It’s indeed a grave tragedy that Rahul Gandhi chose to undermine the authority of the Prime Minister when he was about to embark on two important diplomatic missions: trying to salvage US-India ties and setting a new tone on Indo-Pak relations. Of course, both these missions were overshadowed by the Congress Vice President’s messianic zeal to place himself above the nitty-gritty of Indian politics when he bombastically declared that the ordinance to protect convicted MPs and MLAs the Prime Minister had approved of before his departure was “nonsense” and should be “torn up and thrown out”, and, in the process, the damage to Indian diplomacy was substantive. Manmohan Singh’s visit to the US was a much-hyped moment for which ground work had been laid by the visits of the US Vice President, Joseph Biden and Secretary of State John Kerry to India earlier this year. They were keen to reassure New Delhi that Washington remains keen on a robust partnership with India.
These are difficult times for the US-India bilateral relationship which has been flagging for quite some time now and there is little likelihood of it gaining momentum anytime soon. The growing differences between the two today are not limited to one or two areas but are spread across most areas of bilateral concern. These include market access issues, the problems in implementing the US-India civil nuclear accord, the US immigration changes, changing US posture towards Afghanistan, defence cooperation and trade.
During Singh’s recent and probably last meeting with the US President, no progress was made on any of the issues. All Singh could do was reiterate India’s concerns over terror emanating from Pakistani soil and the need for Islamabad to rein in elements responsible for the violence. Obama politely thanked Singh “for what has been a consistent interest in improving cooperation between India and Pakistan.”
The boost to defence cooperation in the joint declaration is certainly an important development as India and the US both want to move away from a buyer-seller relationship to one that focuses on co-development and co-production of defence technologies. As per the joint declaration, “the United States and India share common security interests and place each other at the same level as their closest partners.
This principle will apply with respect to defence technology transfer, trade, research, co-development and co-production for defence articles and services, including the most advanced and sophisticated technology.” The US-India military ties have also got a major boost with India deciding to participate in the 2014 Rim of the Pacific exercise in Hawaii. But it remains far from clear if this will be enough to lift the sense of despondency that pervades in Washington about India as a potential strategic partner.
That the US has been clearly concerned about the Indian economic slowdown was reflected in Biden’s comments when he had come to India. He had exhorted New Delhi to try to take bilateral trade with the US to $500 billion by removing trade barriers and inconsistencies in the tax regime.
He recommended more measures like recent relaxation in the FDI rules by underlining “caps in FDI, inconsistent tax system, barriers to market access, civil nuclear cooperation, bilateral investment treaty and policies protecting investment.”
Investor confidence in the Indian economy, Asia’s third largest, is at an all time low with growth slowing down to its lowest level in a decade. Foreign direct investment slid about 21 per cent to $36.9 billion last fiscal year compared with 2011-12. The US is keen to see India remove investment caps in sectors including finance, retail and insurance. The US corporate sector has been up in arms in recent months about India’s trade policies, complaining that American firms are being discriminated against and the US intellectual property rights are being undermined by India.
Sporadic outbursts of reform measures from New Delhi have not been enough to restore investor confidence in India even as Indian policy-makers are now busy trying to secure their votes for the next elections. Policy-making in India remains paralyzed and haphazard with Washington getting increasingly frustrated with the Indian government’s lackadaisical public policy.
For its part, the Indian corporate sector has been concerned about Washington’s plans to increase the number of temporary visas and green cards to highly skilled workers from India.
Meanwhile, the civil nuclear deal is floundering as US companies remain wary of Indian laws on compensation claims in the event of a nuclear accident. India’s nuclear liability law is aimed at ensuring that foreign companies operating in Indian nuclear sector assume nearly unlimited liability for accidents, a condition that all but precludes the participation of US firms.
After all the political and diplomatic investment that Washington made in making the nuclear deal happen, there is a pervading sense in the US that the returns have not been at all impressive.
New Delhi remains concerned about the impact of US withdrawal from Afghanistan for Indian security. Washington has tried to ease Indian concerns on Afghanistan by underlining that the Taliban would have to give up ties to al-Qaeda and accept the Afghan constitution as part of the reconciliation process.
Though it may be true that “there are no obvious places where Indian interests and American interests diverge worldwide, regionally or domestically,” in an absence of a big idea to push the relationship forward strategically, the tactical issues where there are significant differences between Washington and New Delhi continue to shape the trajectory of the US-India bilateral ties.
The relationship stands at a serious inflection point. Manmohan Singh’s visit was an opportune moment when the two sides could have imparted a new momentum to their ties. But Singh’s visit was scuttled by his own party. At this moment of significant geostrategic flux in the Indo-Pacific, India and the US need each other like no other time in the past. But the nation will have to wait till next elections now for a new leadership to decide what role it sees for the US in its foreign policy matrix and as a corollary what role it sees for itself in the rapidly changing global order.
The author teaches at King’s College, London