Finding a New Normal in U.S.-India Relations

To hear recent commentary on US-India relations, one would think observers were talking about a fraught relationship, full of crises between two countries with little in common and little interaction. This narrative, however, ignores the broader dynamics of the relationship, as well as how far it has come in a short period of time – it was only about a decade and a half ago, after all, that the US had sanctions on India in place.

Today, India’s relationship with the US is broader and deeper than ever before – yes, this is a cliché, but one that also happens to be true. Cooperation ranges from India buying C-130s from America to the US Centres for Disease Control helping their Indian counterpart establish an Epidemic Intelligence Service; it spans from sectors like education to economics. Bilateral trade and investment has increased; with over $120 billion in trade in goods and services, the US is India’s largest trading partner. Significantly, the economic relationship has been a two-way street. American companies have invested an estimated $50 billion in India and there’s an estimated $25 billion of Indian investment in the US. Bilateral defence trade has gone from zero to $10 billion dollars, with American companies wanting to sell more to India. In addition, in a few years, US liquefied natural gas exports to India are scheduled to begin.

Over the last year and a half, dozens of senior American and Indian policymakers from both the central and state levels have exchanged visits. It’s also no longer unusual for US governors (like those from Arizona and Kentucky) or mayors (like those from San Antonio and Indianapolis) to visit India or for chief ministers from India to travel to the US – even from landlocked states like Madhya Pradesh that haven’t traditionally been as globally connected. There are indeed so many dialogues, working groups, and visiting business and government delegations, that observers seem to lose track of the exact number.

On people-to-people ties, there are over 2.2 million non-resident Indians and persons of Indian origin in the US – more than in any other single country in the world. Furthermore, in poll after poll, the Indian public expresses support for good relations with the US, often urging that they be improved further. Indian officials, in turn, admit that these good relations and US interest in India has benefited India’s relations with countries like China, Japan and Saudi Arabia.

An Indian official recently referred to this existing phase of relations between the two countries as one of normalcy. Currently, however, despite all these links between India and the US, normalcy seems to have brought with it loud, public condemnations, a sense of drift, an emphasis on differences, and even a questioning of the value of the relationship. The challenge for the new government in Delhi – and the opportunity – will be in finding a new normal.

Any new government will first have to assess how significant the US is for India. It will have to ask the question: Is this bilateral relationship ‘India’s most important foreign policy relationship’, as the Indian ambassador to the US recently stated, or is the US at least one of India’s most crucial partners? There are reasons to answer yes. The US will matter for India – and not just for the positive reasons that policy-makers point out when they’re listing areas of convergence. Given the global role and power of the US – with an improving economy and in the midst of an energy revolution – even if Indian leaders are not convinced that the US can play a critical role in helping India achieve its strategic and economic interests, they will have to grapple with the fact that the US will play a role in shaping the environment in which India is operating and, potentially, could play spoiler vis-à-vis Indian interests.

Whether a relationship with the US is seen as important for positive or negative reasons, a new Indian government will have to deal with five dangers vis-à-vis the India-US relationship: drift, the dominance of differences, disillusionment, the difficulties of dealing with another democracy, and the dilution of India’s importance. It will also have to seek new opportunities to find a new normal that will benefit Indian interests.

Drift: Policymakers in both India and the US are likely to continue to be domestically preoccupied over the next few years. Strengthening the economy and creating jobs at home are likely to be priorities in both countries. In the US, the mid-term elections in November 2014 will be the main focus of political attention. Once that is over, the 2016 presidential election season will begin – some would argue that it already has. There’s a possibility that like his predecessors, President Obama will experience a lame-duck phase – one that could be challenging in terms of getting things done. However, it could also be an opportunity for India-US relations. American presidents are thought to have more flexibility on foreign policy during such phases, and if the president believes that a strong relationship with India will be one of his key legacies, he might be inclined to pay greater attention to it.

In the foreign policy realm, both India and the US will likely have more pressing concerns for the next few years. On the US side, the last two or three years have involved a focus on crises in the Middle East and Ukraine and, to a certain extent, in East Asia. As a result, many are wondering what happened to the pivot or rebalance to Asia in which the Obama administration had seen India as playing a crucial role. A new Indian government, in turn, might find itself preoccupied with foreign policy issues closer to home.

With limited bureaucratic capacity (time, energy, resources), these other foreign policy priorities and crises might constrain the amount of attention Indian and US policymakers can devote to India-US relations. Having recently experienced a diplomatic crisis and seen its impact on the relationship, neither country would like this kind of (negative) attention. However, absent crises or high profile initiatives (such as the nuclear deal) that can focus bureaucratic and political attention on the relationship, it might suffer from inattention.

