WE are today on the threshold of a major international event – an event where India and the US are committed to burying the past. After this burial, both governments hope to turn their faces forward in a relationship that should have taken place much earlier. People who think positively about this step uniformly claim that as democracies we share the same values, have the same goals and use the same yardsticks on how societies are governed. So why has this conception about who makes a friend suddenly become important? The answer lies in India’s economic growth and the consequences for a new balance of power fifteen or twenty years from now. More about the balance of power later.

We are all familiar with the projections of many financial institutions on India’s rise to world number three or four in twenty years. It is true that by then the per capita income will be nothing to boast of, certainly less than $ 3000 a year. But the reality is that with our numbers, size of government spending, the defence budget, our innovation, the size of the capital market, the stock exchange and trade flows, this number three position will not be hollow. It will be a genuine one as far international relations are concerned. And right next door, China will be booming too, all of which leads us to the already well-known conclusion that the centre of gravity of power will shift to Asia, hesitantly in 10 years and decisively in 20 years.

 

What does becoming the centre of gravity mean in international diplomacy? After the Second World War it rapidly became clear that the Iron curtain had come down, the world had polarized and that the future of Soviet-American competition would be decided in Europe. So we saw the Americans come up with the grand Marshall plan to rehabilitate and rebuild the German economy, which they had only recently been bombing with 1000 bomber raids. Because the competition was ideological – free markets and liberal democracies versus Stalinism and Communism – German prosperity was the key to winning the ideological battle. In classical terms, it was balance of power. If we are headed towards being in the top five nations of the world, attempts by the big powers to clear the decks of past misunderstandings with a rising power like us for the purposes of a balance of power is inevitable, because we are now attractive. We have to learn how to handle it.

Our relationship with the US was fraught with obstacles, most left over from the Cold War, but a substantial portion arising from the single minded targeting of India as the chief potential proliferator after the 1974 blast in Pokharan. The Zangger committee, the Nuclear Supplier Group, the restrictive trade regimes to prevent the export of dual use items, the strengthening of the US Atomic Energy Act 1954 with a draconian nuclear non-proliferation act of 1978, which eventually led to the American Export Administration Act of 1979 which started the total embargo of US high-tech and defence supplies to India were all mechanisms set up primarily with India in mind.

So today when we hear our defence and rocket scientists, nuclear and space scientists speak of their struggles for a quarter century to survive American sanctions, we begin to understand what it is we are attempting to bury and put behind us. Nevertheless, we cannot permit the heritage of distrust to overwhelm the Indian political initiative. Certainly there are other Asian Tigers for the US to choose from, though some appear to have peaked in their economic growth. China certainly looks like it will gallop along. But could India and the US, both liberal democracies, be entirely happy about an economically and militarily strong China which does not take any collateral steps towards becoming a liberal democracy? The world has seen too many traumatic events initiated by dictatorships, autocracies and illiberal democracies to remain complacent about a large powerful authoritarian state. The most frightening aspect of such a state is the sheer opacity of its decision-making process.

 

We should examine the common values argument closely. It is true that we are an Asian society, with Asian values and will continue to remain so. We have the longest cultural continuity in history with our old mythology still a lived belief. As a nation we are Asian and definitely Indian. But what are we as a state? Our Constitution directs us to be a secular, liberal, multi-party democracy. So although we are an ancient civilization, as is China, our state-making ideas are taken from the West. I refer to the West as an idea, not as a geographical entity. Despite the presence of many old civilizations in the East, our model for state-making really remains the secular multi-party state of the West – separation of Church and state, separation of the executive and the judiciary, fundamental rights of man, and the armed forces loyal to the Constitution and not to a political party. The East, despite its old tradition of tolerance, has yet to come up with an alternative model to the western idea of the state. The US and us therefore really have constitutions that propel us towards common goals.

 

It is true that in the past bilateral animosities led India to have, what the Americans point out as the worst anti-American voting record in the UN. In the Indian view American assistance to Pakistan worsened the South Asian balance of power for a quarter century. But international relations are based on circumstance. To extrapolate the way personal animosities are remembered forever is silly. The Americans fought the Germans, atom bombed the Japanese and killed 200000 Chinese in the Korean war but those animosities have been left behind in their new relationships. So the often raised complaint in India that America is unreliable has to be seen in the context of the environment at that time.

Today, it is in America’s interest to forge a strategic partnership with India. That American interest in the future of a democratic India is our surety of a stable relationship for at least the next three decades. The choices for the United State are not that many to ensure a favourable strategic situation in the Asian continent. China is growing so fast that already the era when it may have a larger GDP than the US is being predicted. The EU is increasingly seen in Washington as a commercial and economic competitor whose export goods are often the same – high technology aviation and aerospace products, instrumentation and emerging pharmaceuticals and advanced materials. Europe’s contribution to operations abroad is limited as domestic opposition to overseas casualties grows. European soft power will remain and grow and will probably be the main leverage that the EU can exert in the future.

