US-India Relations: An Important but Ambiguous Partnership

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Jack Capizzi:  Hello, everyone, and welcome to today’s Federalist Society virtual event. This afternoon, Monday, October 2, we are discussing US-India Relations: An Important but Ambiguous Partnership. My name is Jack Capizzi, and I’m an Assistant Director of Practice Groups at The Federalist Society.

As always, please note that all expressions of opinion are those of the experts on today’s call. After our speakers have given their remarks, we will turn to you, the audience, for any questions you might have. If you do have a question at any time, please type it into the Q&A function at the bottom of your screen, and we’ll handle them as we can towards the end of today’s program.

With that, I’ll turn it over to our moderator today, Nitin Nainani, who is a student liaison for the International and National Security Law Practice Group. Nitin, over to you.

Nitin R. Nainani:  Thank you, Jack, and welcome to everyone joining us this afternoon. Today, we’re going to discuss the US-Indian relationship, which has gotten renewed attention as of late, particularly with Prime Minister Modi’s highly publicized visit to Washington in June.

In the lead up to that visit, which included a state dinner and an address to a joint meeting of Congress, Kurt Campbell, President Biden’s top advisor for the Indo Pacific, had expressed hope that it would consecrate the US-India relationship as the most important bilateral relationship of the United States on the global scale.

And certainly, the US and India have deepened cooperation on defense, public health, and economic matters in recent years. Yet Campbell and others have also asserted that India will not be an American ally and that expectations should be tempered. If you’re not quite sure what this means exactly, hopefully, we’ll give you some clarity in the next hour. We’ll talk about how bilateral relations have changed since the Cold War era and then also consider possibilities moving forward.

I’ll start first by introducing our distinguished guest, and then we’ll go into about 30 to 40 minutes of directed questions and answers. To reiterate what Jack said, audience members are encouraged to leave questions in the Q&A box. And if your question lines up with one that I’m asking, I’ll try and incorporate it during our structured questions portion, but if not, I’ll get to it afterwards.

So without further ado, I am honored to introduce today’s guest, Sadanand Dhume. Mr. Dhume is a Senior Fellow at the American Enterprise Institute, where he writes about South Asian political economy, foreign policy, business, and society with a focus on India and Pakistan. He is also a South Asia columnist for the Wall Street Journal.

He has worked as a foreign correspondent for the Far Eastern Economic Review in India and Indonesia and was a Bernard Schwartz Fellow at the Asia Society in Washington, D.C. He holds a bachelor’s degree in sociology from the University of Delhi, a master’s degree in International relations from Princeton, and a master’s degree in journalism from Columbia. Sadanand, thank you for joining us today.

Sadanand Dhume:  Well, thank you for having me, and thank you to The Federalist Society.

Nitin R. Nainani:  So I’ll start things off today with a historical question. Many look at the US-India relationship and think that a close partnership was inevitable. After all, India is the world’s largest democracy, and the United States is the oldest democracy. But for most of the Cold War period, US-India relations were relatively tense. Could you give our audience some context as to why?

Sadanand Dhume:  Yeah, it’s a great question. And to answer that, I would step back about a hundred years from now into history. Around 1920, Gandhi—known as Mahatma Gandhi—became the leading figure in the Indian nationalist movement and changed the nature of that movement from a small group of Western-educated Indians who wanted a greater share of power from the British colonial authorities to a mass movement that eventually settled on the goal of removing the British entirely from India.

What happened over that period from, say, around 1920 to 1947, was that the nationalist movement in India, it developed first and foremost as a kind of anti -- with an anti-imperialist ideology. And you also had a sense among most of the leading figures that trade and market economics were things to be suspicious of, to be wary of, because these were tools that had been used to subjugate India.

Fast forward to 1947, India gets independence. At the same time as it gets independence, British India is partitioned into two different countries: India, which has a secular constitution—but it didn’t have a constitution in ’47, but it got its constitution 2 years later—a secular -- ostensibly secular republic with a Hindu majority, and Pakistan, which is an Islamic republic.

And what you had from the very start in India was this very strong belief, led by the first prime minister, Jawaharlal Nehru, that the whole point of independence for India was that it would not -- it will be free to make its own decisions in foreign policy and its decisions about its foreign policy and outlook would no longer be made in London.

And so that was the idea, and that was the idea behind the policy that India followed called non-alignment. And this almost immediately brought it into a certain amount of, if not conflict, but at least disagreement with the US. As you know, the 1950s was the heyday of the Cold War.

John Foster Dulles very famously was of the view that if you were not with us, you were effectively against us. And the Indians were trying to thread this needle and trying to be, at least in theory, equidistant between Washington and Moscow because they felt that they had just won independence, and they wanted to safeguard that independence. In reality, as the decades went on, India drifted more closer and closer towards the Soviet Union.

The second part that kept the US and India apart was that -- something I alluded to earlier, which was that India, after independence, chose a planned economy as its model. Nehru himself had been inspired by what he saw as early successes in the Soviet Union towards rapid industrialization, the movement of a society from an agrarian society to an industrial society.

