The U.S.-India relationship is vital to maintaining a balance of power in Asia that is favorable to the United States. The two states have already overcome the most difficult challenge—integrating India into the global nonproliferation regime. But deepening the partnership requires President Obama to address institutional deficiencies in Washington, cooperate with New Delhi on Afghanistan and Iran, build up India’s defense capabilities, and encourage Indian economic reform.

Ashley J. Tellis
Ashley J. Tellis is the Tata Chair for Strategic Affairs and a senior fellow at the Carnegie Endowment for International Peace, specializing in international security and U.S. foreign and defense policy with a special focus on Asia and the Indian subcontinent.
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Since the end of the Cold War, successive American presidents have pursued a geopolitical project of great significance for Asian stability: eliminating the estrangement between the world’s oldest and largest democracies, the United States and India. Thanks to the actions of the two most recent administrations in Washington and in New Delhi, this transformation has been a stunning success. It is now clear that strong U.S.-India relations will continue to be important for American interests in the years ahead for multiple reasons, including preserving a favorable balance of power in Asia, achieving U.S. objectives in Afghanistan and Iran, and strengthening the competitiveness of U.S. businesses globally.

Building on this evolution in American policy toward India since Bill Clinton, President Barack Obama has already underscored India’s strategic and economic significance for the United States. Future policies should build on Obama’s vision but even more importantly translate it into an “all of government” effort that deepens the partnership on multiple dimensions.

This goal, however, could prove challenging and will require strong resolve. The second Obama term will likely confront a series of potentially serious dangers relating to Iran, Pakistan, Afghanistan, Syria, and possibly China—in addition to all the domestic challenges of accelerating a slow economic recovery. Given these realities, it is possible that the task of exploiting breakthroughs will be shortchanged amid the struggle to overcome calamities. In Washington, as in many other capitals, addressing the urgent invariably dominates engaging the important.

Strong U.S.-India relations will continue to be important for American interests in the years ahead.

But continuing the renovation of U.S.-India ties represents an opportunity to be realized rather than a crisis to be overcome. The difference between a distracted and a concerted effort to sustain a favorable Asian geopolitical equilibrium could set the course for the relationship. The evolving U.S.-India strategic partnership could simply languish as yet another historical curiosity embodying some vague potential or it could actually advance important common interests.

Looking Backward, Looking Forward

Alienation in U.S.-India ties was a hallmark of the two states’ relations for close to forty years. It derived from many irritants, including the U.S. relationship with Pakistan and the competing Indian affiliation with the Soviet Union. However, India’s problematic status in the global nonproliferation order was perhaps the most irritating.

India is a state with nuclear weapons but not a “nuclear-weapon state” as defined by the Non-Proliferation Treaty because it demonstrated its nuclear capabilities only after the treaty entered into force. This ambiguous standing effectively made India a victim of various U.S. policies aimed at restricting the spread of nuclear weapons. India’s unimpressive economic performance during the era of bipolarity did not help either. The disastrous interaction of autarky and dirigisme from 1947 to 1991 depressed its growth rates and made India less relevant to U.S. interests. This deprived both countries of the opportunity to engage in the economic realm. Such cooperation might have otherwise served to limit the acrimony that arose from their disagreements over Cold War coalitions and nuclear proliferation.

The demise of the Soviet Union removed the problems caused by rival alliances. At the same time, a major bout of liberalizing reforms promised a dramatic increase in Indian economic growth and renewed opportunities for deepened U.S.-India trading relations. Unfortunately, however, the nuclear issue flared again, and in 1998 India detonated a series of nuclear devices and declared itself a nuclear-weapon state. Although bilateral relations warmed considerably thereafter—after the strong U.S. condemnation of Pakistan during the 1999 Kargil War and a triumphant visit by Bill Clinton to India in 2000—neither Washington nor New Delhi was able to resolve their fundamental disagreement about India’s future in the evolving nonproliferation order.

The first term of George W. Bush’s presidency, which began in 2001, forged the conclusive transformation in U.S.-India relations. Bush’s interest in and admiration for the success of Indian democracy spurred an intense presidential commitment to a strategic partnership based on common values. This conviction, drawn from the idealist strands of American foreign policy, was complemented by an equally compelling necessity rooted in realpolitik: the need to build new ties with India to balance China, Asia’s other rising behemoth and a potential challenger to U.S. power.

Adding urgency to this calculation was the determination of senior Bush administration officials to build a new partnership with India because of the complications caused by September 11, 2001. The United States needed to ensure the commitment of Prime Minister Atal Bihari Vajpayee’s government to the global war on terror in partial compensation for Washington’s renewed, and visibly compromised, reliance on Pakistan.

