The rocky path to US-India alignment

by Rodger Baker and Faisel Pervaiz

Internal challenges hinder the US and India from fostering closer strategic ties.

While there is clear logic to closer India-US strategic cooperation on a number of fronts, domestic priorities and capacity issues will continue to complicate ties.

The United States and India are currently in the midst of a minor trade spat, cantered on medical devices, agriculture and e-commerce, among others. Washington has revoked India’s benefits under the 1970s era Generalized System of Preferences (GSP) arrangement, and New Delhi has struck back with higher tariffs on 28 US goods including various fruits and nuts. Compared to the China-US trade war, this is a minor skirmish, but, like continued challenges over arms sales and defence cooperation, highlights the difficulties of the two democracies to overcome national differences on their path toward greater strategic coordination.

In India, economic considerations, social policies, and a desire to ensure “strategic autonomy” continue to drive policy decisions, and each in some ways runs counter to US requests. India’s nominal GDP is a mere one-fifth that of China’s, and although the country has one of the fastest growing economies, the rate of growth has begun to slow. The country is wrestling with slowing growth in exports, consumption and investment, and permanent loss of its GSP benefits may add to the economic headwinds. In addition, agriculture, particular dairy, strikes at key sectarian and cultural aspects of Indian society, running counter to Prime Minister Narendra Modi’s political reliance on Hindu nationalism. On the security front, India is cautious of shifting its key arms supply away from Russia, and even if it were to do so, the heavy reliance on Russian platforms and systems would take years if not decades to mitigate.

For the United States, the current focus on trade balances drives initial phases of policy (though lowered from years past, India enjoyed a trade surplus of some $24.3 billion in 2018). But key US lobbies, including pharmaceutical and medical device companies and agriculture, have also weighed in on what they see as unfair advantages and market restrictions. US defence cooperation with India has been held up by Indian demands for technology transfers, but also by threats from the US Congress’s Countering America’s Adversaries Through Sanctions Act (CAATSA), with demands that India wean itself off of Russian supplies. Washington also takes umbrage at India’s relations with Iran, threatening sanctions over energy imports that have also complicated India’s investments in Chabahar. Finally, amid the myriad other trade disputes currently on the table, India is just not as important as China, the European Union, or Japan, and thus negotiations or concessions take a back seat to other priority areas.

Despite these challenges, India continues to be seen as a potential counterbalance to China in the Indo-Pacific region, and a desired partner for the United States. Since the late 1990s, Washington has sought to rebalance its South Asia relations, breaking attempts at a near zero-sum relation between Pakistan and India and expanding multifaceted ties with New Delhi – albeit slowly. As a massive country in a critical strategic location, one that is a democracy and English-speaking to boot, the assertion has been that India is the logical partner, not only in the Indian Ocean basin, but also as a global ally in challenging a rising Communist China and providing proof of an alternative pathway for Asian and African countries to pursue both economic growth and democracy.

In the last decade or so, the economic and military gap between China and India has widened, and New Delhi has seen China encroaching in its traditional sphere of influence. New Delhi has sought, with only partial success, to counter China’s larger wallet, and to expand its economic and security relations into Southeast Asia and on to Japan in response to China’s expanding influence. While a partnership with the United States would make strategic sense, it could also raise risks for India, pitting it in a zero-sum game against China that could highlight India’s growing strategic disparity with its cross-Himalayan neighbour. With “strategic autonomy” remaining a core Indian imperative, New Delhi will continue to resist pressure by the United States to pick sides, even as it sees its competition with China rising.

While the logic of closer US-India ties remains clear, New Delhi does not want to find itself constrained by US interests, particularly with Washington’s distance from the very real issues facing India around its periphery. New Delhi and Washington will continue to improve their political, economic and military ties, but such progress will remain slow and spotty as national priorities and domestic issues continue to weigh.

Rodger Baker is the Vice President of  Strategic Analysis for Stratfor.

 Faisel Pervaiz is a South Asia analyst at Stratfor.

2019-10-26T06:26:35+00:00October 24th, 2019|2019, North America Edition – 25th October 2019|

About the Author: Rodger Baker and Faisel Pervaiz