He was very influenced by British socialists, in particular the Fabians, who were not full-blown communists, but they believed that, over time, the state should control the commanding heights of the economy. And both of these things, the foreign policy doctrine of nonalignment and the economic policy that was led by the state and the so-called planned economy over time kind brought the -- moved India more and more towards the Soviets, even though it was always officially not aligned.

And this was compounded by the fact that Pakistan, from the very start, adopted a very -- a relationship that was very close to the US. Pakistan used to be called America’s most allied ally. And so all of this together led to the fact that even though you’re absolutely right, India was the world’s largest democracy ever since it started having elections with universal suffrage in 1951.

But no one, in those days, used to say that India and the US are natural partners or natural allies because they’re the oldest and world’s largest democracy. That’s a phrase that only came into use much more recently after the end of the Cold War. And that’s the reason why, despite there being democracies, they were not particularly close during most of the Cold War.

Nitin R. Nainani:  So I guess to follow that up then, I want to talk a bit about the end of the Cold War. And when do you think the shift in bilateral ties, where things begin to fall, really started? And what factors would you attribute this to, not just in relation to the Cold War, but also -- I guess, I’m asking with 9/11 as a reference point as well?

Sadanand Dhume:  Yeah. So I would say you could pick a few landmarks, right? One, of course, is the end of the Cold War. And though I think American officials are quite -- don’t say this publicly and they try to be tactful as they should, the fact is that at the end of the Cold War, if you looked around the world, I think it’s fair to say that India was one of the big losers.

They had bet wrongly in terms of their economic model. They had seen countries that had been not that much ahead of India or, in some cases, even behind India, outstrip India very dramatically economically—not just the Northeast Asian economies like South Korea and Taiwan, but even Southeast Asian countries like Indonesia. So economically, the Indian experiment with state planning and the planned economy had just -- had not worked out.

And in terms of foreign policy, if we were to oversimplify a little bit, India had basically backed the wrong horse. They had bet on the Soviet Union, and very clearly, the US had come out -- emerged triumphant. So that is one very big factor which starts to force a kind of rethink in New Delhi.

Fast forward to 1998, and India conducted nuclear tests. And even though that triggered sanctions from the US in response, in the end, the nuclear tests also forced the US to look at India more closely and towards the second -- in the second Clinton term, they began this deeper US engagement with India.

This led to the nuclear deal which happened in 2005, 2006, where the US actually carved out an exception for India in the Non-Proliferation Order, which was basically to say that even though India had not signed the Nuclear Non-Proliferation Treaty, it had acted responsibly; it had not exported nuclear materials, and so on, and therefore, it should be kind of brought into the league of responsible nations, despite having test not being a treaty -- a signer of the NPT, along the way, you had 9/11, as you mentioned.

And I think what 9/11 really did was it cemented this idea that India was a large pluralistic democracy. And if you were to drive from, say, the border of India, you could go all the way to Israel without really passing through any other stable, multi-ethnic, multi-religious democracy. And that really heightened some of the rhetoric that we saw about shared values.

So all these things together created an impetus. But the most important thing, I think, which is, of course, now front and center, was that fairly early on, I think the US could see that China was rising and that India was going to be some kind of natural balancer or natural counterweight, not by itself, but as one of a group of important nations in the region—the others, of course, including Japan, Australia, and so on.

So you see some of that, too. And I would argue that out of all the factors that I’ve mentioned, the China factor was probably already -- it’s become much more important over the years, but it was already visible 20 years ago.

And finally, the last factor which I shouldn’t forget was that from 1991 onwards, India began to reform its economy. It began to become a more market-friendly economy. It rejected state planning. It slashed tariffs. It ended the so-called License Permit Raj, which was a draconian system under which bureaucrats sitting in the federal capital could decide -- make all kinds of economic decisions, including for private businessmen.

And when India started doing that, its economy started growing much more rapidly. Let me just give you a very quick figure over here. In 1990, India’s GDP was $320 billion. And now, it’s roughly around $3.7 trillion. So it’s been a pretty spectacularly -- it’s grown quite spectacularly compared to India’s past.

But even compared to most other countries—obviously not including China, and we can talk about that a little bit later—but on the whole all these things coming together, the end of the Soviet Union, the opening up of the Indian economy, the Indian need to sort of find its way in this new world, which is led by the United States, all these things started coming together.

You could also toss in the fact that there was a large, successful Indian diaspora that acted as a bridge between the two countries. So it’s a kind of complex mix. But by 20 years ago, I think you had the ingredients that are in place. And basically, even today, if you look at the US-India relationship, those same ingredients remain in place.

Nitin R. Nainani:  So you’ve touched on a lot in that answer. And in particular, it’s clear that bilateral ties improved during the Clinton years, particularly during the second Bush administration. And this momentum has seemingly continued under Obama, Trump, and now Biden. On the domestic level, this is a period that we’ve come to associate with increased political polarization in the US, even on some foreign policy issues. But there’s bipartisan consensus about the importance of strong relations with India. Why would you say that is? And could you lay out the core American interest here?

Sadanand Dhume:  Yeah. I think that the balance -- it’s been a balance of different things. The balance has shifted over time. I would say primarily today, if we were having this conversation today, it’s basically -- overwhelmingly, it’s because of a shared interest in preventing China from becoming a hegemon in Asia and the world.

