Beyond the Plateau in U.S.–India Relations

In partnership with Beyond the Plateau in U.S.–India Relations The Heritage Foundation and the Observer Research Foundation SPECIAL REPORT No. 132 | APRIL 26, 2013 from THE ASIAN STUDIES CENTER Beyond the Plateau in U.S.–India Relations The Heritage Foundation and the Observer Research Foundation SR-132 About the Authors From the Observer Research Foundation, New Delhi Sunjoy Joshi, Director C. Raja Mohan, PhD, Head, Strategic Studies and Distinguished Fellow Vikram Sood, Vice President, Center for International Relations Rajeswari Rajagopalan, PhD, Senior Fellow From The Heritage Foundation, Washington, D.C. James Jay Carafano, PhD, Vice President, Foreign and Defense Policy Studies, E. W. Richardson Fellow Walter Lohman, Director, Asian Studies Center Lisa Curtis, Senior Research Fellow Derek Scissors, PhD, Senior Research Fellow Photo on the Cover— © Shigemitsu Takahashi / Alamy This paper, in its entirety, can be found at: http://report.heritage.org/sr132 Produced by the Asian Studies Center The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002 (202) 546-4400 | heritage.org Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. SPECIAL REPORT | NO. 132 APRIL 26, 2013 Table of Contents Introduction ...............................................................................................1 India, the United States, and Southwest Asia ...............................................................5 Partnership in East Asia ...................................................................................7 Counterterrorism Cooperation ............................................................................10 Defense Cooperation .......................................................................................13 Nonproliferation and Nuclear Security. .15 Economic Relations ........................................................................................18 Deepening the Partnership ................................................................................22 Conclusion .................................................................................................28 Endnotes. .29 III SPECIAL REPORT | NO. 132 APRIL 26, 2013 Beyond the Plateau in U.S.–India Relations The Heritage Foundation and the Observer Research Foundation Abstract Few relationships among major powers have been transformed so comprehensively in recent years as that between India and the United States. Yet, there is a growing sense in both New Delhi and Washington that the much-heralded partnership has not lived up to its promise. In short, the relationship has plateaued. This Special Report by the Observer Research Foundation in New Delhi and The Heritage Foundation in Washington, D.C., is about understanding this paradox and finding ways to rekindle the strategic enthusiasm between the two countries. The sections in this report offer specific proposals for advancing bilateral cooperation in various sectors, such as the economy, defense, regional security in East and Southwest Asia, nonproliferation, and counterterrorism. Introduction In real terms, there is no denying the extraor- differences over India’s nuclear program. As a non-sig- dinary progress in the engagement between India natory to the Nuclear Nonproliferation Treaty, India’s and the United States over the past two decades. pursuit of nuclear weapons and testing of nuclear Throughout, and even after, the Cold War, the world’s devices in 1974 and 1998 put it at odds with U.S. non- two largest democracies remained estranged. In the proliferation policies, and made New Delhi a target of first decade after the end of the Cold War, the two the international nonproliferation regime. Clinton’s countries quarreled over nuclear nonproliferation; recognition of the need to deal with India on an excep- the U.S. role in the India–Pakistan disputes, espe- tional basis was translated into reality by George W. cially the question of Jammu and Kashmir; ter- Bush. President Bush removed the Kashmir dispute rorism; trade and finance; regional security in the as an irritant in the relationship, de-hyphenated U.S. Middle East and Asia; and multilateral issues. India’s dealings with India and Pakistan, and invested much defiance of the international community by conduct- political capital at home and abroad to end India’s ing five nuclear tests in May 1998 put the two nations prolonged nuclear isolation. President Barack Obama, on a confrontational footing. The U.S. led the inter- despite his reservations on the civil nuclear deal ini- national sanctions against India and demanded a tiated by the Bush Administration in 2005, extended rollback of India’s nuclear and missile programs. its logic by supporting India’s membership in the vari- New Delhi refused but embarked on a substantive ous international export-control groupings. He also and consequential dialogue on security issues with backed New Delhi’s permanent membership of the Washington. United Nations Security Council. President Bill Clinton visited India in 2000, the Beyond these high-profile initiatives, the sus- first American presidential visit to the country in tained engagement between three different U.S. more than two decades, despite the unresolved Presidents and two Indian prime ministers has laid 1 BEYOND THE PLATEAU IN U.S.–INDIA RELATIONS the foundation for a strong partnership. Considering may have impacted precious national opportuni- that the two countries did not cooperate for decades ties, not limited merely to the relationship with the and were near strangers in the middle of the United States. 20th century, the scale and scope of their current bilateral engagement is truly impressive. While Washington has a bigger, stronger economic rela- Instead of an approximation of a tionship with China, its economic relationship with traditional alliance relationship India involves fewer political problems. While the U.S. military engagement with Pakistan is deeper founded on presumed common than that with India, New Delhi—unlike Islamabad— geostrategy, New Delhi and has not, in any way, undermined the American effort Washington should focus on in Afghanistan. More than 30 forums of bilateral pragmatic cooperation on the basis U.S.–India consultations are currently underway. of the intersection of their narrower The trade and investment relationship has gath- ered momentum. India, which previously never respective interests. bought major defense equipment from the U.S., has imported nearly $10 billion worth in the past few The second factor is rooted in the reality that sig- years. India’s armed forces exercise more with the nificant sections of the vast bureaucracies in both U.S. military than with any other country’s military. countries remain tied to default positions toward the Their law enforcement and intelligence agencies other that are not conducive to a deeper bilateral part- have rapidly expanded counterterrorism coopera- nership. It must be borne in mind that the dramatic tion. This is rapid acceleration from a near-zero base, changes in India–U.S. relations were driven from by any measure. Understanding the current sourc- the top by political leaders on both sides and pushed es of frustration between the two countries, then, through the customary inertia of reluctant bureau- becomes necessary for charting out the road map for cracies by a few energetic decision makers. The same the future. forces of habitual inertia may have struck back after At least four factors help explain the paradox of the heady days of conceptualizing and implementing unprecedented progress and continuing disappoint- the civil nuclear initiative between 2005 and 2008. ment in India–U.S. bilateral relations. The first is Both New Delhi and Washington need continuous rooted in strategic culture. American post–Cold tending of the bilateral relationship at the highest War foreign policy has been characterized by quickly political level. In both democracies, it is not unusual shifting priorities and short spans of intense atten- that political leaders find it difficult to devote sus- tion. On the other hand, few countries are as slow tained attention to a single issue. The inability to do as India in shifting from one frame of reference to so in the past few years has had a negative effect on another. Those Americans who demand that India India–U.S. relations. The cycles of political clarity do more on the foreign policy and security fronts and activism in New Delhi and Washington have not tend to forget that the United States was equally been in sync. slow in adapting to the global changes at the dawn of Third, there have been genuine policy missteps the last century. Although the United States was the in both New Delhi and Washington with unintend- number one industrial power by the end of the 19th ed negative consequences for the bilateral relation- century, it took nearly half a century and two world ship. The first year of the Obama Administration wars before it assumed international responsibili- saw the United States try to construct stronger rela- ties commensurate with its size. India, on the other tions with Pakistan and China without reference to hand, must recognize that opportune moments in India’s sensitivities and interests. The assumption the United States must be seized to consolidate for- in Washington that the road to peace in Afghanistan ward movement. After having invested a

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