

India’s interaction with Iran could also develop as a point of controversy in the India-US relationship. India has always maintained a policy of friendship with Iran with Indian leaders often referring to historical ties between the Persian and Indus Valley civilizations. In the current scenario, India tries to maintain a positive relationship with Iran in the field of energy commerce. While the US feels threatened by Iran’s alleged nuclear proliferation programme, India takes a relatively benign view of Iran’s intentions. Nicholas Bums, under secretary for political affairs, in a statement before the House International Relations Committee in March 2006 pinpointed the direct threats Iran poses to vital American interests in the region. They are—Iran’s pursuit of a nuclear weapons capability, its role in directing and funding terror, determination to dominate Middle-East as the most powerful state in the Persian Gulf region and finally, repression of the democratic hopes of the people of Iran. He also referred to the chants of ‘Death to America’ coming from the Iranian regime.²⁶ In this context, America’s current policy vis-a-vis Iran has been to work out a broad international coalition of countries in order to deny Iran a nuclear weapons capability, to prevent it from sponsoring terrorism in the region and around the world, to join in efforts by the Arab government and European allies to blunt Tehran’s regional ambitions and finally to establish democracy in Iran. It is here that India’s role becomes significant within the parameters of the strategic partnership. President Bush, after signing the Henry-Hyde United States-India Peaceful Atomic Energy Cooperation Act in December 2006, came up with the argument that ‘the bill will help keep America safe by paving the way for India to join the global effort to stop the spread of nuclear weapons’.²⁷

The legislative statement, among other things, also included the cooperation of India in preventing Iran’s development of nuclear weapons. India’s Iran policy, on the other hand, is dictated by her energy needs and this according to experts could lead to a policy difference between New Delhi and Washington. For example, there has been a rapid expansion in energy ties. Iran and India have jointly set up a $4.5 billion project for building a gas pipeline that would also cross Pakistan and would be known as the ‘peace pipeline’. Washington signalled its displeasure over this and US Secretary of State, Condoleezza Rice, stated that Washington had concerns over the pipeline deal.²⁸ India, however defended its position by saying that it was guided by its long-term energy security interests. India and Iran have also cultivated military relations. In 2003, both governments conducted joint naval exercises. India is helping Iran in servicing its naval and air force equipment including MIG-29 and in developing batteries for submarines. Though India has helped Iran in generating nuclear energy, it maintains a distance from Iran on the nuclear issue. In 2006, India along with Sri Lanka, Brazil, Egypt and five members of the Security Council, adopted a resolution reporting Iran’s non-compliance to the Security Council on the nuclear proliferation programme. On the economic front, both countries maintain solid trade relations. In January this year, Indian Oil Corporation has reached an agreement with the Iranian firm Petropars to develop a gas block in the gigantic South Pars gas field, home to the world’s largest reserves. At the same time India is cooperating with Iran in securing Persian Gulf sea-lanes and is helping develop its Chahbabar Port to counter Pakistan’s plan to develop the nearby port ofGwadar into a regional hub.²⁹ Thus it is unlikely that New Delhi would abandon its relationship with Tehran and accept the dictates of external powers on the matter, but at the same time the government is most likely to strike a balance so that the strategic partnership is not jeopardized. Most important, America would not like to derail the productive US-India relation developing on several fronts. Balancing of tension seems to be in the offing.

In view of India’s relation with China, both have forged a new alliance in the energy sector and agreed in January 2006 to cooperate in overseas acquisition in places like Sudan and Syria. The blossoming of India-China economic ties in recent years is likely to have its impact on the Indo-US relations; some experts have likened the tango between Washington and New Delhi to that existing between US and another problematic ally, France, which shares its values, but often hews its own course.³⁰

From the US perspective, building a strategic, economic and ideological partnership with India has advantages. For example, the Indian Navy can be used to enforce a broader maritime security framework in the Indian Ocean whereby along with other threats, weapons and narcotics trafficking and piracy in the high seas and in the busy sea-lanes could be checked. India can also play a proactive role in non-proliferation issues; its higher education capabilities could be further developed and its inputs could be digitally accessed through a hybrid satellite system in the neighbouring Asian countries. Following the creation of EDUSAT in 2004, the access to South Asian countries has already been made possible. Spreading these to other areas like Central Asia or the near-East would increase India’s ‘soft power’ and influence in the region, and at the same time the creation of a technocratic elite would smoothen the entry point for American corporations into such countries; besides Indian troops could also be mobilized for peace-keeping and nation-building efforts.³¹

Since India is a responsible state there should be no interference in its efforts to develop its nuclear and conventional military capability. India should develop as a major power and to make it a strategic partner, the United States should understand its quests:

1. to become a permanent member of the United Nations;
2. to develop her nuclear activities (of course without jeopardizing international peace); and finally
3. recognize the Line of Control in Kashmir as the international border, thus preventing any dislocation of the territorial status in South Asia.