Now, Indian doctrine, India wants to see a multipolar world, and it increasingly recognizes that it cannot have a multipolar world unless there is a multipolar Asia. So that makes, in many ways, there’s a natural convergence of interest over there.

India is now the world’s most populous nation. It has more than 1.4 billion people. It has an economy that’s much smaller than China’s, but it’s still a reasonably sized economy. It has very large armed forces. It has a 2,200 miles disputed boundary with China. It’s one of the only land boundaries. And if you don’t count Bhutan, which is a very, very small country with a very small boundary, it’s the only land boundary that the Chinese have not settled so far. So there’s a live dispute.

There was violence on that boundary in 2020 where more than 25 people lost their lives. And so all that means that India naturally, for its own interests, is going to resist Chinese hegemony in the region. And that naturally dovetails with the American interest in the region.

And I think that’s really the heart of it right now. And we can talk about some of the other elements, including the rise -- the Indian market becoming more important and the values component, which I would argue—and maybe we can get into this later—is going to become less important. But basically, that’s been the tripod so far.

Nitin R. Nainani:  Great. Switching gears a little bit to the Indian perspective a little bit more, do you think that India’s strategic doctrine has changed in particular since Prime Minister Modi has come to power, or has there been continuity there?

And I want to combine this with a great question we have from the audience. As these shifts are taking place where bilateral ties are improving, how much has the US held to or judged by previous administration’s policies? I think the question is getting at, is the Indian government or public suspicious about the US now wanting closer ties?

Sadanand Dhume:  Yes. There’s been a great deal of continuity in Indian foreign policy. And I think that if you look at both the Manmohan Singh government, which was in power for 10 years, and the Modi government, which is now coming up on 10 years, they’ve both wanted to see India emerge as what they call a leading power in the world.

They both are invested in the idea of a multipolar world in which India will serve as one of the poles and one of the major poles. Both of them recognize that economic development is central to India’s future, and they prioritize that, though, even though the policies that they followed to achieve that have been different.

There is a slight difference where I think that the Modi government—which is of a Hindu-nationalist persuasion—uses some language at parts that would not have been used before. They use a term called “vishwaguru,” which means teacher to the world.

And so they have this cultural -- religious/cultural element to their diplomacy and their worldview which did not exist previously -- certainly did not exist explicitly. And they would like to see India as a leading power also in cultural terms. But broadly, I would say there’s continuity.

The other big difference, I think, is that the Modi government has been much more willing to explicitly tilt towards the US than its predecessor. Some of this has to do with -- we should thank Xi Jinping for some of that. The fact that he has pursued quite an aggressive policy towards India has driven India closer towards the United States.

But if you look at things like military agreements between India and the US, if you look at things like India’s willingness to participate in the Quad, which is a grouping of the US, Australia, Japan, and India at higher and higher levels, it just shows that what was an argument that once had a lot of sway in New Delhi, which is that try to balance, try to be equidistant, try not to be too explicitly close to the US because it may upset the Chinese, that argument no longer really holds in New Delhi particularly since the conflict that we saw on the boundary between India and China in 2020.

Nitin R. Nainani:  So you’ve already mentioned the importance of China in strategic ties. I want to get a sense as to whether there are differences, though, in what both the US and India are looking to get from bilateral cooperation. And even for that matter, are there distinctions between how the United States and India would prefer to address areas of shared concern—China being one of them?

Sadanand Dhume:  I think the big -- for the US, the challenge is that the US is trying to uphold what’s known as the liberal international order. And the biggest threat to the liberal international order—the set of rules and norms that have governed the international system since the end of World War II—obviously, is the rise of a revisionist China along with the rise of a revisionist Russia.

India is interested in that order not collapsing but in a different way. India recognizes that, right now, the alternative to the US-led order would be a Chinese led order. And such Chinese-led order would be worse for India than the current US-led order. But what we’re seeing over and over, for example, in India’s response to the Russian invasion in Ukraine, is that India does not, in fact have any particular attachment to the rules and norms of the current order—at least that would be my assessment.

So I think the US would like, obviously, in an ideal world, for India to be fully on board with supporting the current order, for India to be more like, say, a country like Japan or like Australia or even France. Whereas, in fact, what we’re seeing is that India is willing to support the order when it suits India’s interests, and it’s willing to -- it wants to pick and choose. I think that is one challenge.

And currently, at least it seems like the Biden administration has decided that because of India’s size and because of its strategic location and so on, it’s better to have India partially on board than to have it not on board at all. But that does show where the vision of the two countries, what the world should look like, is somewhat different.

Nitin R. Nainani:  We’ve talked about India’s economic liberation, which started in the 90s. Today, India is the world’s sixth largest economy and continues to grow. I’d like to discuss some of the progress that’s been made in the economic cooperation and then would appreciate your thoughts on whether there’s an untapped potential in this particular dimension and, if so, what sort of challenges remain that make closer cooperation difficult.

Sadanand Dhume:  If I’m not mistaken, India is now number five. There was some sort of press coverage that India had in fact overtaken the UK. It’s the fifth largest economy at market exchange rates, and it’s been the third largest economy in purchasing power parity terms for a long time.

