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India Looks East and West

Tuesday, September 17th, 2013
india looks

If it is true that the Roman God Janus looked both backward and forward, it is equally so that Indian diplomacy gazes both to the east and West. Satu Limaye, an Oxford Ph. D, and director of the East-West Center in Washington, explains the key issues as Delhi sees them regarding the US and then East Asia.
Regarding Washington, Pakistan and Afghanistan loom large. As context, he ex­plains that “India’s conflictual relationship with Pakistan growing out of competing nationalism, partition, disputed territory -- most notably Kashmir -- and subsequent wars and crises mean almost any relations between the US and Pakistan are suspect.
Limaye adds that “Pakistan’s known role in several terrorist attacks against India makes Delhi highly suspicious that Paki­stan can be a credible partner in anything. On the Taliban specifically, many Indians, and some Americans, he stresses “strongly disagree that Pakistan is a credible partner and believe that it will seek to Talibanize Af­ghanistan soon after US troops leave.” But during his visit to Delhi in February, Limaye found that Pakistan did not dominate con­cerns as much as it did in the past. However it always remains just below the surface.
Regarding American-Indian cooperation against terrorism, Limaye explains that, “There is certainly more shared interest and I would think shared information, but in Delhi there are long running doubts that the US treats terrorism against India in the same way” as it regards attacks against itself.
How about defense cooperation? Wash­ington–Delhi defense cooperation has grown astoundingly over the past few years, and particularly since the mid-2000s. America made almost US$8 billion in sales and even offered to India the sale of multi-role combat aircraft,” although India finally bought the weapons elsewhere. “But while trends are positive, disagreements over key agreements required for defense coopera­tion, differences in procurement and acqui­sitions systems and unclear end states for defense cooperation continue to inhibit the relationship.”
At the turn of the decade, Limaye found that Washington and Delhi were at odds over the Doha round of global free trade talks, but these tensions were not “front and center of the bilateral relationship.” The US and India have a range of complaints about each other’s market access, including on farm exports, multi-brand retail and most recently solar panels.” However, “The fact that India and the US are seeking to negoti­ate a bilateral investment treaty is a positive development but will not address trade and visa frictions. Most importantly, the slow-growing Indian economy threatens to blunt – at least in the short term – American en­thusiasm for commercial opportunities in India. Both countries have taken a number of cases to the WTO arbitration panels and the outcome of some of the cases is not yet known.”
The Obama administration expressed concern in 2009 that US tax provisions make it easier to “create a job in Bangalore, India, than if you create one in Buffalo, New York.” But Limaye insists that the first state­ment was merely “in the campaign and not terribly relevant.” But alongside Congress, the White House then moved to limit tem­porary skilled worker permits and visas that Indian professionals need to work on site at software firms -- thereby irritating India. Again, Limaye soothes roiled waters: “India is and is likely to continue to be a major recipient of US visas.” In fact, “It may well be that comprehensive economic re­form could open up more opportunities for Indian professionals.”
What about the civil nuclear deal that was supposed to draw the two countries much closer together? “It has certainly not been implemented to mutual satisfac­tion. While a recent deal for Westinghouse has given some hope, the issue of nuclear liability continues to constrain full imple­mentation. It is not just the US that has complained about this matter but other potential civilian nuclear suppliers such as France and Russia as well.”
More generally, Limaye judges that “It has certainly improved relations, but not sorted out real differences on issues ranging from climate change change to Pakistan to Iran.” In fact, regarding climate change, in 2009 the Indian Environment Minisiter Jai­ran Ramesh told US Secretary of State Hill­ary Clinton that India has among the lowest emissions per capita and so rejects pressure for cuts or the threat of carbon tariffs on Indian exports to America. She retorted that she does not aim to hinder India lift­ing millions out of poverty. India rejected restrictions, but did --vaguely -- pledge that it would reduce the “intensity” of its emis­sions.
“There is still a wide gap between US and Indian thinking on climate change, and with regard to President Obama’s attention to climate change in the second administra­tion, more intense discussion at the bilater­al level and in the international context will have to take place to narrow differences on issues ranging from binding limits, technol­ogy transfer and financing.
Iran is also a sticking point. Delhi sup­ported a 2009 U.N. resolution that criticized Tehran for its nuclear ambitions. But the latter -- pointedly -- also called for more dia­logue between the Persian Gulf nation and the US and spurned any attempt to make the world body’s measure the basis for any punitive or confrontational approach. “In­dia has voluntarily reduced some purchases of oil from Iran but Iran will continue to be an important regional actor for India.”
A cardinal step forward for India was the 2009 free trade pact with the Association of South East Asian Nations. Why were the talks so drawn out? Limaye answers it was because “there were many items that had to be painstaking negotiated on each side,” for instance on such commodities as pep­per, palm oil, and many others, too.” But the pact is working for both sides because trade is growing.
As the Indian face turns east, China dom­inates diplomacy. For example, three years ago, Delhi actually took Beijing to the WTO over charges of the latter dumping toys, tires and iron. But then both giants set up a working group to solve such tensions be­fore they reach the trade body. Limaye judg­es that it is “too early to tell on the work­ing group and new economic dialogue but I note trade fell between the two.”
He underscores that, “Most importantly, the asymmetric trade between India and China continues to rankle Delhi. Basically, India provides raw materials – iron ore for example – and China exports manufactured goods to India. Neither is happy. “India’s Look East policy did not start because of China but surely that is a bigger consider­ation in that policy now.”
Finally, Limaye turns to Northeast Asia: “India’s relationship with South Korea is steadily gaining traction. With a Compre­hensive Economic Partnership Agreement (CEPA) in place, trade has exceeded US$20 billion and is expected to double during the next 3-4 years. While there are few Indian companies operating in South Korea, South Korean companies are very active in In­dia— appliances and mobile technology in particular. However, India still seeks greater investment by South Korean infrastructure companies and total foreign direct invest­ment remains very small.”
On the security front, “India has opposed North Korea’s violations of its nonprolif­eration commitments,” notes Limaye, “and there are press reports that India acted on efforts by North Korea to proliferate materi­als by ship. It is likely that India and South Korea have consulted in these cases.”

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