ON September 6, the Nuclear Suppliers Group – the 45-nation cartel which effectively controls the world trade in atomic materials – decided unanimously to amend its guidelines to allow India to access nuclear equipment and fuel from its members despite remaining outside the Nuclear Non-proliferation Treaty and refusing to accept what is called the ‘full-scope safeguards’ inspection regime of the International Atomic Energy Agency. Three weeks later, the U.S. House of Representatives gave its imprimatur to a nuclear agreement with India (the ‘123 agreement’). Since then, India has gone on to sign bilateral agreements for cooperation in the civil nuclear field with France, the United States and Russia.

No foreign policy initiative has so divided the Indian political establishment as the nuclear agreement, but a careful evaluation of the ‘deal’ in its final form – including the NSG waiver, the IAEA safeguards agreement and the 123 agreement with its differing interpretations on both sides – will lead us to conclude that both the critics and the supporters of the deal are exaggerating both the costs and benefits of the new arrangements. The deal is not a silver bullet for India’s energy problems in the short or medium term, since the gestation period and costs associated with nuclear power – even given the easier access India will now enjoy – means our reliance on oil and especially gas will have to increase first before declining. Equally, the deal does not mean the abject and irrevocable surrender of independence in foreign policy as some critics have suggested. India’s rulers may still choose the path of least resistance, but that will depend more on the dynamic correlation of political and class forces within the country rather than on merely the ‘123 agreement’.

The entry of India into the ‘elite club’ of countries that possess both nuclear weapons and the right to engage in nuclear commerce with the rest of the world is one of the most significant changes the international order has seen since the collapse of the Soviet Union and the rise of China. This change is the product of underlying, objective changes in geopolitics triggered by the economic transformation that is underway in India. But the NSG decision – which will benefit France and Russia as nuclear suppliers, besides India, of course – could not have been taken without the leadership of the United States, which sees the nuclear agreement as the pivot around which a future strategic alliance between Washington and New Delhi might be built to help reinforce American hegemony in the vast Asian region stretching from the Middle East to Central Asia and the Pacific.

 

If the centre of gravity in world politics has shifted decisively to the East, one of the reasons for this has undoubtedly been the emergence of India as a major economic and strategic power in recent years. The country’s economy has recorded an annual growth rate of 8.75 per cent over the past five years, well above the global average, and its foreign exchange reserves have grown dramatically too. Though India’s rise has been less spectacular than that of China’s, the cumulative effect of the transformation that is underway in both countries means Asia has begun to count in ways that it never did before: indeed, for the first time since the rise of capitalism and modernity in the West, there is a possibility that outside powers will no longer be able to dominate the East as they have done in the past. Much depends, however, on the foreign policy choices that India will make today and in the next few years. Equally, how to respond to the reality of India’s ‘peaceful rise’ has become a question that every established power in the world is thinking deeply about.

 

Not surprisingly, the Indian state finds itself at a crossroads when it comes to envisioning its own role in the world as well as the nature of its future relationship with the two pre-eminent powers of our time, the United States and China. After being relatively dormant during the decades of the Cold War, the Asian vector of Indian foreign policy is gaining new strength and purpose. The fact that this is happening at a time of strategic flux in Asia further complicates the emerging equations.

The United States sees itself as an ‘Asian’ power – Defence Secretary Robert Gates recently described the U.S. as ‘a Pacific nation with an enduring role in Asia’ and credited his country with helping to facilitate Asia’s rise – and does not want the region to develop an architecture which excludes it. While it is suspicious of the growing military dimension of Chinese ‘comprehensive national power’, it is also aware that an India that is left unengaged might emerge as a spoiler. On its part, China, has serious reservations about America’s long-term intentions in the continent.

The Indian establishment, which tends to have doubts about the willingness of these powers to accept India at the global high table, does not have a major problem with the American desire to be an Asian power so long as that power is used responsibly and fosters stability. Unfortunately, the evidence of the stabilizing effect of the American military presence in the region is rather mixed. In important regions to the west and east of India, the Bush administration’s approach has led to one disastrous war (Iraq), the threat of another (Iran) and the emergence of North Korea as a declared nuclear weapons state. Even in the case of Afghanistan, a war which the Indian establishment supports, there are growing doubts about Washington’s wisdom in turning a blind eye to the Pakistani military’s subterranean links to the ‘neo-Taliban’ and in relying, almost exclusively, on combat operations rather than development to stabilize the country.

 

At the heart of the current foreign policy debate in India is the reality that China and the United States pose both a challenge and an opportunity for Indian strategic thinking but in different ways. Senior Indian officials believe the greatest single challenge to Indian foreign policy is the rise of China and the greatest single opportunity is Washington’s belief in the congruity of interests with New Delhi. But China and India share many interests too, especially on global issues, while the lack of congruity with U.S. interests on key questions also poses a significant challenge for the Indian side.