But according to several investment banks, it looks like India is on track to become the third largest economy in the world, by—depending on who you believe—either by 2027 or 2030. But either way, within the next few years, India will have the third largest economy in terms of the total GDP.

There’s obviously enormous potential upside because even though in absolute terms India has a very large GDP, in per capita terms, India remains a poor country. Its per capita income is roughly around $2,200 at market exchange rates. So a lot of the rise of Indian GDP has been driven, to a degree, by a rise in productivity, but it’s been driven also to a very large degree by just the fact that India’s population has grown so much faster than the population of other large economies, right?

So if you compare the Indian economy to the British economy or the German economy or the French economy or so on, the reason India has overtaken them is not only because Indians have become more productive. It is largely because there are just a lot more Indians relative to the number of Brits or Frenchmen and so on than there were 50 or 75 years ago.

So that’s always a potential upside. A lot of the people in business tend to look at India as an opportunity as potentially following in the footsteps of China. But I think India has many, many problems that it has to overcome. And at least in the West, I think we don’t pay enough attention to them.

One of the really big problems is that no country—except for a few small countries with a lot of oil and gas—no country has managed to go from being poor to being rich without industrializing at some point. And India has really struggled with this.

If you look at the breakdown of the Indian economy, almost half of India’s workforce—over 40% of India’s workforce—is engaged in agriculture. The vast majority of the people who are engaged in agriculture are farmers who farm very small pieces of land by Western standards or by American standards, if they’re small pieces of land. And the size of those farms has been declining over each generation.

And the challenge that India has faced and continues to face is somehow, how do you get hundreds of millions of people -- how do you move hundreds of millions of people off these unproductive small farms into factories? In the 1950s, they tried to do this by getting the government to invest in heavy industrialization. That didn’t really work out.

From the 1990s, they tried a little bit more of a free trade model, hoping that they would attract investment. That hasn’t really worked out. Under Modi, they are trying to use subsidies to attract investment in manufacturing. The jury is still out on it, but it’s an enormous challenge. The challenge of jobs and the challenge of industrialization for India is enormous.

If things go according to plan, then you would see incomes rise quite rapidly, as large numbers of Indians are, in fact, moved from those farms to factories. But there is always the possibility that it will not be pulled off, and I think that that’s something that we should be paying more attention to.

Nitin R. Nainani:  Building on this discussion about complexities, I’d like to talk in some detail about some of the other areas of divergence between the US and India, some of which have been quite high profile in the past year or so. Some that come to mind include Ukraine and, broadly speaking, India’s historic relationship with Russia, as well as India’s relations with Iran, and even the question of human rights today in India, particularly where religious minorities are concerned.

It’s apparent that even as bilateral ties have strengthened, some of India’s policies do frustrate the United States. And I’m hoping you can kind of both address those three points in particular but also discuss the implications here. Are mutual concerns about China, for instance, really enough to overcome these differences, or will these continue to be thorns in the side of the relationship?

Sadanand Dhume:  Yeah. So the India-Russia -- I get asked a lot about the India-Russia relationship. And I talked about how it’s an old relationship dating back to the Soviet Union. And the Indian foreign minister, when he’s asked about this, he often points out that if you look at the relations between the big nations of the world, one of the most -- or one of perhaps the only relationship that has remained stable over the last 75 years has probably been the relationship between Moscow and New Delhi.

The relationship between Moscow and Washington has gone through various ups and downs. Same is obviously true for the relationship between the US and China. It’s true of the relationship between India and China and so on.

And so India has had this good relationship with Russia from the start. And a lot of this just goes back to a very realist of the world where the Indians view the Asian landmass as basically being home to three large powers: Russia, China, and India.

India has a border with China, which is, as I said, contested and, in recent years, live. And India sees Russia as a potential friend because it has its own border. And in the Indian view, this is in fact quite similar to what some of the Republican candidates have been saying in the debate.

In the Indian view, they would like to prevent Russia from going deeper and deeper into China’s orbit because if Russia and China are united together, that is really very potentially very dangerous for India, particularly since China has long enjoyed a very close relationship with Pakistan, with which India has a very hostile relationship going back to partition.

So the Indians want to keep Russia on board. The way they try to explain it to the US is that, “Look. Over time, it’s in the US interest also for India -- for Moscow not to have all its eggs in one basket.” I personally am not convinced that this is something that the Indians can actually forestall. I think it seems pretty clear that the Russians and the Chinese are in fact growing closer and closer, and there’s very little that India can do about it. But I’m just explaining to you how they see it.

Now clearly, this has been -- this has caused friction with the US. But equally clearly, the Biden administration has decided to overlook it. India is one of the world’s largest purchasers of Russian oil. And I think the thinking is, again, the question is that, is it better to have India in the tent or outside the tent? And I think people are willing to overlook the economic relationship with Russia because of the shared concerns about China—at least that’s where we are so far.

The other thing that binds India and Russia together is the arms relationship, where India is the top -- India is the world’s largest importer of arms. It kind of fluctuates. Sometimes, it’s India. Sometimes, it’s Saudi Arabia. I believe at the moment, it’s India. And Russia is India’s top supplier of arms.