Rejecting policies dating back almost thirty years, the president committed to new cooperation with India in four highly sensitive areas: civilian nuclear energy, civilian space, dual-use high technology, and missile defense. The breakthrough represented by this decision, labeled Next Steps in Strategic Partnership and unveiled in 2004, served as the earliest sign of a sea change in the bilateral relationship.

The Next Steps in Strategic Partnership initiative was decisive insofar as it signaled a breakthrough in U.S.-India strategic cooperation. Despite continuing disagreements over issues such as trade, Iraq, and the United Nations, with this initiative, both countries agreed to work together despite India’s continuing possession of nuclear weaponry. The substantive fruits of this initiative were meager in comparison to what was to come in Bush’s second term, when the engagement reached a new level with the civilian nuclear cooperation agreement with Prime Minister Manmohan Singh. Washington’s continuing civilian nuclear cooperation with India—first by the Bush administration and now by President Barack Obama in a variety of areas ranging from negotiating reprocessing rights to supporting India’s membership in various global nonproliferation regimes (not to mention in the United Nations Security Council)—has paid off. These choices played a decisive role in conveying to Indian elites and to the public alike that the United States was serious in seeking a new relationship with India.

The effort to integrate India into the global nonproliferation regime involved high political costs on the part of the United States. That U.S. policymakers were willing to pay such a price signaled how valuable they deemed the U.S.-India partnership to be in meeting U.S. grand strategic objectives—a clearer signal than rhetoric could ever provide. The resolution of the nuclear disagreement has thus decisively opened a floodgate of opportunities.

An Indispensable Relationship

Perhaps the most important task in this context is for both countries to appreciate the true meaning of their “strategic partnership.” In the United States, in particular, the costs borne by Washington for sponsoring India’s entry into the global nuclear regime have raised misguided expectations that New Delhi must demonstrate its gratitude through various compensating actions.

India is simply too big, too independent, too ambitious, and too complicated to ever be a willing and deferential handmaiden of the United States.

If this is the yardstick by which the U.S.-India strategic partnership is measured, then the prospects for success are indeed bleak. India is simply too big, too independent, too ambitious, and too complicated to ever be a willing and deferential handmaiden of the United States. It will never conceive of itself and its policies as successful only to the degree that they comport with and advance American interests.

Moreover, the decisive transformation of U.S.-India relations was not pursued by President Bush because of an expectation that aiding India would result in reciprocal acts of generosity toward the United States. Rather, it was pursued fundamentally out of American self-interest and was shaped by what U.S. policymakers believed was critical to the success of American aims in Asia. Given the rise of Chinese power and the impossibility of limiting that power through Cold War means, the Bush administration settled for the only strategy that made sense in circumstances where geopolitical rivalry coexists with economic interdependence: forgoing containment in favor of balancing.

The success of this strategy where New Delhi is concerned hinges not so much on what India does for the United States but on whether it rises rapidly enough to produce an Asian strategic balance that advances American interests. Washington’s extraordinary investments in India are thus oriented entirely toward supporting Indian ascendency, and success ought to be measured by the progress made toward reaching that pivotal goal. This approach, of course, does not relieve India of the necessity of making smart strategic choices. Indian statesmen should, simply as a matter of self-interest, be looking for ways to cement their strategic partnership with the United States as long as the relationship palpably buttresses Indian power.

But even if this were not the case—because Indian leaders turn out to be either myopic or distracted or astrategic—unilaterally bolstering the growth of Indian power remains fundamentally in America’s interests. It holds the best promise of limiting future Chinese domination in Asia without imperiling the gains from trade on which all regional powers, including the United States, have come to depend.

Maintaining a favorable balance of power in Asia is a prerequisite for preserving American primacy globally.

Maintaining a favorable balance of power in Asia is a prerequisite for preserving American primacy globally. Not without reason, therefore, have successive U.S. administrations of both parties pursued this unique, admittedly asymmetrical, strategic compact with India. President Obama has gone so far as to assert plainly that this relationship was destined to become “one of the defining partnerships of the 21st century.”

Next Steps for the United States

With this strategic framework and its history in mind, Washington should implement deliberate policies to strengthen both economic and security cooperation with New Delhi. Four specific ideas may be of value.

