India’s relations with the United States are under renewed focus to assess whether the momentum of the past two decades is waning. The warning signs were manifest when Prime Minister Narendra Modi abandoned a muscular approach towards China in the aftermath of the 2017 Doklam standoff, and towards India’s immediate neighbourhood — as evident in the warm outreach to Communist-controlled Nepal following the 2015 blockade. A two-decade-old strategic assumption, that the United States considered India vital to an Asian security order in a post-9/11 world in which Chinese ascendancy is challenging US dominance, seems no longer valid.
US President Donald Trump largely sees nations, on a descending scale headed by China, at default in proportion to their trade surplus with the US. Each must rectify behaviour or face tariffs regardless of whether it is a European ally like Germany, a treaty-bound neighbour like Canada or a new partner like India. In addition, Mr Trump has upended stability in the Gulf region and West Asia by aligning with the young leadership of the UAE and Saudi Arabia against not only Shia nations led by Iran but even Qatar, Yemen and perhaps Turkey. Simultaneously, his North Korean gambit has left Japan and the US alliances in the Pacific open to doubt. Hence the Narendra Modi government’s new, more sober outreach to China, Russia, Nepal and even defiant, marble-sized Maldives. But domestically, the old script of a muscular approach to Pakistan stays, being a trusted electoral instrument when economic and development promises earlier made appear haphazardly delivered.
Thus, Mr Modi visited Wuhan in April for an “informal summit” with Chinese President Xi Jinping. On June 9-10, he was back in Qingdao, China, for the Shanghai Cooperation summit. The Qingdao Declaration on June 11 came as President Trump met North Korea’s supremo Kim Jong-un in Singapore. Three points were US-specific — avoiding disruption of world trade and protectionism; sustainable implementation of the Iran nuclear deal; and cooperation in innovation. India claimed it stalled the summit’s endorsement of China’s Belt and Road Initiative, but in fact the listing of nations supporting it showed India as an isolated exception. Only time will tell whether the Chinese read this as a face-saver for both or kowtowing by India, on rebound from exuberant American dalliance.
In May, Russia was wooed by Mr Modi via another informal summit, to try and recapture the old romance in a progressively barren relationship, with India diversifying its arms purchases, including buying $13 billion of US arms since 2007. With oil prices rebounding, Russian allies Iran and Syria regaining control over a large swathe of West Asia, routing ISIS, and Europe divided over immigration, President Vladimir Putin has resurrected Russian influence. Russia was also converging with China to create a bulwark against US activism. Rebalancing relations between the new polarities emerging after the collapse of the Soviet Union in the early 1990s and a three-decade predominance of the US was now a necessity for India.
The upgrading of Indo-US strategic dialogue to the 2+2 level, jointly led by the foreign and defence ministers, was announced last year. While some delay in convening it was understandable as the US secretary of state changed, but the postponement yet again this month raised the question of whether India had slipped from the US strategic calculus. Sending Nikki Haley, US ambassador to the UN and a Cabinet member, to New Delhi was poor substitute for institutional engagement. Moreover, she was the pointperson for announcing the US withdrawal from the Iran nuclear deal and the face of US multilateralism, or its Trumpian version, symbolised by her announcement of the US quitting the UN Human Rights Council. Her message was to have India abandon oil purchases from Iran and dalliance with Russia as US legislation forbids trading, including arms purchases, even from the latter. Finally, India challenging US duties on Indian steel and aluminium exports and levying counter-tariffs on US agricultural products must have also figured in the discussions.
India could, as seems to be happening, apparently accept the US demarche and reel back its outreach to Iran and Russia. This could only be a tactical move as Indian public opinion may reject a total alignment with the US, or with its surrogates UAE and Saudi Arabia, despite them unleashing large investments in India. Iran is vital for more than oil and gas. It is a bridge to Afghanistan and Central Asia. India also has world’s second largest Shia population, whose votes the BJP now covets in Uttar Pradesh. Mr Trump may run into domestic or international trouble. Reports leaked by US intelligence indicate that North Korea is still enriching weapons-grade uranium at secret facilities, in breach of the Trump-Kim understanding. India needs strategic patience now till such scenarios unfold to curb the Trumpian geo-strategic evangelism.
On July 6, a 25 per cent tariff on $50 billion of Chinese goods are to kick in. The US has another list of 10 per cent duty on a further $200 billion goods. China has complained to the WTO but the US argues that China stole US intellectual property first. In 2017, the US imported $505 billion of Chinese goods. Many products imported have US components and may impact US manufacturers indirectly. Higher tariffs would also start getting passed on to US consumers eventually. The benefits, if any, of onshoring of US production and supply lines may come later or never. Whether China relents and opens its markets and becomes less predatory is also a factor of domestic Chinese politics. President Xi Jinping must protect his image as a strong leader.
A balanced foreign policy becomes challenging when antagonisms among the major powers are fanned by nationalistic leaders with non-concurring visions. The US perceives “Made in China 2025” as a technology behemoth built on purloined US and Western technology. “America First” is seen by China, if not Europe and Asia, as bullying by a mercantilist who sees global trade as a zero-sum game. Narendra Modi may, on reflection, discover that he has to revert to what the BJP has always reviled — a more nonaligned foreign policy stance.
