Indian Prime Minister Narendra Modi’s second visit to the United States within a year is another solid step towards strengthening the strategic partnership between the United States and India. During his weeklong trip this past September, Modi addressed the United Nations Sustainable Development Summit, took part in a peacekeeping meeting hosted by President Barack Obama, and met with a multitude of world leaders. [i] Over the course of the visit, Modi emphasized India’s stance on sustainable development and role in peacekeeping missions. He also campaigned for India’s permanent membership in the UN Security Council – a request the United States supports.
The most notable aspect of Modi’s visit involved his meetings with a number of key business leaders, including Apple’s Tim Cook and Facebook’s Mark Zuckerberg. The meetings underscore Modi’s attempts to boost India’s “Make in India” and “Digital India” initiatives, as well as to drive entrepreneurship and innovation-focused engagement with the United States. This initiative offers enormous potential for investments in technology manufacturing and job creation.
Today, relations between the United States and India are based on the values and principles of democracy and revolve around the strategic and economic realities of the 21st century. However, it has not always been so. During the Cold War, tense international political dynamics stalled relations between the two countries. Now, freed from the ideological baggage of the Cold War, the U.S. and India have taken steps to carve a strategic partnership. Mutual security interests have arisen out of a desire to balance a militarily powerful China and to tackle the threat of Islamic terrorism. Additionally, growing business collaboration, the presence of an influential Indian-American lobby, and India’s economic liberalization have facilitated interactions between the two countries. Despite several setbacks in the last couple of years mainly due to disagreement on the nuclear liability bill, India’s ineffective foreign policy, U.S. foreign priorities, and to complicate things further, a row over the arrest and strip search of Indian diplomat Devyani Khobragade, the relationship built over the last 15 years has resulted in a close U.S.-India partnership, a nuclear energy deal, defence cooperation, joint military exercises, security and counter-terrorism collaboration, and a deepening strategic and economic partnership.
Towards an Economic Partnership
The timing of Modi’s visit to the United States is significant, coinciding with a U.S. economic upswing and a 7 percent growth rate in India under “Modinomics”.[ii] In particular, Modi’s steps to streamline bureaucracy and reform the economy are bearing results. Over the last fiscal year, India’s GDP has grown and its manufacturing and service sectors are further developing.[iii] Confidence in India’s economic growth prospects among private businessmen and foreign investors is similarly increasing.
While the U.S. automotive and defence industries have already tapped into India’s manufacturing sector, Silicon Valley investments in India’s manufacturing industry have boosted India’s ‘Make in India’ and ‘Digital India’ campaigns.
Modi, elected on a platform of developing the economy, must live up to his promises by creating millions of jobs for India’s young population.[iv] His high profile foreign visits and proposed economic reforms well demonstrate his efforts to attract foreign investors.
Given its growing economy, increasingly tech-savvy middle class, and internet-connected population, India offers the fastest growing technology market in the world. U.S. companies are searching for new markets, and India’s low-cost, well-educated, English-speaking workforce is attractive to investors. Business collaboration between the United States and India therefore has considerable potential.
Trade between the United States and India has grown significantly in recent years. Constituting a crucial element of U.S.-India relations, bilateral trade in merchandise goods has witnessed a tenfold increase from $5.6 billion in 1990 to $103 billion in 2015. However, given the volume of each country’s GDP and population, the current volume of U.S.-India bilateral trade falls short of its potential. Part of this is due to protectionism and asymmetrical capabilities and strength between the two countries.
India continues to face number of problems. Issues of land acquisition, the Goods and Services Tax Bill, and energy have been major concerns for prospective American investors. [v] India’s biggest challenge continues to be facilitating business, further hampered by India’s underdeveloped IT infrastructure.
Connecting with the Indian Diaspora has become one of Modi’s top foreign policy priorities. Past Indian governments have tried to harness the potential of Indian expatriates, but no Prime Minister has been able to connect with them as well as Modi. The United States is home to a highly influential and affluent Indian community that has formed a number of political organizations, all of which have helped establish a strong Indian lobby in the United States.
