BackTime to reset India-US relations
Diplomatic ties between India and the US are looking at a second life. Rarely do such opportunities present themselves
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Ten years ago, India and the US inked the significant civil nuclear agreement deal. Both sides gained from it. On the one hand, it tacitly acknowledged India as a member of the exclusive club of nuclear-armed nations, even while it brought India’s civil nuclear programme—with the primary emphasis on generating nuclear power—under global oversight. The former was a big plus for prime minister Manmohan Singh, who had just completed a year in office and was keen to show deliverables. Similarly, president George W. Bush, battered by the fallout of the wars in Iraq and Afghanistan, was keen to record a foreign policy success in the first year of his second tenure at the helm in the White House by enlisting India as a non-proliferator.
The wheel has turned a full circle. A new US president, Barack Obama, flew in on Sunday and met with a new counterpart, Prime Minister Narendra Modi. The two leaders said they welcomed the understandings reached on the issues of civil nuclear liability and administrative arrangements for civil nuclear cooperation, and looked forward to US-built nuclear reactors contributing to India’s energy security at the earliest.
In some ways, the context is similar and in more ways different. Like 10 years ago, the world’s oldest democracy and the world’s largest democracy are very keen to engage each other in a deeper embrace. From the time that Atal Bihari Vajpayee threw convention to the wind, and effected an abrupt change of course—freeing foreign policy from the constraints of misguided notions of non-alignment—the relations between India and the US have been dramatically reshaped.
The tragic terrorist strikes on the World Trade Center in New York were the turning point of Bush’s foreign policy. A year earlier Vajpayee, while addressing the annual United Nations general assembly, had warned the world that cross-border terrorism—like the kind sponsored by Pakistan—did not respect topography. Subsequent events and the world struggling to come to terms with new variants of such terrorist activity have only made Vajpayee’s statements that much more prescient.
As US attention shifted eastwards, with the primary focus being West Asia, India’s engagement with the US increased. All the more as the US recognized the importance of propping up India as a counterweight to rapidly emerging China. At one stage, the love fest between the two countries was virtually limitless. India’s soft power, led by Bollywood, even made a debut on Broadway even as its cuisine tickled American taste buds. It seemed like a win-win situation for both countries.
However, a regime change in the White House with the election of Obama radically changed the context of engagement. The Democrats, who have traditionally been less welcoming of India, were keen to undo the excesses of the Republicans-inspired foreign policy—relations with India became a casualty. To be sure, the first presidency of Obama was also shaped by the 2008 global economic crisis, which made rebuilding American business and restoring jobs the central focus.
Coincidentally, around the same time, the Indian economy was slowly going off the rails. Continued policy neglect had begun to take its toll. From a high of 9%, growth rapidly decelerated in the next few years even as inflation continued to accelerate from lows of 5%. Together, they were key to relations going south, plumbing a new low in the infamous episode involving the New York-based Indian diplomat.
So the Modi-Obama meeting takes place in a fundamentally different context. In Modi, who in a flourish of statesmanship ignored the previous diplomatic slights of the US state department for denying him a visa, you have a prime minister in his first year in office and raring to leave his stamp on foreign policy. In Obama, you have a president who has eroded most of his social capital and is being pronounced as a lame duck within the US. He too would be eager to garner some favourable headlines.
The Indian economy, like the US, is distinctly on the mend. So both sides have the option to strike business deals—or catalyse them by nudging the retinue of US chief executives accompanying the president to engage their Indian counterparts—where there are likely to be fewer disagreements. Unlike in 2005, India today is a sizeable economic entity with a gross domestic product of $2 trillion, though still very small compared to the $14 trillion US economy. But in India’s case, it is the potential that will be the key driver.
Just like the Indian economy, diplomatic relations between India and the US are looking at a second life. Rarely do such opportunities present themselves. Presumably both countries are aware and would seize the moment. At the least, they need to reset their relations to create a fresh and encouraging context to revive the momentum that was so apparent in the initial years of the third millennium.
Anil Padmanabhan is deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com
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