Mr. Modi’s Dynamic Diplomatic Debut

Editor’s Note: This post is the second in a new series looking into the inner workings and complex bilateral relationships of the United States, China and India – which contain two-fifths of the world’s population and two-fifths of its GDP.

When the leader of the world’s largest democracy comes to America this weekend, he will complete an extraordinary season of diplomacy.

India’s new Prime Minister Narendra Modi has surprised many by quickly turning his attention to global affairs.  He took office in May after the biggest parliamentary victory India has seen in thirty years. He won by promising action on domestic priorities: cleaning up governance and restoring economic growth.

Still, his first four months in office have emphasized foreign affairs. And what a diplomatic whirlwind it has been – demonstrating both Mr. Modi’s vigor and his penchant for risk-taking.  First, he invited leaders from neighboring Pakistan, Sri Lanka and Bangladesh to his inauguration – amidst tense relations with all three.  He then set off to a summit with Japan’s Shinzo Abe and hosted a state visit by Australia’s Prime Minister Tony Abbott.

Mr. Modi seemed intentionally to be setting the stage for his two most important summits – welcoming China’s Xi Jinping to India last week, and then travelling to the United States this week to attend the UN General Assembly meetings and then meet with President Obama.

So far, Mr. Modi’s diplomatic surge has been well received in India.  Across the country – north, south, east and west – his election has uncorked an intoxicating optimism.  His summer of summitry has been popular because trade and economics have been his core message.  In my own recent trip across India in early September — traversing six cities in twelve days – I met with government officials, BJP and Congress Party members, business leaders, journalists, policy analysts, academics and students. Even Mr. Modi’s opponents concede that the nation’s mood is changed, and many are willing to help seize the moment to advance India’s future, at home and abroad.

In particular, nearly everyone I met with felt that Modi should pursue deeper economic ties with both China and the United States.  But many Indians hold reservations about both relationships.  Will both nations continue to extract too high a price economically for engaging with India?  Will China continue to test India’s national security mettle? Is the United States truly an ally? Or will India perpetually be disappointed with the United States, and vice versa, despite our shared values and shared interests.

Mr. Modi seems to be diving into these relationships with his characteristic energy and penchant for risk-taking.  So far, he has managed to capture the imaginations of Indians, even if the diplomatic meetings have revealed that India’s world will not change overnight.

India-China: Handshake Across the Himalayas – or Stiff-Arm?

Consider the recent China-India summit – dubbed the “Handshake Across the Himalayas.” At the top of Mr. Modi’s agenda was pursuit of Chinese investment in India.  India already has a growing trade relationship with China, which could reach $100 billion in coming years – though India runs a large bilateral trade deficit.  Xi Jinping announced at the summit that China will invest as much as $20 billion in India’s infrastructure over the next five years. That would benefit not only India, but also American investors. That said, the new investment pledge would not even cover one eighth of India’s current annual trade deficit with China, which could continue to grow in the next decade.  And the pledge fell far short of the $100 billion, ten-year, deal that China’s top diplomat in Mumbai had been suggesting on the eve of the summit.

Moreover, the summit demonstrated that trade and investment constitute only a portion of the Sino-Indian relationship. The summit was marred by reported Chinese incursions across a disputed border high up in the Himalayas.  Mr. Modi learned of the incursions only after having greeted Mr. Xi for their first meetings.  Even if this particular incident was a surprise, broader tensions could be felt in the days leading up to the meeting.  Indeed, Mr. Modi may have brought some of this on himself, having spoken openly in Japan about their shared democratic values and the need to resist rising imperialist powers – subtle but clear pokes at China.  India’s national security establishment continues to voice deep distrust of China.  Many hope that a stronger Indian relationship with Australia, Japan and the United States will help provide security guarantees – even if this might simply reinforce China’s fear that it is being encircled.

The India-U.S. Summit:  Coming to America … Finally

Having achieved mixed results in his summit with China, Mr. Modi hopes to project a confident sense of leadership to President Obama, to business and civil society leaders, and to the American people. He will meet with captains of industry in New York, and then likely will draw the largest crowd ever for a foreign leader when he speaks to a forecasted 18,000 people at Madison Square Garden.  There is a subtle irony in this, given the fact that Mr. Modi could not get a visa to visit the United States prior to his election in May – thanks to the riots that took place in his home state of Gujarat in 2002.

Mr. Modi can use this visit as an enormous re-branding moment not only for himself, but also for Indian business, and for the U.S.-India relationship.  India’s own vibrant media will, of course, spare no expense to hype the event. The American and international media will take that one step further. Each gesture will be magnified beyond proportion.