Dilution of importance: Inattention can also stem from a sense that the other country isn’t as important – and the potential dilution of American importance in India and Indian importance in the US is a danger. Some doubters in India have questioned the value of getting closer to a country that they believe is on the decline.

The American investment in India, on its part, has been predicated on at least three assumptions. For some, it has been the idea of India that has been important – a diverse, developing democracy that could be a partner. For others, India’s economic potential has been what makes it attractive. For yet others, it has been India’s strategic potential, especially as a balance against China. India’s importance because of the latter, however, can wax and wane with the health of Sino-US relations or with assessments of India’s willingness and capacity. As for economic potential, there has been more doubt than hope on this front over the last three years. Recent developments have also meant that the India-as-a-role-model constituency is disappointed. All this has resulted in the devaluation of India’s stock in the US. This has been exacerbated by the fact that some of the strongest advocates of strong India-US relations in the US government have moved on to other positions.

Disillusionment: The two countries are also no strangers to disillusionment. Often this is a result of heightened expectations that are left unmet. The disillusionment problem is exacerbated because, in many cases, the returns on the investment in the relationship may only become apparent in the medium to long term. It perhaps also results from a phenomenon that one might call India-US exceptionalism: each of the countries involved not just thinks that it is exceptional, but that the other should make exceptions for it. Each also expects more from the other than perhaps any other of its allies or partners and expects that, as a fellow democracy, the other should understand its constraints. Each also seems to believe that the other does not understand its exceptionalism, leading to doubt and disappointment.

Differences: Over the last year such disillusionment has been evident, especially as differences have dominated the relationship – or at least the narrative about it. Over the next few years, these differences might continue to be in the spotlight instead of the bilateral achievements that tend to take place behind the scenes. Progress in terms of style (the bureaucracies developing habits of cooperation) or substance (in areas like intelligence sharing) are sometimes invisible. But even when progress is visible, achievements might get little, if any, attention – especially with the media seeming to believe that good news doesn’t necessarily make good copy.

A new Indian government could have to deal with potential differences with the US on a number of issues. The US relationship with Pakistan is one, especially with concerns that US actions in the run-up to the 2014 draw down of troops in Afghanistan will compromise Indian interests vis-à-vis Afghanistan, Pakistan and, potentially, counter-terrorism. As Washington continues to calibrate its relationship with Beijing, concerns about a China-US G-2 may also arise again. Similarly, Sino-Indian cooperation might create consternation in some quarters in the US. If US relations with Iran deteriorate again, that might be another area of difference, as might US-India divergences on other countries. Renewed activity in three multilateral arenas – trade, non-proliferation, climate change – might also bring India-US differences to the fore.

Finally, growing economic ties will mean that economic tangles will naturally increase. This has already been evident, with US companies and legislators complaining about domestic sourcing, the state of intellectual property protection, and taxation and regulatory policies in India. Indian companies, on their part, have expressed concerns about protectionism, immigration reform and market access in the US.

Dealing with another democracy: All these differences are likely to be complicated and exacerbated by an element that also facilitates the India-US relationship – the fact that both countries are democracies. This factor means that debates and differences will play out publicly, negotiations will take place under the gaze of a free press, and domestic politics will have to be navigated and negotiated.

Adding to the complications is another element that has driven good relations: the breadth and depth of relations between these two democracies. The quantitative and qualitative change in the relationship means that it involves more issues, interactions and stakeholders than ever before, making greater friction natural. The relationship also involves engagement on issues that span the foreign-domestic divide, including in the economic, energy, education and immigration realms. These issues will require policymakers to tread carefully, given that both countries are sensitive to outsiders trying to influence their domestic politics and policies.

However, the depth and breadth of the relationship also provides an opportunity for the new Indian government in its relations with the US. The nature of the relationship means there’s not only one particular person or department or company interested in a good working relationship. This is only one factor that creates opportunity. Second, there is bipartisan support for India in the US, particularly in the mainstream of the Democratic and Republican parties. Third, India can make the case that it is – especially through its companies’ investment in the US – contributing to US policy-makers’ economic goals.

Fourth, while in the US there are negative references to outsourcing and complaints about Indian trade and investment policies, India is not seen as a strategic threat. On the contrary, American policymakers have reiterated in public and private venues that the US supports India’s rise. Chinese observers indeed comment on the difference between Washington’s pronouncements vis-à-vis India and China in this regard. The reason offered for this support is that a strong, prosperous India will be good for US geopolitical and economic interests, even if this India won’t always be on the same page as the US and will sometimes create problems for it.

