Siddharth Varadarajan

Journalist | Writer | Analyst

Why John Kerry’s Great Expectations Won’t Be Met By India

July 30, 2014

Siddharth Varadarajan

The catechism of an “indispensable partnership” with India that U.S. Secretary of State John Kerry repeated during the course of a rambling 5000-word speech on Tuesday cannot cover up the loss of faith that has crept into the relationship between the two countries.
Kerry was speaking at the Center for American Progress in Washington, D.C. hours before his departure for New Delhi as the head of the U.S. delegation in its fifth annual Strategic Dialogue with India.

Even without the added obstacle of having to reach out to an Indian leader that it had visibly snubbed for nearly a decade, the United States administration knows its ‘strategic partnership’ with India has lost both direction and momentum in recent years and getting it back on track will not be easy. There are four broad reasons for this.

First, Washington is disappointed by New Delhi’s refusal to bend its laws and procedures in order to accommodate American commercial interests in the field of nuclear energy, pharmaceuticals, retail and financial services, and military hardware. India, on the other hand, is dismayed by the transactional approach the White House has taken towards a relationship that was meant to be about so much more.

This mismatch of expectations might not have been fatal were it not for a second factor – the slowdown in the growth rate of the Indian economy. The slowdown has served to limit the kind of opportunities U.S. companies thought they would have from India as an emerging economy. It has also made them more impatient. The U.S. wants India to back efforts at the World Trade Organisation aimed at front-loading Western economic priorities even as issues of concern to the developing world are relegated to the back burner.

Third, the regional and global situation has become even more fluid and complicated in the past few years and this has tended to lower the salience of this ‘indispensable partnership’ in the eyes of both partners. In none of the trouble-spots the U.S. is currently wrestling with – the Ukraine, Syria, Gaza and Iran – does the Barack Obama administration believe India has any constructive role to play. And though India recognizes the key role Washington is playing in Pakistan and especially Afghanistan, New Delhi knows it needs a wider set of partners to hedge its bets in a world that is increasingly riven by uncertainty.

There may be some strategic congruence over emerging security challenges in the Asia-Pacific but India knows the American return to Asia has asymmetry and instability built into its very concept. All countries concerned about the rise of China are expected to contribute to the strengthening of the U.S. military pivoting the region; but if tensions with Beijing escalate for any of them, they will be left to deal with the consequences of this on their own. India also knows a tighter, NATO-type structure is the last thing it needs and that it has to deal with the reality of Chinese power through a combination of engagement and creative bandwagoning. This means siding with some countries against Beijing when the occasion warrants such an approach, and joining hands with China on big-picture international issues when so required. India’s pursuit of ‘Nonalignment 2.0’, as some of us in India have called this approach, irritates Washington. But under the present international situation, there is no other strategy that will give the country as much strategic space as this.

The fourth element casting a shadow over the relationship is relatively recent and involves revelations about the aggressive surveillance of Indian entities, including the ruling Bharatiya Janata Party, by the U.S. National Security Agency. No self-respecting country can keep quiet in the face of what is now known about the extent of American spying. The response of Manmohan Singh to Edward Snowden’s revelations in 2013 was meek and timid; the Narendra Modi government is not expected to be so understanding.

Given the sensitivities involved, only two of these four problems figured directly or even elliptically in Mr. Kerry’s pre-departure speech.

In a reference to the American demand that India amend its Nuclear Liability law to insulate U.S. nuclear vendors from paying damages in the event of a nuclear accident involving defective equipment, Kerry spoke of the need to “build on the U.S. India Civil Nuclear Agreement, so that American companies can start building and can start providing clean power to millions in India.”

We know the U.S. has put India on a blacklist of countries whose patent laws are (supposedly) inadequate because they prevent Big Pharma from ‘evergreening’ – i.e. introducing minor variations in patented formulations that delay the entry of cheaper generics. Kerry flagged the issue in the following way: “If [the Modi government] provides strong intellectual property rights, believe me, even more American companies will come to India. They may even race to India.”

He also didn’t mince his words on the trade front. “As we work with our trading partners around the world to advance trade and investment liberalization, India has a decision to make about where it fits in the global trading system,” Kerry warned. “India’s willingness to support a rules-based trading order and fulfill its obligations” – a clear reference to the Modi government’s decision to stall the signing of the Trade Facilitation Agreement at the WTO on July 31 – “will help to welcome greater investment from the United States and from elsewhere around the world,” he added.

Kerry’s visit is aimed at preparing the ground for major Indian concessions on these three fronts. In particular, Washington is laboring under the illusion that a ‘strong’ Modi government does not face the same legislative or political constraints that prevented Manmohan Singh from accommodating U.S. concerns in the nuclear and patent fields. The reality is that there is no way the Prime Minister can compromise on these issues without a serious loss of face.

Of course Kerry spoke about a lot of other issues – cooperation in renewable energy, higher education and vocational training, connectivity between Central and South Asia, and “an Indo-Pacific Economic Corridor to connect South Asia to Southeast Asia” – where India and the U.S. can and should work together. Another crucial area for cooperation is Afghanistan, where the political and security situation remains highly uncertain following the disputed second round of the presidential election. “Ungoverned spaces threaten us all. Instability threatens us all,” said Kerry, speaking in general terms. India and the U.S. have a common interest in ensuring that Afghanistan doesn’t emerge as an ungoverned, unstable space following the withdrawal of American troops later this year. Rather than expending valuable diplomatic energy in the pursuit of narrow commercial benefits – an arms deal here, a nuclear contract there – Kerry and his colleagues should focus on how to craft a durable initiative for Afghanistan, ideally one that ensures adequate financial and military support for the government there and which ensures its neighbours play a constructive role.

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This entry was posted on July 30, 2014 by in Indian Foreign Policy, U.S. Policy in South Asia.



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