 

All that I have described is not new and since 2001 the two countries have taken a number of steps to widen the relationship. As a result the number of avenues on which the interaction is growing is large and the relationship becoming complex. Undoubtedly the most attractive component has always been the performance of Indians in America. Their total wealth today is estimated at around $ 900 billion, and the Indian flood to the US continues unabated. The H1B visas which enable Indians to work in the USA now has an upper limit of 60000. Student arrivals in the USA have doubled between 1990 and 2004, from 40000 to 80000, displacing all other nations as the largest provider of the international student body. These Indians, many of whom remain behind and settle down in the USA, are now the richest ethnic community with a median income of $ 69000 a year against the American average of $ 50000. One in seven of all Indians in America is a millionaire and quite startlingly 35% of all doctors in the USA are Indians as are 35% of all the employees in Boeing.

The blow-black effect of the prosperity of the Indians in America is beginning to affect their home country too. As is well-known, the conversion of Bangalore as India’s Silicon Valley is largely the achievement of Indian Americans returning home – like Narayana Murthy. NASCOM estimates that 30000 software professionals have returned home as entrepreneurs or executives to work in India. The presence of influential local Indian bodies in the USA is beginning to affect American domestic policies as Congressmen take into account what we in India call vote banks as well as campaign contributions.

Many in India are uneasy with the growing Indo-US relationship because they feel it marks a dangerous shift away from traditional non-alignment or the forging of what may be seen as alliances. This is unfounded as in the real world there is no country that can survive the rough and tumble of international politics without allies or near allies. At the height of non-alignment we did sign the Indo-Soviet Treaty as a prelude to the 1971 war, we did approach the West in the aftermath of the Chinese invasion of 1962, and we did work with Iran and the US in post-Taliban Afghanistan. So where national interests dictated a temporary alliance, if one can call it that, we have not shied away from it.

 

In this case what is involved is a strategic partnership with the strongest power on earth. Some would forecast the inevitable decline of the US, but I would not be so sure that it’s coming soon. Ever since Henry Ford captured the automobile market with mass production of an affordable car and set off the growth of an automobile led infrastructure growth, the Americans have never lacked the ingenuity to capture the economic high ground in a competitive world. In the eighties they did it again with IT which has led the financial and technological revolution for the past twenty years, once again sealing their position at the top of the pile. Today there is undoubtedly another revolution in the offing and that is the knowledge revolution – knowledge in IT, in nano-technology, biotechnology, space and new electronics. With the outstanding performance of Indians in all these knowledge industries in the USA, the blow-back effect for India will be huge. So although this phenomena has been referred to as the brain drain, it will probably all come back to us if we can make the working conditions here tolerable.

 

What is evident from all this is that the flow of events, the changes in society, the end of the Cold War, globalization and international events have all tended to push India and the US together. It is not so much a government initiative that has led to the relationship, but rather the government’s recognition of the trends in society, what the German philosophers term zeitgeist or the spirit of the times. It is the governments who have changed their policies in recognition of this trend and moved to bring the countries closer.

Some of the government initiatives include defence cooperation led by the Defence Planning Group, now decentralized under semi-autonomous bodies; the energy dialogue with separate initiatives on thermal power, hydrocarbons, energy efficiency, civilian nuclear technology and renewable energy; the high tech cooperation group with subgroups on biotechnology, nano-technology and IT; space cooperation with understandings on earth navigation systems and commercial launches; the Indo-US agriculture initiative which seeks ways of repeating the earlier green revolution which came about largely by introducing new varieties of wheat and rice developed by US scientists and modified in India; the Indo-US economic forum which looks at ways in which policy can catalyse greater US investment in India; a CEO’s forum which may turn out to be a powerful arrangement since much of the technology and finance in the US is with the private sector.

These steps indicate that as expected in a growing relationship between two very large democracies, decentralization has been initiated to prevent everything being funnelled and choked by central oversight. The Indian government has not lagged behind in changing its own policies since 2001. This is important because a survey of the changes that have occurred shows that support to the relationship comes from both the previous as well as the present government.

 

There is broad political consensus which includes an endorsement of the US’s new strategic framework at a time when even America’s formal allies were hesitant; offer of unqualified support to the US campaign in Afghanistan and the use of Indian bases; an endorsement of the President’s programme on missile defence, and hence no opposition to the US withdrawal from the ABM treaty; support to the US in enforcing the rigorous implementation of the chemical warfare convention against a number of NAM nations; offer of joint front patrol in the straits of Malacca which was accomplished and joint patrol in the straits of Hormuz which is pending; and voting with the US at the September 2005 IAEA Board of Governors meet on Iran.

Undoubtedly, of the steps taken so far, defence cooperation has gone the furthest. Most people outside government have become aware of the cooperation from the joint exercises carried out the Balance Iroquois Army exercises, the Malabar series of naval exercises and the Cope Thunder air force exercises. In the case of the navy, the main battle assets of both countries like aircraft carriers and American nuclear submarines have already participated. Recently the strike force of the two air forces have also taken part in an exercises. In the army’s case, the interaction has focused on the kind of forces that are most active in the new warfare of today – counter-terrorism and anti-insurgency. Nevertheless, some unpublicized but meaningful cooperation has occurred in the army’s case with an exchange between the AFMC and the Defence Medical Center in Washington and the exposure to the IEDS offered by the College of Military Engineering to the US Army Corps of Engineers.