Structural Changes in Washington

The first and perhaps most important action that the United States can take to sustain the ongoing transformation in bilateral relations is to significantly restructure its government institutions that drive the U.S.-India relationship. An important institutional improvement would be integrating the India, Pakistan, and Afghanistan bureaucracies under a single directorate in the White House and bureau at the State Department. In conjunction, Washington ought to designate a senior official with specific responsibility for India, since it must be expected that Pakistan and Afghanistan will naturally consume substantial leadership attention in the foreseeable future. Such an official could provide consistent attention to India—an essential ingredient for sustaining this high-maintenance, extremely complex, and very important relationship.

Keeping India Involved on Afghanistan and Iran

Second, the next administration should seek continued Indian cooperation in achieving its strategic goals in Afghanistan and Iran. Partly because of disenchantment with Pakistan’s duplicity in counterterrorism operations and partly because of the recognition that Afghans often welcome Indian reconstruction activities more warmly than they do other international programs, the Obama administration has strongly endorsed Indian contributions to efforts in Afghanistan and urged their expansion. This policy is sensible. India has pioneered low-cost solutions that are not only sustainable by Afghan standards but also are supported by every major Afghan ethnicity (including the Pashtuns, who enjoy a plurality in Afghanistan) and directly strengthen the legitimacy of the national government in Kabul.

In the months ahead, Washington should encourage the Indian government to increase its contributions with an eye toward enabling a successful transition. Worthwhile Indian contributions include continued investment in Afghan infrastructure and resource extraction, agriculture and agro-industry, small- and medium-sized industries, and education and health. New Delhi could also assist Kabul in developing a national investment framework and could provide Afghanistan with duty-free access to the large Indian market. Supporting the education of Afghan civil servants and mentoring programs for Afghan government officials, providing accelerated training of Afghan military officers in Indian service academies, and contributing to the repair and maintenance of Afghan military equipment are all additional areas in which India could have an impact.

Beyond these material efforts, India’s most significant contribution to success in Afghanistan could be political, flowing from its close ties with the Afghan government and all the major ethnic groups within the polity. India is one of the few countries—and perhaps the only one in the region—that enjoys the advantage of having intimate relations with both Afghan government and opposition leaders simultaneously. It is thus in a position to influence their choices in a way that few countries other than the United States can. As Washington presses ahead with efforts at rapprochement with the Taliban, an endeavor that India is now reconciled to so long as it enjoys Afghan endorsement and supervision, the Obama administration must maintain full transparency about these conversations with New Delhi. India’s choices—along with Pakistan’s—will be one of the most critical determinants influencing the success of the undertaking.

India’s goals in this area are identical to those of the United States. Indian policymakers seek an Afghan government after 2014 that is durable, capable of preserving Afghanistan’s independence as well as its internal and external security, hostile to terrorism and extremist ideologies, and temperate enough to preserve both Afghanistan’s multiethnic character and the social, political, and economic gains witnessed since 2001. New Delhi dreads the prospect of renewed internal conflict not only because such an eventuality would put all its own investments in Afghanistan at risk but also, more importantly, because the onset of major strife would create the perfect incubator for terrorist groups that could threaten India, as happened throughout the late 1990s.

Likewise, it is increasingly in India’s interest to quietly demand of Iran complete compliance with United Nations Security Council resolutions on its nuclear program. India, perhaps more than any other state in Iran’s general neighborhood, still has residual influence with Tehran thanks to the countries’ common strategic interests in Afghanistan. Moreover, India remains a major importer of Iranian crude oil and the most important supplier of food and agricultural goods to Iran.

Most importantly, if a satisfactory solution to the Iranian nuclear crisis cannot be found soon, it is likely that a major military confrontation between Iran and Israel or the West will erupt sometime in 2013. While India admittedly has neither the standing nor the leverage to prevent such a meltdown, it would be affected most disastrously by this cataclysm. A confrontation could negatively affect India’s economic growth (because of rising oil prices), physical access to and interests in Afghanistan (which could not survive a protracted regional conflict), and internal communal harmony (the country’s large Shia population has old civilizational links with Iran).

Although India’s clout with Iran should not be exaggerated, it is in New Delhi’s interest to make the case for Iranian compliance more forcefully and visibly in Tehran.

Bolstering India’s Defense

Third, the time has come for Washington to seriously implement its long-professed strategic intention of building up Indian defense capabilities. For some time, the effort to strengthen Indian capacities in advanced technologies was hindered by the persistent uncertainty about whether New Delhi would be a trusted U.S. partner. In practice, this implied that India’s access to critical technologies, both military and dual use, was contingent on either New Delhi’s signing of certain “foundational” agreements or its support for various American positions on foreign policy or global issues.

Unfortunately, there is still substantial confusion in New Delhi about what these agreements actually entail. Additionally, there are significant constituencies within the Indian government that fear India’s agreement might either compromise or limit its freedom of action.