The American audience will be a guardedly hopeful one. People-to-people ties are already great and deep. Our common democratic values and heritages bind us. Recent polls showed that India ranks high in American public opinion. Indians are the third largest immigrant group in the United States. Nearly two out of three high-tech visas to enter the U.S. go to Indians, and India is now just behind China in sending the highest number of foreign students to American universities. Our trade relations have grown dramatically – particularly in services and innovative technologies, where Indian entrepreneurs and engineers have driven our software and biotech revolutions. And a number of foreign investors are keen to be part of India’s coming economic revival. For those reasons, among others, there is wider and deeper bipartisan support for U.S.-India ties than for practically any other major bilateral relationship.

Moreover, the general perception so far of Mr. Modi is quite positive. His victory received great attention in the U.S., particularly for the size and scope of his majority, and that provides him with an opportunity to cut through the complexities of party and regional politics. He is known as the man who has been able to unify India. The American public (and most of Washington) is largely unaware of the past visa controversy – though Mr. Modi and his team remain particularly sensitive to it.

This relatively clean slate is actually as much a problem as an opportunity. It is a function of the short attention span of our media and public. The American public, business leaders and foreign policy communities have largely been obsessed with events in Ukraine and in the Middle East – shifting public attention away from India. If anything, most Americans consider India to be a fascinating and complex nation, but one too far away and too complicated to try to embrace, let alone commit political capital to addressing as a top priority. Despite the natural strengths in the relationship, few wonder why our nations do not work together more closely. It is simply accepted as a lost opportunity.

Bringing It All Back Home

Mr. Modi still faces domestic obstacles in translating aspiration into action – particularly when it comes to signing any deep bilateral policy arrangements. He has a commanding parliamentary majority and can avoid the complications of coalition politics in India’s lower house, but Mr. Modi will have to come to terms with an upper house which the BJP does not control, and which represents the enduring authority of states. Moreover, his party only controls five state governments, and state leaders are not only essential in domestic action, but increasingly important players in foreign affairs. These are not insurmountable obstacles, particularly for a man who built his reputation at the state level, but they will require Modi to spend political capital.

As a result, Mr. Modi has been slow to settle on a domestic governance strategy, let alone a core team of trusted advisors. New Delhi is rife with rumors about who is in his inner circle, and who is not.

Internal stock-taking and power shuffling helps to explain why few major agreements are likely to be forthcoming at this summit. Upper house approval is required on many of the issues for which the U.S. is seeking action (i.e. defense cooperation, WTO trade facilitation, nuclear liability for manufacturers, multi-brand retail, etc.) At the end of the day, he may have the power to move on nearly any of these. But he is biding his time in choosing.

On the economic side, however, Mr. Modi must communicate clearly that India is confident and open for business. Unresolved trade issues lead many American businessmen to believe that India fears foreign trade and investment – from the stalled Trans-Pacific Partnership and WTO talks, to protective barriers to greater foreign investment, to failure to advance civilian nuclear cooperation. Energy security and climate change cooperation is another area where India has an opportunity to move from acting defensively to taking the kind of proactive steps Mr. Modi took in Gujarat. These are issues that both Mr. Obama and Mr. Kerry consider to be priorities and would be eager to work on with Mr. Modi given his track record. Moving any one of these issues forward could help build a wave of support for greater cooperation on the others.

Constrained but Eager Parties

American officials want to improve the relationship, which is why three cabinet secretaries have travelled to India in the last four months.

Greater defense cooperation is clearly one area that has support in both India and the United States, as does political cooperation in combatting violent Islamic fundamentalism. That would normally be the case, but is especially so given events in the Middle East in recent weeks and months – and widespread reports that both ISIS and Al-Qaeda are openly recruiting in India. More broadly, India’s good relations with both Israel and Iran present an opportunity that could be developed.

Of course, the United States needs to do its part in the relationship. Many Indians know that India needs to move on a number of economic issues, though they still believe that senior U.S. officials can still do more to help clear hurdles on issues such as civilian nuclear cooperation or WTO trade facilitation. In many regards, President Obama faces greater constraints than Mr. Modi. A string of national security challenges are, together, reluctantly drawing him away from his domestic priorities. His relationship with the Congress is toxic, and mid-term elections are just one month away. Even some basic functions of government are blocked (such as getting ambassadors confirmed), let alone his domestic priorities. Still, if Mr. Modi shows that he is serious about resolving any one of the various issues listed above, American officials will likely work to meet him half-way.

Mr. Modi’s opportunity is to cut through India’s haze of political dysfunction. He should start by emphasizing the common bonds between our nations. He should project his optimism and pragmatism, to which President Obama has an opportunity to respond. A long-term mindset is critical here. In a shallow and vicious media environment, it is equally important to demonstrate that India and the U.S. have begun a journey together.