By countering anti-India propaganda and lobbying during India’s nuclear test in 1998 and the passage of the U.S.-India Civilian Nuclear Agreement Bill, the Indian lobby has demonstrated its clout on Capitol Hill.[vi] However, in the post nuclear deal phase, the presence of the Indian lobby in Washington took a backstage. This shift has not gone unnoticed by Modi’s administration. During his visits to the United States, Modi met the key members of the Indian lobby and other influential members of the Indian-American community, encouraging them to reinvigorate India’s presence in Washington.
Strategic and Security Spectrum
The increased significance of U.S.-India relations also relies on factors beyond economic considerations. During their latest roundtable discussion, Prime Minister Modi and President Obama assessed the progress of their countries’ strategic partnership in the security realm, stressing the need to focus on clean energy, climate change, and defence issues.
The emerging strategic geometry in the Asia-Pacific region has aligned the interests of the United States and India over the past decade. Also, the radicalisation of Muslim youths by terrorist groups has become one of the most challenging security problems facing both countries. Despite their counter-terrorism cooperation and measures, both countries remain vulnerable to terrorist organizations such as the Taliban and ISIS, which continue to radicalise Muslim youths and commit terrorist attacks on foreign soil. [vii]
The partnership is particularly significant within the emerging 21st century power politics. China remains a concern of both countries. While America’s concerns emanate from China’s presence in the Western Pacific and the South China Sea, India’s concerns stem from China’s encirclement strategy and nuclear defence partnership with Pakistan. More than half of China’s arms exports currently go to Pakistan — an alarming statistic for India. Sino-Pakistani bonhomie is also threatening to U.S. interests in the region. The Pakistani Government’s links to terrorist organisations and its growing nuclear and defence ties with China are also sources of alarm for the United States.
Furthermore, both the U.S. and India have continued to grow their economic ties with China. However, despite China’s claim of having peaceful intentions, the two countries continue to see Chinese military activities as a threat. The U.S.-India partnership is essential for a peaceful order in the Asia-Pacific region.
India’s relationship with the United States is one of the most successful partnerships in the post-Cold War era. No longer constrained by Cold War politics, two of the world’s largest democracies have built a comprehensive relationship in the emerging strategic geometry of the Asia-Pacific region. Additional efforts to elevate economic ties augur well for the future of any U.S.-India partnership, which is in and of itself certain to have a considerable impact on the global politics of the 21st century.
[i] “PM Modi’s US Visit,” The Times of India, http://timesofindia.indiatimes.com/pm-narendra-modis-us-visit/specialcoverage/49022653.cms
[ii] Sven-Eric Fikenscher, “Taking Stock of Modinomics: India’s Economic Course One Year Later,” Diplomat, 10 June 2015, http://thediplomat.com/2015/06/taking-stock-of-modinomics-indias-economic-course-one-year-later/
[iii] “Government of India, Ministry of Finance,” Press Information Bureau, 29 May, 2015 http://finmin.nic.in/pressroom/2015/MoFresponse_CSO29052015.pdf
[iv] Ashok Sharma, " A Shift from Identity Politics in the 2014 India Election: The BJP towards Moderation" in Einar Thorsen and Chindu Sreedharan, India Election 2014: First Reflections (Centre for the Study of Journalism, Culture and Community at Bournemouth University, 2015), Pp. 15-29.
[v] “Achieving economic potential: Easily doable steps Modi government can take to boost growth,” The Economic Times, 11 September 2011, http://articles.economictimes.indiatimes.com/2015-09-11/news/664346791india-inc-economic-growth-pm-modi
[vi] Ashok Sharma, “Indo-American Lobby Boosted Ties,” The Sunday Guardian, 25 January 2015, http://www.sunday-guardian.com/extra/indo-american-lobby-boosted-ties
[vii] For detail on India-U.S. counter-terrorism see, Ashok Sharma, “Counter-terrorism Cooperation in the Indo-US Strategic Framework,” India Quarterly Vol. 68, No.4 (2012), Pp. 315-330 ; Bruce Riedel, “Strengthening Counter Terrorism Cooperation Against Growing Turmoil,” Brookings, January 2015, http://www.brookings.edu/research/opinions/2015/01/20-strengthening-us-india-counterterrorism-cooperation-riedel