Because there are no fundamental conflicts of interest between India and America, aiding Indian defense programs and defense industrialization efforts remains in Washington’s self-interest no matter what the differences in tactics or styles may be between the two states.

These fears about these documents stem entirely from misunderstandings—a problem only compounded by politicization of these discussions in India. Moreover, strengthening India’s military capacity does not require New Delhi to sign these foundational agreements. The truly critical documents are the end-user-monitoring and the enhanced end-user-monitoring agreements, which ensure that U.S.-supplied military equipment is not illicitly sold, transferred, or modified, and India has already signed both of those agreements. Because there are no fundamental conflicts of interest between the two nations, aiding Indian defense programs and defense industrialization efforts remains in Washington’s self-interest no matter what the differences in tactics or styles may be between the two states.

The Obama administration, and especially the senior leadership in the Department of Defense, has internalized this conclusion completely and has committed to building Indian defense capabilities as part of its larger rebalancing to the Asia-Pacific region. As Secretary Panetta declared, “The United States is firmly committed to providing the best defense technology possible to India.”

During its second term, the Obama administration ought to pursue specific initiatives to take U.S-Indian defense relations to the next level. These efforts should focus on direct defense-industrial collaboration, since military-to-military relations and defense sales have already done very well. Current initiatives in both areas should nonetheless be expanded because raising the operational proficiency of the Indian military and expanding India’s inventory of U.S. defense equipment serve American interests.

The Department of Defense should review and fix the bureaucratic impediments to releasing licenses for information that can be shared by U.S. defense companies when responding to requests for information or proposals issued by the government of India. Creating a mechanism to expedite this release, on the presumption that export control authorizations would follow if U.S. manufacturers are successful in the bidding process, would go a long way toward resolving many irritants that currently plague bilateral defense trade. The administration should, at the same time, communicate clearly to its Indian counterparts how exactly India stands to gain from improved access to the items on the State Department’s Munitions List and the Commerce Control List.

Additionally, the Department of Defense should move quickly to implement a small number of joint research and development efforts with Indian research and development entities as pilots to prove the possibility of genuine defense cooperation beyond equipment sales. Many of the advanced technology programs in the United States reside in private companies, but the U.S. government is often the formal owner of technologies developed by and residing in private entities. As a result, the implementation of joint research and development efforts invariably involves license liberalization. Beyond that, the large number of U.S.-government-controlled defense laboratories offers opportunities for laboratory-to-laboratory collaboration with various Indian governmental counterparts. Moving quickly to identify and to implement specific proposals would demonstrate the U.S. capacity both to improve the Indian research and development base and to consolidate the partnership with key bureaucratic entities in the Indian Ministry of Defense.

Encouraging Indian Reforms

Fourth and finally, Washington should encourage the Indian state to accelerate the economic reforms required to raise the country’s growth rates to the highest levels witnessed during the last decade, if not higher. These much-postponed second-generation reforms are extensive, including measures to rationalize subsidies, labor laws, and manufacturing policy, reform Indian agriculture, expand public infrastructure, restructure inefficient public enterprises, improve the financial sector, and rectify India’s increasingly dangerous fiscal imbalances. Perhaps most importantly, the United States should push for an end to the many impediments that New Delhi has erected to sustained foreign direct investment in India to allow room for accelerated injections of capital to fuel India’s growth.

Washington should encourage the Indian state to accelerate the economic reforms required to raise the country’s growth rates to the highest levels witnessed during the last decade.

The United States should do everything possible to encourage the swift implementation of these reforms. They would open Indian markets to U.S. business, generating profits for those ventures. Successful market liberalization would automatically create expanded opportunities for American participation in India’s growth, with room for U.S. contributions in the form of increased capital, technology, and expertise transfers. The reforms would also increase America’s stakes in India’s success, thereby providing the best guarantees of permanent U.S. support for India even in the face of occasional political disagreements between the two nations.

Toward Genuine Partnership

In the years ahead, the United States can clearly contribute to deepening its bilateral partnership with India. But more than that, America can actually advance India’s own goal of increasing its national power and help secure a peaceful and prosperous Asia-Pacific region. The opportunities available to the United States and India are truly boundless.

Both sides have only just scratched the surface of their potential cooperation. But with the removal of the most important impediment facing their bilateral relationship during the last thirty years—India’s exclusion from the global nonproliferation regime—both governments need to get down to business if they are to achieve the deep cooperation that eluded both sides throughout the Cold War. At a time when the United States and India face the common challenge of maintaining a favorable balance of power in Asia, they cannot afford to fail.