Now, this means that effectively, because of India’s dependence on Russia for spare parts and so on, that if Putin were to decide to really squeeze India, India’s warfighting capabilities would be very severely hit because of its dependence on spare parts, dependence on the Russians for -- and for some of its more high-tech weapons.

On the other hand, if you take a closer look, you can see that India has been reducing its dependence on Russian arms and diversifying and buying more weapons from the US, from France, and from Israel. For example, almost all of the heavy lift capacity of the Indian Air Force is American. Some of the Indian artillery now is American. But it’s a long -- it’s a slow process.

But if you were to look at those figures, say roughly around 10 years ago, about 70 percent of India’s arms imports would have been from Russia. Now, I’d say it would be less than half, probably closer to 40 percent. But you can look up the exact figures with SIPRI, the Swedish Institute for Peace.

So basically, that’s the nature of the relationship. If I had to sum it up, I’d say that the diplomatic relationship is -- between India and Russia is old, and Indians hold on to that. The military relationship is important but declining. And the economic relationship outside of oil is virtually nonexistent. But because of the sort of effect of sanctions and so on, the Indian oil imports from Russia have assumed significance.

And for the last part, in terms of the Biden administration, like I said, I think they’re willing to overlook India’s relations with Russia as long as India remains on board on things like the Quad, which are more sort of pointed at China.

The human rights issue is something very close to my heart, and I write about it a lot. In a nutshell, what has happened is that I’ll have to step back and give you a very quick, oversimplified sense of what’s happening ideologically in Indian politics.

So in the run up to independence, basically, there were, on the face of it, two important ideological movements. One was the Congress Party, which was led by Gandhi and Nehru, and they preached a nonsectarian nationalism. Their basic idea was that it didn’t matter whether you were Hindu or Muslim or Christian or Sikh or whatever else. Everyone was an Indian, and they were fighting together to end colonial rule and send the British back home. So that was the central premise of the Congress Party.

The rival ideology was the ideology of the Muslim League, led by Jinnah. And the Muslim League argued that, in fact, the Hindus and Muslims of the subcontinent were not the same people. They were a different people. And the Muslims could not trust a Hindu majority to treat them fairly, and therefore, they needed their own country.

Jinnah ended up winning that argument, and the Congress lost. And India was carved up into two countries, and about one-third of the Muslims stayed in India. About one-third ended up in what became Pakistan. Sorry, two-thirds ended up in what became Pakistan, though, again, Pakistan split in 1971. And so, very roughly, you could sort of say that a third ended up in this country cleaved out of Pakistan in ’71 called Bangladesh, a third in India, and a third in Pakistan.

Now, apart from those two ideologies, there was always a third ideology that was not very prominent but that has grown prominent in recent decades—particularly in the past decades—and that is the ideology of Hindu nationalism, which is the ideology of the ruling party in India, the BJP and Modi.

And what the Hindu nationalists always said was, in fact, quite similar to what the Muslim League said. The Hindu nationalists also didn’t believe that India was necessarily a pluralistic country. They believed that it was an ancient Hindu land that had always been a Hindu country, that had spent a lot of time battling invaders from Islamic lands, and that it belonged first and foremost to the Hindus.

That movement, in a nutshell—that’s the Hindu nationalist movement—they have taken power. Obviously, the version I’ve given you is quite oversimplified. There are various grays within this. But I would say that one of the challenges that India faces is that the Hindu nationalists are in some ways much more at odds with what we’d call liberalism than the -- than previous Indian governments.

They struggle much more with the idea of giving Indian religious minorities, but particularly the Muslims, a share of political power, for instance. They’re quite suspicious of Christians, too. Some of the language about it or some of the rhetoric about it is a little bit more tempered.

And this has obviously created friction with the United States because the US would obviously like India to adhere to liberal values, and I mean things like ensuring that everybody is treated equally, everyone gets access to a free trial, that you respect individual rights over group rights, and so on. And this is an ongoing friction point.

However, again, I think that the general view, if you talk to senior officials -- and this is bipartisan, right? It’s not just a Democratic view or Republican view. This is true of the Biden administration. It was also true of the Trump administration -- was that they can see that there are many problems in Indian democracy, but I think they make two points.

One is that even though there are these problems in Indian democracy, it’s still much more democratic than many other countries in the region. So, for example, you have elections. You have transfer of power. The media is not as free as it once was. But you do have -- just because India is so big and there are so many different states, you could have somebody who -- you could have a newspaper, say, in the state of West Bengal, which is totally hostile to Modi, and -- but doesn’t criticize anyone who doesn’t criticize the chief minister of that state.

So in a way, you could argue that the heart of India, the Hindi heartland, which is where most of the people live, has certainly moved in a more illiberal direction. And I’m about to write a piece where I compare what’s happened with India under Modi with what’s happened with Turkey under Erdogan. But one big difference is that because India is so large, it has federalism, which kind of acts as a little bit of a speed breaker.

But in any case, so the two arguments that US officials would give you privately is that while, yes, things have declined in terms of democracy—minority rights and so on—but they’re still probably better than they are in many other countries in the region, and secondly, that because India is useful in other ways, these are things that they prefer to talk about in private rather than in public.

