POLICY PAPER Number 37 June 2017 Re-evaluating bilateral and global relations DHRUVA JAISHANKAR The author is grateful to several colleagues at the Brookings Institution and Brookings India for their assistance in producing this paper, especially Thom- as Wright and Harsha Vardhana Singh for their detailed comments and sug- gestions on an earlier draft, as well as Shruti Godbole, Tanya Rohatgi, and Tushita Saraf for their inputs. About the author Dhruva Jaishankar is a fellow in the Foreign Policy program at Brookings In- dia in New Delhi. The Brookings Institution is a nonprofit organization devoted to indepen- dent research and policy solutions. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclu- sions and recommendations of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its manage- ment, or its other scholars. INDIA AND THE UNITED STATES IN THE TRUMP ERA: RE-EVALUATING BILATERAL AND GLOBAL RELATIONS FOREIGN POLICY AT BROOKINGS ii I NTRODUCTION he election of Donald Trump as U.S. presi- tifies four areas in which Trump’s election affects dent represents one of the most unexpect- Indian interests: bilateral relations (encompassing ed developments in American politics in the trade, investment, immigration, and technological post-World War II era. Trump campaigned as an cooperation), the Asian balance of power, coun- outsider, and entered the race for the presidency terterrorism, and global governance. It argues that with no prior political experience. He ran as much India must continue to engage with the Trump ad- against his own Republican Party as he did against ministration and other stakeholders in the United rival Democrats, bucking the broad consensus in States—including the U.S. Congress, state govern- Washington on globalization and U.S.-led liberal ments, and the private sector—in all of these areas. internationalism. Trump’s decisionmaking style, New Delhi must attempt to convince Washington temperament, and rhetoric—both during his that India’s rise is in American interest. This idea campaign and after his election—have also raised provided the underlying logic behind the Clinton, questions, concerns, and uncertainties about vari- Bush, and Obama administrations’ engagement ous aspects of U.S. policy. with India, but it will be more difficult to sustain given the United States’ new political realities and Given the United States’ standing and global pres- impulses. ence, it is no surprise that the effects of Trump’s as- cent are being felt widely. This extends to another At the same time, India must insure against the large democracy halfway around the world: India. prospect of a more “normal” America, an imbal- Like the United States, India too stands at an in- ance of power in the Asia-Pacific, divergent coun- flection point, although of a very different sort. Its terterrorism priorities, and a relative vacuum in $2 trillion economy is growing at approximately 7 global governance. While in many instances U.S. percent per year. Prime Minister Narendra Modi power cannot be fully replaced or replicated, enjoys a strong electoral mandate and high pop- India will have little choice but to invest in rela- ularity ratings, reinforced by major wins for his tionships with other countries to achieve its de- party in state elections. The country has a large sired outcomes, while more forcefully projecting and capable military experienced in dealing with a its own influence and leadership. This will mean broad array of security challenges, it enjoys a wide deepening bilateral economic, social, and techno- (if thinly-stretched) international diplomatic pres- logical relations with the likes of Japan, Germany, ence, and it boasts a globally competitive space France, the United Kingdom, China, and Russia, program. India’s demographic profile is also favor- as well as smaller powers such as Israel, the United able, with an expected increase in the working-age Arab Emirates, Singapore, Canada, and Austra- population for the next three decades. lia, especially in areas where they boast compar- ative advantages. Additionally, New Delhi must Trump’s election at a time of growing and converg- double down on its “Act East” policy in order to ing interests between India and the United States preserve a favorable balance of power in the In- necessitates a re-evaluation of several aspects of In- do-Pacific region. This will mean enhancing its dian domestic and foreign policy. This paper iden- military capabilities, deepening its Indo-Pacific INDIA AND THE UNITED STATES IN THE TRUMP ERA: RE-EVALUATING BILATERAL AND GLOBAL RELATIONS FOREIGN POLICY AT BROOKINGS 1 security partnerships, assuming greater regional every point of