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Email this citationCIAO DATE: 02/01
Yankee Go Home But Take Me With You
Jairam Ramesh
Secretary, Economic Affairs Department
All–India Congress Committee
Asian Update Series
November 1999
Asia Society
I am grateful to my good friends Frank Wisner and Marshall Bouton for inviting me to address such a distinguished audience. Sherpas normally write speeches for summiteers. And so it has been with me for the past few years. Now to actually sit down and actually compose one for oneself is an altogether different experience. I hasten to add that whatever I say this evening is purely in my personal capacity as someone deeply interested in bringing our two countries closer together.
India may not be terribly important to the United States, as a recent survey of the Chicago Council of Foreign Relations revealed–only 36 percent of those surveyed in 1998 said that the United States has a vital interest in India, (although this proportion was up from 31 percent in 1994) and India’s "thermometer" rating was 46 degrees C in 1998, with anything more than 50 degrees being defined as a country towards whom "warm" feelings were expressed. But the United States is tremendously important for us. Porfirio Diaz bemoaned that Mexico’s tragedy was that it was so far away from God and so close to the United States. Well, India’s tragedy has been that it has been too close to God and far away from the United States!
I got to know Frank Wisner when he was Ambassador in New Delhi and was very often at the receiving end of his aggressive salesmanship. He was tough but transparent. He was unyielding but sensitive. He was fearless but friendly. He was certainly the right man at the right time to bring the two estranged democracies together.
Marshall is virtually half–Indian and has indefatigably worked to include India as part of Asia in the American consciousness, something that we take for granted in my country but that is not always apparent to Americans. It also turns out that he had known my father–in–law thirty years ago when he was doing his doctoral work in Tamil Nadu.
Frank wrote to me saying that he could think of no one better to articulate what India seeks in its relationship with the United States. What we desire is very simple and is captured in the title of this paper–Yankee Go Home But Take Me with You! This is more than a mere one–liner that sherpas are prone to, but captures the ambivalence of our attitudes. We want you to be out but we want to be in with you. We do not want to be a Tony Blair, who we see as your poodle, but we do want to have a special relationship with you, on our terms.
We find the Americans over–bearing, preachy and sanctimonious–something, I would have thought, India had a global patent on, ever since the days of Krishna Menon! We find the Americans meddlesome and partisan. We find the Americans having no time for history. We find the Americans insensitive to our needs, aspirations, challenges and threats. We find the Americans impatient and not willing to give a land of the most multitudinous diversity elbow room for crafting a durable consensus before taking far–reaching decisions. We find the American policy towards India a consequence to or an offshoot of American policy to "something else" and not a policy that is based on an autonomous recognition of India’s own role. We think that America is far too enamored of Pakistan and willing to give it a long rope. We find the Americans fiercely evangelical on commercial and economic issues. Bad enough we have to combat Islamic and Hindu fundamentalism; now we have the added burden of trying to push back market fundamentalism being propagated by the ayatollahs of Wall Street, the mullahs of the Treasury and the imams of the IMF. We think that the British somehow knew how to manage their global role in a very sophisticated fashion, but the Americans are seen to be crude, brattish, insular, isolationist, and totally caught up with themselves and their way of life, which is wreaking havoc on the planet.
But, at the same time, we crave your interest, attention, and affection. We think we have a far greater justification to be at the head table than at least seven of the G–8 countries. We want to be taken seriously, not just as an emerging market but as a country that has something unique to contribute to world affairs. We want America’s support for fulfilling our destiny on the world stage as reflected in a permanent seat in the UN Security Council. We cannot understand why America gives us no brownie points for our exuberant, boisterous but representative democracy and for our plurality, no credit for our tough anti–narcotics record. We find America bending over backwards to accommodate China but ever ready to move forward to take issue with India on the slightest pretext. We find it irritating that in a WTO–world, America clings to bilateral punitive instruments and treats the WTO with disdain and indifference. And most of all, we certainly deplore American attempts at imposing restrictions on the movement of Indian skilled personnel to the United States.
Indeed, I have often thought of what might happen if Americans did impose, even temporarily, that ultimate weapon of sanctions on the Indian establishment, especially its progeny–namely visas.
For the past decade and more, I have battled both in and out of government for a more pragmatic approach to the United States, very often inviting the charge that I take orders from Langley. I have trouble convincing my Indian critics that Langley’s record in cultivating and backing the right people in developing countries is atrocious.