Nitin R. Nainani:  So during the Cold War -- and you talked about this a little bit earlier where US-Indian relations were boxed in in a way by US cooperation with Pakistan, which was referred to at one point as America’s most allied ally in Asia. That isn’t really the case anymore, and I’d appreciate it if you touched on that a little bit.

But I’m curious whether you feel that the US-Indian relationship could be affected by India’s relations with other American allies. And, in this case, I’m particularly referring to Canada as per the recent standoff between the Indian and Canadian governments. Could you give our audience a little bit of background as to what’s going on there as well and how you see that playing out as far as implications for US-Indian relations go?

Sadanand Dhume:  Yeah, so Pakistan first. I mean, what’s happened over the years is that Pakistan has just become dramatically less important for the US, and it’s for a few different reasons. One, of course, one large reason is that the Pakistani economy has done extremely poorly.

There was a time when Pakistan represented some of the richest portions of the undivided Indian subcontinent. Now, per capita income in Pakistan is significantly lower than in Bangladesh. So they’ve made a sort of series of decisions that haven’t really worked out. The army has dominated Pakistani politics almost since its independence. They’ve had a big problem with radical Islam, which does not seem to be going away. Just the other day, there were more than 50 people killed in a suicide bombing outside a mosque in Balochistan.

And I think all of these things together—the rise of religious fundamentalism in Pakistan, the fact that the Pakistan economy has been in crisis mode lurching from one IMF program to the other, the fact that they haven’t been able to grow deep democratic roots because the army keeps interfering—all of this taken together has made Pakistan less and less relevant, particularly after the US withdrawal from Afghanistan.

And so what you find is that the old balancing—or what Indians used to call “hyphenation”—between India and Pakistan really does not exist as a part of US policy anymore. US policy in the subcontinent is very clearly focused on India as the preeminent power, and Pakistan is not much of a deal breaker. Though, on occasion, for example, when the US decides to refurbish or help Pakistan refurbish its F-16s, the Indians get upset, and there’s stories about it in the Indian media and so on.

But it’s no longer what it once was even 10 years ago or 15 years ago. Pakistan has really receded in its importance to US policy in the region, and my suspicion is that it’s going to continue to recede.

On Canada, I think this touches upon -- for those of you who haven’t followed this closely, let me just give you a quick recap. About two weeks ago—in fact, it may have been exactly two weeks ago—Justin Trudeau rose in the parliament of Canada and said that he uses language very carefully.

He said that there were credible allegations of potential links between Indian government agents and the murder of a Canadian citizen, a Sikh Canadian called Hardeep Singh Nijjar, in the suburb of Vancouver in June this year. And this has obviously led to a real downturn, a very dramatic downturn in India-Canada ties. There’s kind of a kind of public cold war between the two.

And it’s put the US in a bit of an awkward position because, on the one hand, Canada is, as you all know, one of America’s closest allies, a very large trading partner, member of the Five Eyes intelligence sharing network, a member of the G7, and NATO, and so on. But on the other hand, the US has been trying to cultivate India for a while now for about two decades.

And so the US so far seems to be walking a tightrope where they have publicly -- people like Jake Sullivan and Anthony Blinken have publicly said that they will stand by Canada, and they’ve urged the Indians to cooperate in an investigation, but they have stopped short of criticizing India.

Now, I think that what happens in terms of impact will depend to a large degree on the quality of evidence that is produced. Right now, many people are -- in India are skeptical, and I share some of the skepticism about exactly what evidence Trudeau has and what exactly his motivations were for making these allegations.

It could prove if he does turn out to have very solid evidence that is put out there, I think it could affect US-India relations on things like intelligence, cooperation, and things like maybe the speed of technology transfer and so on. But I don’t see a fundamental rethink simply because the range of the relationship is so wide and the number of equities that are in play have been built up so dramatically over the last 20 years that I think it would take more than this to derail the relationship, but it would certainly be a setback in certain domains.

Nitin R. Nainani:  So moving forward, how do you see the overlay of interest evolving, and what are some of the constraints? And I’m getting a couple questions in the audience about this. So I was also hoping to hear how the growing Indian diaspora in the United States plays a role in relations moving forward. To what extent, if any, is US policy influenced by the fast growing Indian-American community? What sort of influence do you see them making on the relationship?

Sadanand Dhume:  What was the first part again?

Nitin R. Nainani:  How you see the overlay of interest between the US and India changing moving forward and any constraints on that.

Sadanand Dhume:  Yeah. I think a lot depends now on how much -- how well India does economically compared to China. I think one of the things that doesn’t get noticed, you see India and China mentioned a lot in the same breath. But one of the things that’s happened is that the gap between India and China economically has, in fact, grown quite dramatically.

Let me just give you one statistic. As recently as 1990, per capita income in India and China was roughly the same. Now, per capita income in China is nearly six times larger than India. So the gap, both in terms of income and in terms of technology, has grown quite dramatically.

And from a US-strategic perspective, India is going to be -- remain important because of its heft. But I think there’s a big difference between an India that was, say, one-third the size of China economically or one-fifth the size of China economically, and one that is maybe, say, in the future, one-tenth the size of China economically.

