India’s hard dollar embrace with troubled US

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Obama is not sold on India and emotionally wedded to it as his immediate predecessors — particularly President George W. Bush — were. However, he has given enough indications on this visit that he willing to come to a deal, or several deals, with India that will be mutually beneficial. For the moment, he doesn’t have the space and maneuverability to sacrifice Pakistan as part of the deal.

By Ashok Malik
What does one make of US President Barack Obama’s speech at the joint sitting of Parliament on November 8? In a sense, every symbol, every message the Indians wanted to hear was milked and put to use: “India is not emerging but has emerged;” India invented the concept of zero; India is a “model to the world,” India created the Green Revolution and supercomputers; India deserved to be a permanent member of the United Nations Security Council; Pakistan needed to fight terrorism and bring to justice the masterminds of 26/11.

Obama is an eloquent speaker though not always a substantive one. He said nice things but provided none of the commitments and the hard promises that (sections of) his hosts had wanted. Who does one blame — him or those who had fanciful, unrealistic expectations?

The Obama visit was never planned as a blockbuster strategic breakthrough. To be fair to the man, that is not his style. His dependence on Pakistan in terms of the war against terrorism and his refusal to look at any long-term goal beyond his re-election two years from now had made it obvious even weeks ago that his trip to India would be a limited one. It would have a transactional agenda, driven by give-and-take.

Many in the Indian establishment were alive to this but some in the political class and the foreign policy community continued to have other ideas. Egged on by certain over-the-top television channels, they spent the three days harping on Pakistan and the UN Security Council seat. It was almost as if one word from the American President would resolve all these conundrums, destroy Pakistan and its terror infrastructure and reshape the Security Council. This was not just a gross misreading of  Obama’s priorities and his —and the United States’ — political capital but also an inaccurate characterization of what should be important to India.

Obama is not sold on India and emotionally wedded to it as his immediate predecessors — particularly President George W. Bush — were. However, he has given enough indications on this visit that he willing to come to a deal, or several deals, with India that will be mutually beneficial. For the moment, he doesn’t have the space and maneuverability to sacrifice Pakistan as part of the deal. For related reasons, as well as for instinctual ones, he is not interested in making a strategic partnership with India a cornerstone of his presidency.

As such, there will be no grand bargain. Nevertheless, there can be numerous smaller, not-so-grand bargains. The US President has more or less said as much and it is for India to seize the chance.

In this context,  Obama’s announcement that the US will be reforming its export control rules and allowing India greater access to dual-use technology is big. It is a potential game changer and can not only dramatically increase the quantum of India-US trade but also revolutionize Indian manufacturing.

Yet, it is not as if all of America’s “technology re-serves” will be opened up at one go. The US is no more a manufacturing economy. Its financial strength has depleted. In a sense, technology is lone hand: its top exportable commodity. It will calibrate access to this technology to its own advantage. In India’s case market access — for American financial services companies, retail chains and so on — will determine the overall comfort level of the relationship and the degree to which America shares technology.

This is not the old America; it is a troubled America that is down to hard bargaining. Like Gandhi, a great baniya himself — he sold autographs to children to raise money for the Congress —  Obama is going to play hard.

In the past 15-odd years, India has been courted and wooed by the US as a former Cold War adversary, an estranged polity that needed to be converted to the ways of the last superpower. That period of seduction is long over and no more necessary. It has left India with some leverage in Washington, DC, but not enough to seriously influence American foreign policy goals and strategic options.

How can India increase its influence in the Beltway, the inner ring of power in the American capital? It can do it in one of two ways. It can contribute troops to the war effort in Afghanistan and take pressure off  Obama and his troops. This is simply not feasible. As a society, India is not ready for such hard decisions. That aside, the US itself would be wary of allowing India a military role in Afghanistan, conscious that it would inflame Pakistan and others in the Islamic world.

The other option — and the only option — is to lock the US into a economic embrace that is irreversible and breaking which would seriously damage American interests, jobs, consumers and corporate profitability. This won’t happen in a hurry; it took China 30 years. Yet, with greater access to dual-use technology than China, without the political baggage that the Communist giant carries and with its own entrepreneurial and technological wherewithal, India can do it faster.

Rather than whingeing about Pakistan and the Security Council to  Obama — and to every political visitor, who touches down at an Indian airport, presumably even the President of Guatemala — India needs to propel its domestic conditions and its economic policy to emergent realities. It is one thing to demand dual-use technology but quite another to ensure India’s industry has the absorptive capacities to make use of such facilities. Frankly, just working towards optimum use of the dual-use technology that will be available can keep Indian policymakers busy for a decade.

This is not to suggest that India should forget about Pakistan, terrorism and the Security Council. It is just that a pragmatic mind tailors its message according to the audience. If  Obama is not listening to something, change the conversation and wait for a chance to go back to your original point. Till then — and even after — focus on your economy. In the end, it is economic heft that will lead to global political muscle and inevitably push the world to give India a seat at the high table, at the Security Council or wherever. The rest is all verbiage, even if  Obama dressed it well.
Courtesy: Deccan Chronicle

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