From Non-Alignment to Realignment

Excerpt

The US and India expanded cooperation across various domains in the second reporting period of 2023. The two moved to materialize projects and initiatives that were conceived in the first quarter, in wide-ranging domains with significant geopolitical and geoeconomic scope including defense cooperation, critical and emerging technologies, and infrastructure development. While New Delhi continued to straddle groupings such as BRICS, Shanghai Cooperation Organization, and the Quadrilateral Security Dialogue, the US-India partnership broke ground on more initiatives than any of India’s other bilateral relationships. Modi and Biden visited each other’s capitals and reaffirmed their commitment to a rules-based international order. The rousing reception Modi received in Washington and the continued US preeminence in most major trade and technology initiatives conceived by India highlighted the growing partnership between the two democracies. And the two leaders, while facing elections next year, seem willing to work together on common global priorities—sometimes at domestic political costs.

Also, while taking place outside the May-August reporting period, the enormous groundwork Delhi laid over the summer (and earlier), plus the absence of Xi Jinping and Vladimir Putin, transformed the G20 meeting that took place in September into an event that showcased India’s leadership in finding common ground between the priorities of the Global South and the US. The result was potentially transformative geoeconomic initiatives that could reshape geopolitics, and encourage, for example, the conditions necessary for a free, open and inclusive Indo-Pacific. This wasn’t the India of nonalignment; this was an India shaping a realignment, with tacit US support.

Democracy is Boisterous

In India, the months between May and August witnessed the clamor associated with election season, although in this case, it was the year before national elections. Arbitrary and historical issues filled headlines over pressing matters of economic or national security concern.

Meanwhile, Delhi worked on feats such as landing a rover on the dark side of the moon. On Aug. 23, the country celebrated as India’s spacecraft, Chandrayaan-3 successfully landed on the lunar south pole, making India the fourth nation to successfully land on the moon and the first on the lunar south pole. Space has been an arena for increased cooperation between the US and India. The Modi administration embarked on a privatization drive of the space industry, opening it up to private investors and players in the private sector. The success of the mission, coming on the heels of privatization measures and expanding US-India cooperation, was welcomed by policymakers in both nations.

Given the nature of politics and media in a democracy, some tried to turn the success of the mission into a debate over attributing credit to different leaders, with the immediate distraction coming in the form of comments surrounding the Hindu faith by a political leader in the Southern part of India; and soon after there was debate surrounding the name of the nation itself. In late August, invitations to the G20 went out with “Bharat” over India, sparking commotion throughout the nation. Historical debates surrounding the etymology of the word’s origins in Hindu religious texts only subsided when the event convened in early September.

The clamor was not limited to political and cultural issues. Between May and July, unusual weather affected crop cultivation across parts of India, shooting up risks of inflation. In response, the Indian government instituted a ban on rice exports affecting the price of rice around the world. As one of the world’s largest exporters of rice, the export ban squeezed the rice market and shot up the price of the staple by 20% in select markets across the Indo-Pacific region where rice is largely consumed.

Similarly, with the US going to the polls next year, a wide range of issues tested Biden’s presidency, including wildfires that raged across the island of Maui in Hawaii, storms in Florida, the relentless war in Ukraine. Another serious issue was the administration’s slow walk-back of its initial hawkishness toward China. Over the summer, the administration made repeated attempts at thawing relations with China by sending several high-ranking officials to Beijing. These overtures in hope of stabilizing relations have not paid dividends.

These domestic pressures could influence the administration’s foreign policies, and affect US-India relations. For example, the catalyst for expanded cooperation between these two democracies has been the shared concern over a rising, belligerent, and expansionist China. Since the COVID-19 pandemic, the US and India have faced China’s repeated violations of their sovereignty. India lost men in the border clashes at the Galwan valley in 2020, and this year the US came to discover spy balloons and secret police stations across the nation, which may be used to harass dissident communities.

The bone of contention since Russia’s invasion of Ukraine has been the divergence in views between US and India surrounding Moscow. Domestic pressure in the US, especially coupled with inflationary pressure and a rolling debt crisis raise questions on increasing US financial commitments to Ukraine. A recent poll by CNN found that the majority of Americans opposed giving more aid to Ukraine. Right or wrong, supporting Ukraine with aid and addressing domestic issues are increasingly viewed by some voters as a zero-sum endeavor. This could pressure Biden vis-a-vis Ukraine.