I’m not saying that’s going to happen. China has its own set of economic problems. India could well catch up. But I’m saying that you have to pay attention to India’s economy because India’s strategic importance is going to really depend on the degree to which it can, if not close that gap, at least ensure that that gap doesn’t grow too wide.

The second thing to keep an eye on is the values piece because even though in India, when you talk to Indian analysts and you read the Indian media, they seem to have a very real-politic driven view of this where everything is about balance of power and values don’t matter. And anyone who mentions values is a hypocrite and so on.

But I think values do matter, and values always have mattered to the United States, have been central to the US self-conception, and they’ve been central to US foreign policy. My colleague, Kori Schake, had a great piece in a publication called Engelsberg Ideas, where she talked recently about the importance of democracy to the US foreign policy and how the US has always felt that it’s going to be safer in a world which is filled with other polities and other peoples who share our basic ideas.

And so the drift of India towards illiberalism, the worry there is that as India -- if Hindu nationalism can find a way to become compatible with small l liberalism, classical liberalism—I’m not talking about the progressive left. I’m talking about basic ideas, like individual rights, due process, freedom of speech, the scientific method—if India -- if the Hindu nationalists can find a way to make their ideology compatible with liberal democracy, I think the relationship would be much stronger.

But you can also imagine a situation where things go dramatically in the other direction and the values piece gets further corroded. It’s already been corroded, in my view, over the past 10 years. And what you’re going to begin to see, which you’ve already begun to see if you look at the pupils, for example, is public support in the US for an India fall. And once public support falls, it’s not as though foreign policy decisions are made by the man on the street, but it does really matter to the consensus.

And so far, over the last 20 years, we’ve seen a very strong consensus in both parties and on the Hill that a strong India is in the US interest. My sense is that some of that may begin to erode if the values piece becomes too -- gets too out of whack, and which is why which also is in many ways the most significant aspect of the question before this about the assassination of Hardeep Singh Nijjar in Vancouver because, in many ways, it illustrates for some people the values gap.

And if the evidence turns out to be clinching, I think it would certainly strengthen the argument in Washington and in other Western capitals that what is going on in India requires a second look and that the values gap may become so large that people start beginning to have a different kind of conversation about the strategic coherence of the relationship.

Nitin R. Nainani:  What role will multinational groups, such as the Quad or even I2U2, play in relations in the USA?

Sadanand Dhume:  Yeah. So the Quad, I think, is the single most interesting and important of the lot because it really -- its focus is on Asia. It includes two traditional long standing US allies, Japan and Australia. And India, which in many ways is the odd duck in the quad because it’s not a treaty ally—not only of the United States. It’s not a treaty ally—the other two countries are well established, very high income market economies.

India is still in the process of becoming a market economy, and it still has a very low per capita income. And I think the US hope is that—and it’s been a fairly successful strategy so far—is that by embedding India in closer and closer relationships, not just directly with the US but with the most important US allies in the region, countries like Australia and countries like Japan, it kind of would pull India more towards the liberal democratic west in terms of its politics.

Even though people realize that India is unlikely because of its tradition of independence and because of its sheer size, it’s unlikely that India would ever be the equivalent of, say, a country like Japan. But if it can be tilted more in that direction, that’s the goal, and the Quad becomes important there.

On the Middle Eastern side, I think a lot of -- one of the most interesting elements is that India has developed an extremely close relationship with Israel. On Modi’s watch, he became the first Indian Prime minister to visit Israel. But even before Modi came to power, the relations between the two countries in terms of their defense and intelligence cooperation has deepened dramatically.

And what you’re seeing now is India -- I2U2 is very interesting because you have India developing a very close relationship with two traditional allies, two of the traditional -- the monarchies: Saudi Arabia and the UAE. The UAE has already normalized ties with Israel. The Saudis may soon follow.

And so the general idea is that these countries have -- they see huge economic potential in India, and India wants to play a larger role in the Middle East. And this is something that the US is facilitating because it is in the US interest again to minimize the tilt of these countries towards China.

Nitin R. Nainani:  In recent months, there’s been a fair amount of discussion and scholarship aiming to put a label on the US-India relationship—many of whom have expressly stated that this is not an alliance. Even last week, I think, the external affairs ministers said that US and India relations were at a high end. He made reference to the song. He said, “You ain’t seen nothing yet.”

To conclude our structured conversation, given many of the points we touched on today, what label or framework would you use to characterize the relationship now and moving forward?

Sadanand Dhume:  I’d say that India and the US are increasingly close partners in a partnership driven by strategic interests but that the divergence in values potentially makes this partnership vulnerable.

Nitin R. Nainani:  Great. With that, I’ll turn to some of the questions that we’ve gotten from the audience. So the first question that I see is, “Medical tourism is a special attraction in India to people from the US, especially due to the lesser expensive surgeries. Is healthcare viewed positively in India, or is it considered as underserving of the locals and just serving the upper-economic tiers?”