Fifth, there is a value-based reason that many in the US want India to succeed – this is where ‘the democracy thing’ plays a positive role. While American commentators often state that their country is unique, a strong, successful, democratic India – in some ways in its own image – is seen by some in the US as validation of the democratic idea and thus as a role model (the unstated part being the contrast to China). This is especially important at a time when democracy hasn’t been getting good press.

Taking advantage of these opportunities, however, will require avoiding the dangers mentioned above. A new Indian government will have to ensure that this relationship doesn’t just get bureaucratic attention, but that of the political leadership as well. There is a tendency to take this bilateral relationship for granted. But, natural as India-US relations might seem, without nurture they won’t get beyond the current state.

A new Indian government will also have to deal with differences. Differences are unavoidable; India and the US will differ at times, as all allies and partners do – sometimes the two countries will agree on ends, but disagree on means. However, India and the US have shown an ability to manage differences – for example, they successfully navigated the Iran sanctions issue in 2012, when US Congressional unhappiness with Indian oil imports from Iran could have caused serious tensions and loss of support for India on Capitol Hill. Working with American counterparts, Indian officials can also try to minimize the negative impact of differences, for example, through advance consultation and notification.

Officials can also deal with differences privately to the extent possible, without assuming the worst of the other side. Furthermore, it’s worth planning for the scenario of such differences becoming public. The next Indian government can’t make policy always thinking, ‘What will Arnab say?,’ but such planning will help if disagreements do dominate the headlines. And, when differences do become public, it would help if the two sides worked to temper the public discussion.

In dealing with another democracy, it would also help if the next government (and its American counterpart) tried to support – rather than undermine – the other side in dealing with various domestic constituencies. Sometimes, this will also require showing the same patience with the domestic political constraints their American counterparts face that Indian officials expect or request.

On a less defensive note, a new Indian government can also consolidate existing constituencies and create new ones for the relationship in India and the US among officials, legislators, corporations, and individuals outside government. First, it can strengthen the Indian economy and its security. This will increase India’s importance and alleviate the problems of ‘India fatigue’ and ‘India irrelevance’ in the US. Improved economic growth and a sense of momentum will be especially likely to change the narrative about India and India-US relations for the better. To put it bluntly, if India is once again seen as a winner, it will quieten the whiners. Moreover, it will change how countries around the world perceive India and an India taken seriously globally will be taken more seriously by the US.

Second, a new Indian government can work with the US to implement existing agreements, conclude outstanding negotiations and explore new opportunities, especially on the economic front. There are potential initiatives that can be taken in the trade and investment, defence trade, space, maritime, energy and education realms. There are regions, such as Southeast Asia or Africa or the Indian Ocean, where India and the US might consider working together on specific initiatives. What about a big-ticket item, which some have called for? Perhaps, but only if the associated agreements are not just negotiated, but implemented as well. A big idea unfulfilled, on the other hand, can lead to disillusionment – as with the two countries’ civil nuclear deal.

Third, the Indian government can create greater awareness of the opportunities India offers, as well as the constraints that exist in the country. There is a tendency in the policymaking community and the public in India and the US to assume that they know the other country. Yet one thing the recent crisis involving the detention of an Indian diplomat showed is how little the two countries know or understand each other, often reverting to long-held negative stereotypes in times of crises.

A new Indian government can encourage learning about contemporary India. It can facilitate study tours for influential Americans – and not just or even primarily for Indiawallahs. The next government can also ease the ability of a greater number of Americans to work and study in India – including by making easier the research and employment visa application processes and, perhaps, by encouraging the private sector to create a significant scholarship fund for US students designed to increase understanding of contemporary India. It should also promote greater learning about the US in India. There are few real experts focusing on the US in India – this needs to be rectified, especially if Indian government and business would like to understand the country in which and with whom they’re increasingly operating.

Finally, a new Indian government can act on initiatives to show specific US constituencies – especially political and corporate ones – that their investment in India can yield tangible benefits. Both India and the US need to get beyond asserting that the bilateral relationship is not transactional, while constantly asking of the other: ‘What have you done for me lately?’ Realistically, foreign relations are not altruistic; if the India-US partnership is to be sustainable and if the new normal is to be at a higher, more constructive level, each needs to feel that they derive or will derive benefit from it.

Taking advantage of some of these opportunities will help not just if and when an Indian government believes that the US will be a supporter vis-à-vis Indian objectives, but also if and when it proves to be – or has the potential to be – a spoiler.

This article was first published in
Seminar Magazine
.