There are other domestic US issues with trajectories difficult to predict. Speaker of the House Kevin McCarthy, under pressure from Freedom Caucus Republicans, opened an impeachment enquiry against the president. The migrant crisis is no longer limited to border states. With less than a year to elections, domestic pressures could unpredictably affect Biden’s foreign policy.

At the recently concluded G20 event, despite fears that the leaders would not be able to find consensus, the group managed to settle differences and agree to a statement raising concerns over the war in Ukraine without naming Russia—the US has supported Ukraine in the conflict, while India has thus far declined to speak out against Russia. While speculations ran amok, the watered-down message may have been the US helping India save face at the G20. With tensions surrounding the Russia-Ukraine war relatively contained, Modi capitalized on Xi and Putin’s absence at the G20 meeting to introduce several initiatives with the US, such as the one with Brazil, South Africa and the US, the Global Biofuel Alliance and the India-Middle East-Europe corridor promoting trade and connectivity from the shores of India to the shores of Europe.

Geoeconomics (albeit with geopolitical implications), continued to be a lynchpin for increased cooperation between the world’s largest and fifth-largest economy.

Trade as National Security

As noted in earlier chapters of Comparative Connections covering US-India bilateral relations, the Indian economy has come a long way from the days of a “license raj” marred by socialist regulations to one now being positioned as a friendly shore for supply chain diversification and more. Dregs of the raj era still clog parts of the system however and the Modi government has embarked on a reform drive to liberalize, privatize, and shape policies to positively affect the investment climate. Since the term “friend-shoring” came into parlance a few years ago, the US has consistently positioned India in that context and explored supply chain diversification opportunities across various sectors.

During their trips to New Delhi, Treasury Secretary Janet Yellen, Secretary of Commerce Gina Raimondo, and US Trade Representative Katherine Tai emphasized India’s role as an alternative to China. Moreover, at the Semicon India conference—a large-scale conference on semiconductors and other critical technologies organized in the western state of Gujarat—several US conglomerates discussed their interest in establishing manufacturing in the country.

There weren’t just grand statements; there were several acts of walking the walk. For example, India and the US decided to settle all outstanding trade disputes at the WTO, and Indian Ambassador to the US Taranjit Singh Sandhu signed the Artemis accords for increased space cooperation. In late July, Special Presidential Envoy for Climate John Kerry met with counterparts in the Indian government to explore India’s potential to be a key manufacturer of electric vehicles.

Cooperation, or at least the stated intent to grow cooperation, in trade, supply chains and critical technology has become a mainstay of US-India relations. Even on the margins of the G20, US and India settled trade disputes, finalized purchases of drones and other defense equipment, and announced new geoeconomic and geopolitical initiatives. Slicing the BRICS grouping, India brought the US into a group with South Africa and Brazil now known as the IBSA. Furthermore, several nations formed the Global Biofuel Alliance. Probably the most geoeconomically significant development was the India-Middle East-Europe trade corridor established to promote connectivity between these regions. Dubbed an alternative to China’s Belt and Road Initiative, this connectivity project announced at the G20 event Partnership for Global Infrastructure and Investment aims to stimulate economic development through enhanced connectivity across two continents. While these initiatives were conceived by policymakers, all have a large private sector role, making their foundation stronger and their shelf life longer.

A bone of contention for big businesses trying to operate in India has been the difficult operating environment. Threats of China’s weaponization of interdependence and economic coercion have pushed policymakers in Washington and New Delhi to drive policy changes with relative urgency, giving confidence to select businesses interested in operating in India. The increasing intersection of national security and trade policymaking that initially raised concerns in business circles is now encouraging the development of economic engagement with India’s large market. For example, US and Indian conglomerates are beginning to explore complimentary attributes across verticals in the critical technology and defense sectors. For US businesses, these collaborations provide access without the bottlenecks they’d face when operating solo. For Indian conglomerates, these partnerships give them access to advanced technologies and a leg up as they compete with the technological giants of China.

Akhil Ramesh is a Senior Resident Fellow at the Pacific Forum. Cleo Paskal is non-resident senior fellow for the Indo-Pacific at the Foundation for Defense of Democracies (FDD). Follow her on X @CleoPaskal. FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.

*Published September 2023 in Comparative Connections · Volume 25, Issue 2 (This article is extracted from Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific, Vol. 25, No. 2, September 2023. Preferred citation: Akhil Ramesh and Cleo Paskal, “US-India Relations: From Non-Alignment to Realignment,” Comparative Connections, Vol. 25, No. 2, pp 59-70.)