Sadanand Dhume:  In India, the short answer to that is that healthcare is, of course, viewed positively. There’s a huge gulf between these private hospitals that are well staffed and have very talented people and are, in many -- in some cases, world class. And the average health care available to the average person on the street, there’s a huge, huge gulf between those two. Medical tourism is really driven by the cost advantage that many of these Indian hospitals are able to provide.

Nitin R. Nainani:  The next question I have is, “If the US becomes more hostile towards India, what alternatives do you see for the US, if any, in Asia?

Sadanand Dhume:  Well, I think the alternatives there are -- the US remains the dominant power, and I think that India is definitely an important country, but it’s not as though the US doesn’t have any other important allies and partners.

I mean, Japan is arguably extremely important, and it’s going to remain extremely important—maybe become more important. It has a very large economy. It has a cutting edge technology sector. It is putting more money into its defenses. It’s a treaty ally. It is very concerned about what’s happening with China. Japan is there.

Australia has really stepped up in many ways, not just in the Quad, but also if you look at AUKUS, you have the Philippines, which is, again, interesting—an old traditional US ally. The Indonesians are a little bit on the fence, but they’re also in play. So it’s not like the US doesn’t have options. There are options. I think India is going to remain one of the options and one of the important options. But it’s not as though in a world without India, the US would be on its own in Asia or anything like that.

Nitin R. Nainani:  The next question I have is, “What bilateral initiatives would do most to improve US-India relations?” The questioner specifies that India has been keen on a social security totalization agreement with the US for some time. And do you think that that would be a useful initiative for the US to act upon?

Sadanand Dhume:  Yeah. I mean, they’re always -- if you look at the relationship at the bureaucratic level, there are always these kind of things that have been kicking around for a long time. And this social security agreement is one that the Indians -- it’s a long beef that the Indians have had.

Their basic argument is that Indians come to the US, and they work. So, for example, in the software sector, some of them work for a few years. They have to pay into social security. Then they go back to India, and that money doesn’t -- they don’t get that money because they never end up claiming social security. And I can see the Indians want that.

It’s a very complex issue, which has to do with how the laws and Congress -- and I frankly don’t see that getting resolved, particularly in the current climate, because I think the US argument would be that nobody’s really doing the US a favor by coming and working over here. And if they don’t get their social security for the few years that they worked over here, that’s okay.

So this is a long-standing issue. If it was resolved, I’m sure the Indians would be happy. I don’t see this as something that is really rising to the top in their bilateral relationship by any means.

Nitin R. Nainani:  I think we have time for one final question. Much of India’s increasing friendship with Israel was due to their volume of Soviet and Russian weaponry, which the Israelis are uniquely able to maintain due to the fusionic migration in the 1990s. As India pivots towards other arms providers, such as the recent deal with France, will that lead India to taking Western positions overall more into account in the future?

Sadanand Dhume:  I’m not sure I agree with that because I don’t think that -- the Indians did not -- the Indians have maintained a close relationship with the Russians of their own. So it’s not as though the Indians had it with the Egyptians, where there’s some kind of rupture with the Russians as the Egyptians turn towards the West.

The Indians maintained a close relationship with Russia. What was really driving the India-Israel relationship was weapons cooperation, where the Israelis themselves are able to provide Indians with advanced weaponry: things like drones, things like radar, things like ammunition for Indian planes, and very deep intel cooperation because both countries perceived themselves rightly as facing a threat from Islamist terrorist groups.

It’s not a coincidence that during the Mumbai attacks, the terrorists who came over from Pakistan attacked a Jewish center, also the Chabad house in Mumbai. So a lot of it was in that security and defense realm just coming from the fact that Indians have a high level of trust with the Israelis. And the Israelis, of course, saw a large market there.

What’s happening more broadly in terms of Indian defense procurement is that over time, the Indians are making themselves less dependent on the Russians, but they’re never going to fully put all their eggs in the Western basket. I think, from an Indian perspective, what they’re going to try to do is reduce their dependence on the Russians, particularly as the Russians get closer and closer to China.

But at the same time, within the West, they’re going to look towards France to a large extent. They’re going to look to the US for some things, and they’re going to look to Israel for something. So they’re going to continue this diversification strategy, which is what they’ve followed for a while.

Nitin R. Nainani:  So I see that we’re short on time. I just want to wrap things up by really giving a sincere thank you to Sadanand for sharing your time with us. We’re grateful for your insights and perspectives.

Sadanand Dhume:  Let me quickly take that last one for 30 seconds before I go. Does India want to be the China counterweight for the USA? Short answer is no. India wants to be a power in its own right in the multipolar world, so that’s what they’re aiming for. But if they end up being a counterweight, which is how the US sees it, that’s beneficial to the US.

Nitin R. Nainani:  Great. I’ll now turn things back over to Jack.

Jack Capizzi:  Thanks, Nitin. Well, surely, I want to appreciate Sadanand for taking his time to share his expertise with us today. And thank you, Nitin, to you as well, for moderating the discussion and organizing this program.

 

As always, we welcome listener feedback by email at info at fed-soc.org. We encourage you to keep an eye on our website and your emails for announcements about upcoming webinars. And as a reminder, this program will be available on our podcast feed and YouTube channel shortly. So, with that, thank you all very much for being with us. We are adjourned.

 

 

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