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January 26, 2015

The strategic partnership

U.S and India have to overcome traditional modes of thinking in the defence establishments of their respective countries.

President Obama’s participation in India’s Republic Day celebrations on January 26 is more than a gesture. It is an attempt to advance the idea of a strategic partnership, which Washington has sought off and on since the 1950s but has not materialised partly because of India’s preference for non-alignment in international relations. Just as the Americans tend to seek allies overseas, India builds friendships and avoids alliances. An alliance implies dependence whereas economic and military self-sufficiency is India’s desire.

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India’s Republic Day celebrations commemorate the day the national movement led by the Indian National Congress declared complete independence (Purna Swaraj) from British colonial rule as their goal. Unlike several former British colonies, Indians were not content with being a dominion under the Queen’s or King’s titular reign. They wanted to be a Republic, which India became in 1949, just two years after the British departure from the subcontinent.

Indians and Americans share a commitment to democracy, federalism and their republics. But they have not always seen eye to eye in the realm of foreign policy. Obama’s Delhi visit comes less than six months after the Washington visit of India’s Prime Minister Narendra Modi. The frequency and intensity of high-level contacts reflect a growing desire for deeper US-India ties. But the two countries still remain separated by their respective definitions of a strategic relationship.

For the United States, a strategic relationship is one in which defence and economic ties are paramount. The US is closest to those countries with which it has a deep economic-defense partnership: Europe’s NATO members, Japan, South Korea, Australia, Canada and Israel. With these allies, the US maintains ties not only at different layers of government but also between the legislatures, academia, think tanks and corporations.

America’s alliance relationships are not affected by tenures of individuals in office or by short-term goals of administrations. The economic and military exchanges between the U.S. and its allies create interest groups, especially in Washington, but also in the private sector that deem the foreign relationship critical.

But India’s nonaligned foreign policy and its aversion to military alliances has not created tie-ups between India and the U.S. that are similar to those between the U.S. and, say, Israel, South Korea or Japan. Over the last six decades, India accepted economic and some military aid from the US but it did not pursue the sort of defence ties that result from buying U.S. military equipment on concessional terms or integrating the training of officers.

In its pursuit of independence and self-sufficiency, India bought arms from a variety of sources and sent its officers to train with the forces of several countries, including the U.S. and the Soviet Union at the same time during the cold war. American generals and defence suppliers had closer ties for years with Pakistan than they did with India because Islamabad pretended to be Washington’s ally while Delhi abjured an exclusive alliance relationship.

The relationship changed after the end of the Cold War. In 1995 India and the US agreed to set up a Defense Policy Group (DPG) and Joint Technical Group (JTG). A decade later in 2005 they signed a ‘New Framework for the US-India Defense Relationship” that established a new subgroup on Defense Procurement and Production.

The US-India Defense Trade and Technology Initiative (DTTI) of 2012 was meant to expand defense trade and technology cooperation. During Obama’s visit, India and the US are likely to sign a new 10-year defence framework agreement. But India will still be different from US allies that buy US defence equipment without insisting on learning how to make it on their own.

Most Americans see India as a counterpoise to China, which is clearly a rising military power in addition to being an economic giant. But the US has been slow to appreciate Indian concerns in relations to Pakistan-backed terrorism, which does not enhance Indian trust in a receding superpower seen widely as fickle, at least in India’s backyard.

The slow pace of India’s economic reforms have undermined its capacity to compete with China. Still, India is the world’s top importer of major arms accounting for 14 percent of global arms imports. Over 70 percent of India’s defence equipment needs are currently met through imports. From 2009-2013, Russia accounted for 75 percent of Indian arms imports whereas 7 percent came from the US and 6 percent from Israel. In 2014, Indian defense procurements from the US were worth about $15 billion.

Most US defence sales to India are through the government–to-government or FMS (foreign military sales) route rather than through DCS (direct commercial sales). In late 2012, cumulative FMS sales to India were valued at over $8 billion. In 2015, India is expected to complete several large defense purchases from US companies: over $1 billion for Sikorsky Aircraft’s S-70B Hawk helicopters, and over $2.5 billion in orders for Boeing’s AH-64D Apache and CH-47 Chinook helicopters. But from America’s point of view this is only a small proportion of the estimated $250 billion India is expected to spend on military acquisitions over the next five years.

India’s private sector was allowed to enter the defence market in 2001. As of 2013, however, the Indian private sector has a share of only 6 percent share in the country’s defence spending with the public sector defence enterprises and major foreign companies continuing to play a key role.

In an attempt to incentivise corporate participation the government raised the cap on foreign investment in  the defence sector from 26 percent to 49 percent and also removed the strenuous license requirements on 60 percent of defence products for private manufacturing companies. At the Vibrant Gujarat summit Mr Modi also pledged “to cut red tape, pursue predictable policies, ensure stable taxes and make India the ‘easiest place’ to do business.” Presumably, this would apply to the defense sector as much to other areas of the economy.

India-US bilateral trade ties stand at around $100 bn in goods and services. The two countries seek to boost this to as much as $500 bn. Secretary of State John Kerry expressed hope that “Together, we can create an environment where all of our companies play leading roles in bringing cutting-edge technologies, equipment, capital, and know-how not just to India but to countless countries that need this growth and development now.”

It is unlikely this goal will materialise without expanded Indian purchase of US military technology and enhanced defence cooperation. Obama and Modi have to overcome traditional modes of thinking in the defence establishments of their respective countries to make that happen. The US will have to accept the fact that India will not be a formal ally like some of its other partners; India will have to recognise that acquiring state-of-the-art US military technologies comes at a price. 

Photo: Christian V


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