These exercises all lead to the same objective, which is interoperability. But at the heart of this relationship now are the objectives articulated in the Mukherjee-Rumsfeld agreement of June 2005: monitoring security and stability in the region; defeating terrorism and violent religious extremism; projecting the free flow of commerce; preventing the spread of WMD material; and collaboration in multinational operations when it is in their common interests.

 

Of all the remaining areas of cooperation with the US, the most important may well turn out to be agriculture. I know that most impressions of collaboration with the US brings up visions of Silicon Valley and high-tech computers and electronics. But surely the crisis facing India today is in agriculture. When I was young, 80% of Indians lived in villages. Today it is nearer 60%. These 60% of India’s people produce just 22% of the country GDP, an impossible situation. Our rise to be a world power seems an unlikely bet with 60% producing 20% and 40% producing 80%.

In contrast, in the US the number of people engaged in agriculture has fallen to just above 2%, but they produce 20% of the GDP. So something is wrong here – and it doesn’t take much analysis to figure out that there are far too many people in the villages depending on too little output. We need another agriculture revolution – green or white or any colour. The Indo-US agriculture working group is looking at both the flow of agricultural goods in and out of the country as well as how US corporations can be persuaded to work with the Indian research institutions.

This is not to underplay the importance of hi-tech cooperation for which the hi-tech group was formed in 2002 and the last meeting was held in December 2005. As a result of implementing the NSSP announced by President Bush four years ago, only 1% of US exports to India now require an export license, and license processing time has come down to 25 days. Of the dual use items in the prescribed list, about half still require licenses, but this story need another look which we will do.

The Indo-US space cooperation is a good example of how goodwill generated over four years can come to grief on the rocks of US domestic law – the Export Administration Act – mentioned earlier. A massive collaborative project between ISRO and Boeing, a major supplier of space satellites, failed to take off when licenses were refused to Boeing.

 

These positive initiatives show one common thread. The personal intervention of the White House to veto existing restrictive laws, which the president can on grounds of national interest – that is to say, even where domestic law doesn’t permit it, a presidential waiver is possible. To end this terrible situation, President Bush has proposed solving all the problems between the US and India from the foundations upwards – namely India’s non-existent status in the NPT, the US NNAA and the EAA which do not allow very much to be exported to India. Hence the nuclear deal, which at one stroke enables Congress to agree to amend US laws to make an exception of India, by giving it the status of a nuclear weapons power and thereby bring the Congress and the Administration to back India’s new status; to indicate to India that New Delhi is now seen as a partner to be helped rather than a problem to be contained; to raise India from being a target to the level of a world actor – or in other words to sit at the high table along with China, leaving behind the years of hyphenation with Pakistan; and to transfer to India all the world’s technologies or civil nuclear power generation along with all the other technologies which earlier required presidential waiver to achieve.

 

The nuclear deal is much in the news these days. I don’t want to go into it too deeply at this stage, except to say that there are ways in which it can be implemented without constraining our strategic capability. This sounds grand and patriotic, but let me say that even I who have supported the country having nuclear weapons to survive in an uncertain world, am not for an open-ended nuclear weapons programme, nor for an open-ended nuclear weapons research programme. I am not happy with any indefinite freedom being given to the DAE to manufacture nuclear weapons endlessly, onto 2020 to 2030. This view has nothing to do with America, but is based on two arguments: (i) The Indian Atomic Energy Act is a useless piece of legislation in constraining the DAE. Every powerful bureaucracy must be constrained in its power. (ii) The making of nuclear weapons has always had a dangerous self-sustaining momentum.

If we look at all the steps taken to give substance to this relationship, the question arises – is the relationship driving these measures that we are taking, or are the measures driving the relationship. I think it is the first – the relationship is driving these measures because it is being driven by world events. The rise of India, the rise of China, the big knowledge relationship created by the prosperous Indians in the US, the decline of hydrocarbons, the long haul war on terrorism and fundamentalism and the coinciding and overlapping geopolitical interests of the USA and India in this region.

 

For three decades we followed a policy of grim self-reliance, and economic autarky. I think it all ended with the financial crisis of 1990-91. Everyone quotes the statistic that India once produced 25% of the world GDP, but few add that during that time we were the largest trading nation in the world – with a huge foreign exchange surplus. I don’t think we should be under-confident about managing a relationship with a giant power. This is not aimed at containing China – with whom our relationship has never been better. Also as India’s exports have grown, the percentage of Indian trade with the US has actually declined, so there is no fear of being dominated by the American giant.

India is too big to be worried about being bullied. This relationship is by no means an alliance. It is more a burial of the past, a removal of distortions created by the Cold War and non-proliferation. America needs India, just as much as India needs America – no more, no less. In international relations, the best national interest is self-interest and that is precisely what is at work here.