India and America: Comfort and Candor or Interests and Indisposition?

With its domestic climate hyperpolarized between the ruling Bharatiya Janata Party and the Congress, India is attracting bi-partisan support in the U.S.

Although more accommodative towards the International System, India still cherishes foreign policy autonomy. Beyond the ‘world’s greatest and oldest democracies’ narrative, times are changing.

But to what extent?

Defense

When addressing Congress, Prime Minister Narendra Modi mentioned Gandhi’s influence on Martin Luther King Jr. and Dr. Ambedkar’s incorporation of ideals like liberty and equality into the Indian Constitution. These cross cultural and political parallels strengthened post 1947 Indo – American ties.

In 1971 the lowest ebb between these two countries ensued when Richard Nixon deployed the U.S.S. Enterprise into the Bay of Bengal. This paved the way for Russian naval sales to India and Indo-Israeli defense cooperation.

45 years later Modi eased Foreign Direct Investment norms by allowing up to 49 percent international ownership in the defense sector. This has now been relaxed to 100 percent. Senate India Caucus co-Chairs Mark Warner (D-VA) and John Cornyn (R-TX) see this as a welcoming gesture.

The 2012 Defense Technology and Trade Initiative furthered conversation on bilateral cooperation. Thereby, America recognized India’s role as an emerging leader.

Plus, with increasing bilateral Department of Defense/Ministry of Defense visits, India purchased $14 billion worth of military aircrafts (C130s , C17s transport planes, Poseidon [P-8] maritime reconnaissance jet, and various heavy-lift helicopters).

Sales for $3 billion worth of Boeing helicopters, talks with Lockheed for F16s, and other prospects have turned India into the second largest U.S. Weapons buyer after Saudi Arabia. Senator Warner highlighted potential areas for joint partnership and co-development of Indian defense capacity for drones and advanced missile systems.

Commerce

Nine years after the 1991 liberalization, trade between the two equaled $19 billion. An Indian economy with seven percent annual growth is a boon for enticing trading partners. Eight years later, the 2008 India – United States Nuclear Agreement gave way to commercial links. U.S. investment in India totaled $8 billion and is now $28 billion whereas equity investment has increased from $7 billion to $12 billion.

With trade amounting to such numbers, other prospective engagement avenues for which P.M. Modi continues to build domestic support include digital technology, renewable energy, and startups.

But despite the newfound common ground, certain differences linger.

Regional Security, Af-Pak

Of regional importance between these two is the desire for a peaceful Afghanistan. Though Modi extolled the virtues of this commonality, Indian activity in Afghanistan is asymmetrical to that of America’s. If a Made By India initiative were launched alongside Make in India, the Afghan Parliament and Salma Dam would be significant achievements.

But American activity in Afghanistan goes beyond reconstruction and veers more towards state building. Unfortunately, these efforts supplemented by internal instability contributed to a Taliban revival.

While India’s interests in Afghanistan are more regional than global, the budding allies are in solidarity against Pakistan nurturing fringe Islamic outfits for political mileage. In the campaign against terror, both countries have found reliable allies in each other.

Convergence and Divergence

The Modi-lead N.D.A. government has made energy strides in its first two years. For the first time since Independence, India will have an electricity surplus next year. While not monumental by American standards, for a country with the world’s third largest coal reserves, it is a step forward in removing incessant blackouts preventing the country from achieving its potential.

Basic amenities like stable electricity are bedrocks on which advance countries are built upon. The year 2016 also saw fiscal accomplishments such as reduction in coal imports by $4.5 trillion due to increased domestic production.

However, detracting from achievements are communal incidents that can be attributed to B.J.P.’s parent organization, Rashtriya Swayamsevak Sangh. These incidents surfaced even after President Obama alluded to Hindutva fanaticism in 2015. Episodes like the lynching of a Muslim in rural Uttar Pradesh for alleged cow slaughter or aggression against religious minorities keep recurring.

F.D.I. norms in relevant sectors (construction, real estate, defense) were eased following a dismal B.J.P. showing in the 2015 Bihar Assembly elections. Modi lieutenant and party President Amit Shah’s communally charged campaign contributed to that defeat. Reports of excessive B.J.P. scrutiny with film censorship have also dominated headlines.

https://www.youtube.com/watch?v=1K2OFeoTX3M

Hence, the Prime Minister needs to balance an inclusive growth agenda and his party’s Sangh patronage.

Only then can Modi “empower India’s youth through many social and economic transformations in 2022.”

Both countries will have to tactfully navigate each other’s distinct political economies for this $500
billion trade relationship to fully materialize. 

India’s F.D.I. capped below 51 percent leaves a lot to be desired by American business/policy elites. 
Certain officials have called for India’s inclusion in the Asia Pacific Economic Forum, but that
remains a pipe dream.

Ultimately, the three letters F, D, and, I will dictate the course of this relationship.