Fulfilment of these factors would allow India to play a greater international role and, as Henry Kissinger said, ‘prevent the rise of another dominant power to emerge between Singapore and Aden. And this is compatible with American interests’.³²

India has already started taking a fresh look at its own policy measures. It needs to look West not only to promote trade and economic cooperation but to update its research and technology and use it to benefit its vast pool of skilled manpower and intellectual and technocratic expertise, which would very effectively enable it to become a world player. The economic and strategic relationship between India and the US should be a pragmatic one that would further the specific interests of both nations. While there are complementarities of interests, and while both share secular democratic values, the two nations should be liberal enough to respect each other’s different worldviews as long as they are not contrary to human justice. India is in a position from where it can move into the ranks of the major powers, and for this it needs to pursue its market-oriented policies with adequate economic safeguards for its economically deprived population. India should not only expand its relation with the United States but also negotiate the strategies in the international forum so that its national interests are enhanced.

To conclude, therefore, the new US–India relationship could be meaningful if the bilateral ties are worked out on a level-playing field. The US should follow a proactive policy towards India so that it could attain its national goals and in the process the US would find it easier to secure its long-term objectives in international politics. In the broader context of the Asian region, the US would find it favourable to maintain a strategic balance in conformity with her own needs.

The Indo-US Nuclear Deal

It goes without saying that the UPA Government at the Centre was facing stiff opposition from its Left partners, on whose support the UPA’s majority depended to a great extent. This opposition was obviously with regard to the signing of the civilian nuclear deal with the US. Citing instances from the Hyde Act and the 123 Agreement, the opposition parties, organized a march in New Delhi in protest against it. They, however, relented after the government gave assurances that India would approach the IAEA and negotiate on an India-specific safeguards agreement and that the text of the final safeguards pact would be shown to them for approval before sending it to the IAEA board of governors for signing. The deal was finally signed and sealed on 11 October 2008 by the US Secretary of State Condoleeza Rice and Foreign Affairs Minister Pranab Mukherjee to allow the sale of civilian nuclear technology to India. The CPI(M) had withdrawn support from the UPA Government, but the latter managed to survive by maintaining a majority with the help of newfound allies, which came mainly from the Samajwadi Party.

There have been mixed reactions from the international community. Condoleeza Rice regarded the accord as the recognition of India emergence on the global stage. President elect Barack Obama, in spite of his initial reservations on the issue, termed the Indo-US nuclear deal as the ‘tipping point’ in the new relationship between the two countries. Prime Minister Manmohan Singh had described the deal, which had been termed as the United States Nuclear CooperationApproval and Non-proliferation Enhancement Act on 8 October 2008, as the end of India’s decades-long isolation from the nuclear mainstream, and the end of the technology denial regime.

It is expected that the deal will spur India’s economic growth to a great extent and increase the production of nuclear power generation, in which the US shares an interest. Apart from economic considerations, there are strategic ramifications. Ever since the Cold War, the Pentagon has been advocating increased strategic ties with India and ‘de-hyphenization’ of Pakistan with India. This means the US should have separate policies towards India and Pakistan rather than first an ‘India-Pakistan’ policy. India is also measured by the US as a counterforce against China and the latter’s growing influence in the Indian Ocean area, as well as a potential client for, which it has to compete with Russia.

Thus President George W Bush pushed through an exemption to the nuclear trade rules for India in an effort to cement a new friendship and help balance the rising influence of China, which has not only expanded its sphere of involvement in the Southeastern region but is also a friend of Pakistan and Myanmar. The Americans draw open criticism from some NSG members and grumbles from others. Like Pakistan and Israel, India has stayed outside; the NPT, but this NSG waiver will allow India to import foreign fuel and other technology for its civilian nuclear industry. India is the only Non-NPT country to get this perk. Pakistan wants similar treatment, but the chances of getting it seem to be remote. The row over India is having a complicating effect, not only concerning the criteria for the transfer of such sensitive technologies, in which India wants full and unrestricted trade, but also with regard to arguments put forward by countries like Pakistan and Israel for a similar consideration. Israel is citing the Indo-US civilian nuclear deal as a precedent to alter NSG rules to construct its first nuclear power plant in the Negev desert, and is also pushing for its own trade exemption.

The deal has now been sealed and is in the process of implementation. Therefore, India, without getting entangled into any controversy, ideological or technical, should immediately try to realize the benefits accompanying the deal by weighing her national interest. Nuclear energy could add nearly 40,000 megawatts to India’s grid by 2020. It will not only ensure reliable and uninterrupted supply of nuclear fuel, but is also supposed to grant access to the world of sophisticated technology developed by the global nuclear powers like the US, Japan, Europe and Russia, with whom India has growing diplomatic and commercial relations. Apart from fulfilling India’s search for alternative energy sources, access to high-end technology will give India a strategic platform in the knowledge industry and encourage research and development clean energy technology, and help India to capture the global corporate in areas like automobiles and pharmaceuticals and help her to make her point on global issues like, for example, climate change and trading regulations in the WTO. There are already moves for strategic cooperation in the Indian Ocean area, in protecting the sea lanes and seeking a balance against expanding Chinese influence in the area. Since the above serves the Indian purpose, both strategic and economic, India should, in spite of the controversies and apprehensions raging in different quarters, try to negotiate the benefits out of the deal for her own national interest.

President Barack Obama, despite his initial reservations against the Indo-US Civilian Nuclear Deal, has pledged to work energetically to build on the work of the last two US administrations led by President Clinton and President Bush, and move forward to forge an even closer strategic partnership between the two countries on a range of critical issues, from preventing terrorism to promoting peace and stability in Asia. Building a stronger relationship—including a close strategic partnership—with India has been listed, as yet, by the US President as his ‘top priority’.³³