As India grapples with this complex balance, it is finding that conventional realist notions of the balance of power do not offer the best guide for a rational foreign policy. In East Asia, the Indian establishment sees the presence of America as largely benign but would not like to enter into a partnership with Washington in other regions such as Central Asia if this means forsaking or alienating established partners like Russia or potentially important players like Iran. The American expectation, however, is that New Delhi will help it to define the contours of the region’s emerging institutional arrangements by working closely with the U.S. across the full spectrum of issues in Asia.

In the run up to the conclusion of the nuclear deal, India has found it difficult to cherry-pick the areas where it wishes to cooperate with the U.S. With Iran, for example, the Indian fertilizer and power sectors would greatly benefit from the laying of the $7 billion trinational gas pipeline currently under discussion with Tehran and Islamabad. However, the Manmohan Singh government was so afraid that America would lose interest in pushing the Indo-U.S. nuclear agreement that it has been extremely reluctant to openly embrace the Iranian gas project. With the nuclear deal behind it, perhaps India will now be more enthusiastic about the pipeline, though so far this does not appear to be the case.

 

Another area where both ‘strategic partners’ have the potential for mismatch is in defence cooperation. The Defence Framework Agreement India signed with the U.S. in June 2005 envisages a broad expansion in military ties between the two countries. While India’s interest is primarily in the transfer of technology for the indigenous manufacture of the latest defence equipment, the American side is more interested in displacing Russia as the country’s principal supplier of armaments without having to commit to the transfer of technology. Its other priorities are developing interoperability with the Indian armed forces for future joint actions in the region and gaining easy access to Indian port facilities.

On its part, the Indian government has shown a certain willingness to go along with this agenda. Indeed, the pace and scale of military exercises has accelerated to such an extent that Stephen P. Cohen noted recently that ‘India and the Soviet Union never had military-to-military ties during the Cold War of the kind that India and United States enjoy today.’¹ And yet, the Indians are also reluctant to take this sort of engagement too far. Certainly, there is little enthusiasm in New Delhi for the Logistics Support Agreement the Pentagon wants India to sign.

 

Given the legacy of defeat by China in the 1962 border war, the idea of a strategic partnership with the U.S. appeals to a broad swathe of the Indian middle class, including the armed forces. When it comes to Beijing, the question Indian officials ask most often is whether Asia is big enough to accommodate the rise of both India and China. Most western analysts and policy-makers, and not a few in India, believe the answer is no and that New Delhi will have to eventually turn towards Washington for help in balancing China.

Recent events such as the U.S. offer of civil nuclear cooperation and the declaration that it wants to help India emerge as a major power have led some analysts to conclude American policy-makers have already enlisted India in the policy of strategic encirclement of China. And there is no doubt that its concerns about the consequences of the emerging Indo-U.S. strategic partnership led China to join the handful of countries which unsuccessfully sought to block the Nuclear Suppliers Group (NSG) from changing its rules to allow nuclear commerce with Delhi in September.²

At the same time, the reality of the triangular relationship between these three powers is rather more complex. Just as the American policy towards China cannot be easily reduced to the pursuit of a single goal like encirclement or containment, India’s policy towards both Washington and Beijing suggests that a more complicated and ambiguous strategy is under-way. There are pushes and pulls and moments when the pendulum swings too much to one side or the other. But the democratic nature of India’s polity has the potential to act as a corrective antidote. Whatever the thinking within the establishment about the utility of a military and strategic partnership with the United States, the Indian electorate remains unenthused.

 

The NSG’s historic decision to open the doors of nuclear trade with India will offer the first concrete test of how the Indian establishment intends to respond to the new opportunities provided to it by recent changes in the international system. The cartel which was set up to restrict nuclear sales to India following its first nuclear explosion of 1974 has now reversed course, mainly at the urging of the U.S. Thanks to the vagaries of American domestic politics, however, this change in global rules will allow India to buy nuclear equipment from supplier countries like France and Russia on terms that are more favourable than what U.S. companies will be able to offer.

Will India, to paraphrase the 19th century Austrian diplomat, Schwarzenberg, astonish the world by ‘the depth of her ingratitude’ and deny the Americans a share of the multi-billion dollar nuclear import bonanza? As well as pay-offs in other areas? Or will it feel obligated and thus play ball with Washington in the economic, military and political fields, even at the cost of stability in the wider Asian region? The next few years will provide us the answer.

 

Footnotes:

1. Testimony of Stephen P. Cohen before the House Committee on Foreign Affairs, Subcommittee on the Middle East and South Asia, 25 June 2008.

2. Siddharth Varadarajan, ‘Inscrutable Chinese Behaviour at NSG Meet in Vienna’, Mainstream, 20 September 2008. [http://www. mainstreamweekly.net/article940.html]