view—economics and trade, social leadership, developing eastward connectivity, and integration, political sensitivities, security, or en- participating more actively in Asian institutions, ergy flows—the rest of the world matters for India, even while continuing to seek opportunities for arguably more than it ever did. sustainable economic and commercial coopera- tion with China. On counterterrorism, India will Despite its positive trajectory and widening in- have to convince the United States to adopt poli- ternational interests, India still confronts sig- cies that compel the Pakistani state to stop its sup- nificant challenges at home. Its development port and tolerance for terrorist groups. India must requirements—whether economic, social, or tech- also consider the possibility of contributing more nological—are vast. India now has a rating of over in military terms to support the Afghan govern- 0.624 in the United Nations’ Human Development ment in Kabul. Finally, without harboring unreal- Index, marking a major improvement over the istic expectations, India must continue efforts to past quarter century. But it still ranks only 131 out advance its entry into apex institutions of global of 188 countries.5 Literacy rates are rising, but it is governance, in order to position itself to play the still home to over one-third of all illiterate adults.6 role of a leading power. The potential for urban development is immense, but the process of urbanization has been haphaz- ard. While life expectancy and infant mortality have reduced, even in the last few years, spending on public health is remarkably low. India’s infra- India’s profile and interests are increasingly global. structure needs, including in power, transporta- Contrary to common perception, India’s economy tion, and telecommunications, are incredible. It and society are highly integrated with the world. remains a difficult place to do business, ranking It has a large diaspora—particularly in the United 130th out of 190 countries.7 And creating jobs for States, Europe, and Middle East—that contributes India’s burgeoning youth population will remain a $69 billion in remittances and is a major source challenge, although the prospects may be less pre- of incoming investment.1 Its state-owned energy carious than they are often believed to be.8 enterprises now have global investments, as far afield as Russia, Vietnam, Mozambique, and South Farther afield, India faces a difficult internation- Sudan.2 India’s trade as a percentage of GDP is 42 al environment. Its immediate neighborhood is percent, higher than China’s.3 It is the world’s larg- not adequately interconnected or stable, and In- est importer of defense equipment.4 From almost dia confronts rising nationalism—often directed 1 Dilip Ratha et al., “Migration and Remittances – Recent Developments and Outlook” (Washington, DC: World Bank, 2016), http://pubdocs. worldbank.org/en/661301460400427908/MigrationandDevelopmentBrief26.pdf. 2 “ONGC Videsh Limited,” Oil and Natural Gas Corporation Limited, accessed April 15, 2017, http://www.ongcindia.com/wps/wcm/connect/ ongcindia/Home/SubsidiariesJVs/Subsidiaries/ONGC+Videsh+Limited/. 3 “Trade (% of GDP),” World Bank, accessed April 15, 2017. http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS. 4 Aude Fleurant et al., “Trends in International Arms Transfers, 2016” (Stockholm, Stockholm International Peace Research Institute, 2017), https://www.sipri.org/sites/default/files/Trends-in-international-arms-transfers-2016.pdf. 5 “Human Development Index and Its Components,” Human Development Reports, United Nations Development Programme, 2017, http://hdr. undp.org/en/composite/HDI. 6 “Education for People and Planet: Creating Sustainable Futures for All” (Paris: UNESCO, 2016), http://unesdoc.unesco.org/ images/0024/002457/245752e.pdf. 7 “Doing Business 2017: Equal Opportunity for All” (Washington, DC: World Bank, 2017), http://www.doingbusiness.org/~/media/WBG/ DoingBusiness/Documents/Annual-Reports/English/DB17-Report.pdf. 8 Manish Sabharwal, “Ignore the Jobs Doomsayers,” The Indian Express, May 30, 2017, http://indianexpress.com/article/opinion/columns/ignore- the-jobs-doomsayers-4679916/. INDIA AND THE UNITED STATES IN THE TRUMP ERA: RE-EVALUATING BILATERAL AND GLOBAL RELATIONS FOREIGN POLICY AT BROOKINGS 2 against New Delhi—in its immediate periphery.9 ment (“smart cities”) to public health, from climate India has concerns about China’s rise and remains and energy initiatives to education and skills. The frustrated by the lack of opportunities in the Chi- two countries talk regularly and frankly on a wide nese market. In particular, China’s ambitious One variety of strategic