Round The World

New Delhi, 26 June 2013

Indo-US Strategic Dialogue

TIME FOR TACITAL DEPTH

By Monish Tourangbam

Associate Fellow, Observer Research Foundation, New Delhi

As the second President Obama’s term muddles through a minefield of domestic and foreign policy challenges, the 4^th Indo-US Strategic Dialogue recently in New Delhi set the ball rolling for the goals and objectives in Washington-New Delhi partnership for the remainder of Obama’s Presidency.

Alongside it was an opportunity for new US Secretary of State John Kerry to establish a working rapport with his Indian counterpart, and vice versa, which could provide extra dexterity in guiding the overall contours of the relationship, and in smoothening difficult area.

Given that the Dialogue has become an annual high-level event, where both countries led by Foreign Minister and Secretary of State respectively inspect the nuts and bolts of the relationship, questionably, what did the dialogue manage to deliver, or where was it found deficient?

Pertinently, despite the paradigm shift that Indo-US ties have seen in the last decade, specifically since the signing of the landmark civilian nuclear agreement, policy-makers and analysts on both sides have often complained of unfulfilled promises and unmet expectations.

In recent times, the relationship has been portrayed as having “plateaued” with no big game changers visible, with many convergent initiatives being stuck in tactical issues. The most visible being the differences on the implementation of the civilian nuclear deal. With both sides determined to find areas of manoeuvring around domestic concerns and legislations and working agreements are being found, the achievements are far below potential.

The joint statement mentioned ongoing commercial discussions between Nuclear Power Corporation of India Ltd (NPCIL) and Westinghouse towards setting up a nuclear power plant at Mithivirdi in Gujarat. Simultaneous consultations are also taking place between General Electric-Hitachi and NPCIL to set up a nuclear power plant in Andhra Pradesh.

Kerry also reiterated US support for India’s membership in export control regimes like the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement and the Australia Group.

However, notwithstanding growing trade and investment ties, with bilateral trade in goods and services touching nearly $100 billion, and continuing efforts to create conducive business environment, differences persist. For instance, the issue of larger inflow of Foreign Direct Investment (FDI) in India remains a matter of continuing debate.

Some US policy-makers and business leaders often accuse India of “unfair trade practices”. Criticising New Delhi of imposing local content requirements that requires businesses to produce a certain percentage of a product’s parts or materials in the country where it will be sold. Assert they, this policy could potentially block foreign equipment manufacturers from a huge section of the Indian market.

Undeniably, US wants India to implement further economic reforms and liberalisation. In the joint statement, both sides welcomed the adoption of new regulations vis-à-vis foreign investments ceilings in several sectors of the Indian economy and creation of new Cabinet-level mechanisms to expedite investment in infrastructure.

Further, Washington and New Delhi would resume negotiations to conclude a Bilateral Investment Treaty (BIT)/Bilateral Investment Promotion and Protection Agreement (BIPPA) once India’s revised model BIPPA text is ready.

Though, America’s immigration reform is largely targeted towards managing the huge influx of illegal immigrants into the country, Indians are concerned that there will be negative repercussions for our skilled labour. The issue of H1B and L category visas has been on the radar for some time now.

True, every country has the sovereign right to decide whom to allow, how many people and in what format they be permitted to enter the county, the Indian Government, would treat this as trade and economic relations issue rather than a visa matter. Along-with efforts made to air New Delhi’s concerns to those involved in US immigration reform in the Senate and House of Representatives.

Notably, while acknowledging and lamenting the lack of progress, watchers of the relationship on both sides needs to see the context in which ties have progressed. A decade ago, no one could have foreseen the level at which the two countries are now cooperating, including areas like defence sales and military exchanges.

Significantly, burgeoning defence sales has touched $9 billion and both sides are now envisioning turning the buyer-seller relationship into one that engages in joint R&D and co-production. The two countries are also actively cooperating across a vast spectrum, including less visible areas like science and technology, higher education, space exploration and security and cleaner and renewable energy.

Of course, this does not negate the need to add more meat to the strategic skeleton, so far developed. The two countries need to be honest with each other and refrain from engaging in self-deceptions specifically in managing a rising China and countering terrorism that emanates from inside Pakistan.

Certainly both sides must have deliberated on the Taliban reconciliation issue and the precarious situation involving the opening of a Taliban liaison office in Doha, yet the joint statement glided on generalities. Minister Khurshid and Secretary Kerry acknowledged “that success in Afghanistan requires, in addition to building up Afghanistan’s capacity to defend itself, an Afghan-led and Afghan-owned reconciliation process.”

As the US continues the phased drawdown of its forces in Afghanistan and the endgame ensues, there is a concern in India’s strategic community that the Obama Administration, in its pursuit for a face saving exit, is offering too much to the Taliban, and hence to Pakistan playing the facilitator in the reconciliation process.

Besides, America’s pullout from Afghanistan necessitates using the land route through Pakistan. This has given undue leverage to Islamabad, increasing anxiety in New Delhi regarding the spoiler role that Pakistan is well positioned to play in Afghanistan’s future.

Even as , Pakistan’s democratic transition and Nawaz Sharif’s return was welcomed in India, there remains a cautious optimism at best, and more a receding hope regarding what the his Government can or will do against anti-India jihadist groups.

While the joint statement talked about the need to dismantle “terrorist safe havens” and to disrupt “all financial and tactical support for terrorism,” India needs to be clear headed and mindful about US priorities in Afghanistan, the role that Washington US seeks from Islamabad and the compromises that the Obama Administration will allow in the process.

Additionally, as both India and US are stuck in some kind of schizophrenic state when it comes to dealing with a rising China, the economic inter-dependence that both nations share with the Chinese economy, contradicts the suspicions that drive ties when it comes to security matters. Resulting in both countries being cautious while talking of efforts towards containing China, despite the emphasis given to India’s ‘Look East Policy’ and America’s ‘rebalance towards Asia-Pacific’.

In sum, in the midst of Beijing’s belligerent attitude in its vicinity, including its borders with India, clearly, the Obama Administration bonhomie with China, as underscored in the recent Obama-Xi talks in Sunnyland, California has reignited New Delhi’s concerns. Indeed, if Indo-US partnership, as envisioned, aspires to be truly global in nature, both the annual dialogue, as well as other meetings, should not shy away from asking bigger questions of strategy, besides issues of bilateral transactions that are equally important. ----- INFA

(Copyright, India News and Feature Alliance)