The Eagle & the Tiger: from Estrangement to Engagement

China’s ascent to “great power” status in less than three decades surprised many, and has served to make Western policymakers increasingly skeptical of any developments within the Asian continent. Thus, a lot of questions have been raised in recent years regarding India’s “great power” aspirations. India’s rich civilization and history together with an expanding middle class and a significant boost in defense and power projection capabilities have served as the primordial factors behind New Delhi’s claims to “great power” status. However, as Dr. Aparna Pande, Director of the Initiative on the Future of India and South Asia at the Hudson Institute, laid out on her testimony before the House subcommittee on Asia the Pacific, “Indian leaders have always seen their country as one that will play a role on the global stage but primarily in Asia. The belief in India as an Asian leader and an example to Asia has been deeply ingrained in Indian thinking for centuries.” While India has been characterized as an “indispensable partner” of the United States, frictions have mounted between the Trump administration and Narendra Modi’s government over a wide range of issues, and some are now warning that the growing differences between Washington and New Delhi could undermine what had been a deepening strategic relationship.

Washington proved to learn from the mistakes made in the end of the past century that resulted in China’s rise, and was quick to recognize India’s increasingly central role and ability to influence world affairs. As a Congressional Service report on U.S.-India relations points out, “the U.S. Congress and two successive U.S. Administrations have acted both to broaden and deepen America’s engagement with New Delhi.” Such decision comes as U.S policymakers believe a stronger and more prosperous India is favorable for America’s objectives in the Asian continent and in the international system as a whole. Washington considers India a crucial component of its long-term security strategy for Asia, which involves increased defense co-operation between Australia, Japan, the US and India to circumvent growing Chinese influence in the region. Since 2005, when Washington and New Delhi launched a “strategic partnership” along with a framework for long-term defense cooperation, to engagement between both nations has considerably increased. The shift from the Cold War era estrangement to the engagement of the twenty-first century has resulted in a sharp rise in bilateral trade and investment - the US was India’s leading importer in 2018 with 16% of total Indian exports, and bilateral trade between both nations has more than doubled to $142 billion in 2018.

However, more engagement has served to bring about renewed areas of friction between both nations. From India’s deep-rooted protectionism and unpredictable regulatory policies to PM Modi’s desire to purchase the S-400 air defense system from Moscow, tensions between Washington and New Delhi have grown significantly over the past few months. The primary area of friction between both countries refers to the nature of India’s economy, which is slowly reforming, but continues to be a relatively closed one, with barriers to trade and investment deterring foreign business interests. Since the 2016 Presidential election, many pundits feared that India’s inherent protectionism would be scrutinized by President Trump, and as a result would deteriorate U.S.-Indian relations to levels that have not been seen since India’s first nuclear test in 1974. Such fears proved to be true as President Trump has consistently denounced India’s protectionist economic policies as the driving force behind the $24 billion trade deficit between both countries. In keeping with his campaign promise of re-negotiating all of the U.S.’s “terrible” trade deals and enacting only “free, fair, and reciprocal trade” agreements, President Trump rescinded preferential trade privileges through which $5.6 billion worth of Indian goods had duty-free access to the U.S. market. Which caused New Delhi to retaliate by imposing import tariffs on more than 25 American goods - primarily from the agriculture sector - with a total value of around $1.4 billion.

President Trump’s views on the recent trade disputes between both countries is perfectly exemplified in of  the President tweets, where he wrote that he looked forward to meeting PM Modi during the G-20 summit in Osaka, Japan, to discuss India’s “high tariffs against the United States.” The President went on to state that New Delhi’s decision to enact new tariffs on a number of U.S. goods is “unacceptable” and that such “tariffs must be withdrawn.” Prior to both leaders meeting in Osaka, Secretary of State Mike Pompeo visited New Delhi in order to ease the recent hostility between both countries and lay the groundwork for fruitful talks during the G-20 summit. During his visit, Secretary Pompeo stated that while their partnership is “already beginning to reach new heights,” even “great friends are bound to have disagreements.” 

According to reports regarding President Trump’s encounter with PM Modi on the sidelines of the G-20 summit, both leaders discussed “various aspects of mutual interest.” After the meeting the White House tweeted that “President @realDonaldTrump and Prime Minister @narendramodi of India shared ideas to reduce America’s trade deficit, enhance defense cooperation, and safeguard peace and stability throughout the Indian Ocean and Pacific region.” PM Modi followed the White House statement by tweeting that “the talks with @POTUS were wide ranging. We discussed ways to leverage the power of technology, improve defense and security ties as well as issues relating to trade. India stands committed to further deepen economic and cultural relations with USA.” It is difficult to predict what the future holds for the U.S.-India relationship, but by solely comparing President Trump’s tweet prior to the G-20 summit and the White House statement after the meeting, one could point out that the leaders’ one-on-one went a long way in cooling down the rising tensions between both nations.

According to Amy Kazmin, the Financial Time’s South Asia bureau chief, “as the two countries navigate these differences, their strategic partnership could well hang in the balance.” While it is fully understandable that President Trump must keep his campaign promises and strive for “free, fair, and reciprocal trade” agreements, it would not be a smart diplomatic move to create a rupture in Indian-American relations because of disagreements over trade and national deficits. At times where China’s economic and military might have sharply increased, the U.S. must tighten its relationship with the world’s second most populous nation as a way to counter the Chinese march. India is a vital player to any security mechanism designed to contain President Xi’s ambitions in Asia and in the world as a whole, and it would be a severe miscalculation by the Trump administration to alienate New Delhi from the fight against China’s dystopian world order.

Photo Credit: AP