Many scholars have analyzed the ups and downs, mostly downs, of India–U.S. relations. But I think it was the redoubtable former Indian Foreign Secretary Mani Dixit who captured the essence of our relationship, at least from the Indian side with a delightful Hindi word, that pithily captures our mindset to the United States–panga. It is difficult to translate it exactly into English but roughly speaking, panga means prickly, instinctive, petulant confrontation; confrontation for the sake of confrontation; confrontation that reflects a desire on the part of the weaker side to score a few "points" over the stronger protagonist and put that protagonist in its place. When you are, in effect, a junior partner and have great pretensions, then you look for opportunities to flex your muscle so that you do not get taken for granted. That, in essence, has been our approach; an approach that has not been grasped in its psychological complexities by relatively simple–minded and bottom–line oriented Americans.
Things have dramatically changed in India–U.S. relations, as I will presently argue. But panga remains. I have been trying to confront this and impress on my colleagues and friends in India five points as part of this changed panga–to–pragmatism approach, an approach in which India becomes more proactive rather than being merely reactive.
First, no country has become an economic powerhouse in the post–WWII era without close economic cooperation with the United States. Even China runs an annual trade surplus of close to $50 billion with the United States, which is more than five times the volume of India–U.S. trade. U.S. direct investment in China is probably around five times that in India but if portfolio investment is also included, then it is probably two to three times as much. India must engage the United States more intimately and heavily in trade, investment, and commerce. To do so, it must bring about changes in its own economic policies. The single, most important reason why India has been unable to emerge as an international supplier in fast–growing consumer industries is because of our policies on small–scale reservation. When I was in the United States some years ago, I saw stickers on cars proclaiming–Be American, Buy American–but behind the stickers was printed in small font–"Made in China." That illustrates the bus that India has missed.
Second, investment is important but what gives leverage in the United States is trade. Of course, trade and investment are closely interlinked. Over one–third of international trade now is now intracompany sales. If more American companies come to India, imports and exports will get a fillip. But this is in the medium to long–term. In the short–term, what sells in the United States is how much you buy from the United States. Almost one quarter of a million jobs in the United States are dependent on exports to China. One–sixth of Boeing’s sales are to China. That is a powerful argument that is used by the friends of China. India needs to build up such a distinctive profile and position as well where sales to it are crucial for the continued prosperity of American companies.
Third, America respects economic strength and open markets. Economic strength and open markets are in India’s own interests and we must liberalize on that score alone. The added benefit would be that we sustain American interest as a consequence. I had described it some years ago as the "Use Rebecca Mark to neutralize Robin Raphel approach." I hope you will not think I suffer from gender prejudices!
Fourth, American policies are very often shaped and influenced by diasporas. India has a great advantage in that its diaspora, though comparatively recent, is extraordinarily resourceful, well–heeled, and well–placed. If we could somehow leverage these networks, we could surely build bridges with the United States.
Fifth, far too long we have allowed our bilateral relationship to be a government–to–government one and whatever other dimensions we have tried to have have often fallen prey to the vicissitudes of our political ties. America and India must have a multifaceted relationship that is durable enough to withstand political differences–examples of France and Israel come to mind.
I must admit that these points are slowly sinking into our consciousness. Americans may feel frustrated at the pace of change but it cannot be denied that our relationship is now on a much firmer and sounder footing than it was in the 1970s and 1980s. Part of the problem is that America very often expects too much from its newfound friends and when things do not quite happen according to its wishes and plans, it gets disenchanted. There was a time when Indonesia could do no wrong in American eyes–now it can do nothing right. American policy is handicapped by such pendulum swings.
Some years back, Ambassador Shankar Bajpai drew my attention to a delightful insight from de Tocqueville–who else?–who wrote "a democracy can only with great difficulty regulate the details of an important undertaking, persevere in a fixed design, and work out its execution in spite of serious obstacles. It cannot combine its measures with secrecy or await their consequences with patience. There is a propensity for democracies to obey impulse rather than prudence, and to abandon a mature design for the gratification of a momentary passion."
This is a point I will come back to later when I discuss how both countries must be less demanding of and more patient with each other as a key to sustaining their relationship.
1991 was a definite turning point and it would not be an exaggeration to say that the corporate sectors of the two countries have discovered each other and are pretty much on autopilot. There have been controversies. But for every Enron there is a GE. For every McDermott there is a Microsoft. Trade barriers have come crashing down in India at an unprecedented rate, something that is not always recognized in Washington.
This has not only helped us, which is why we embarked on trade liberalization in the first place but it has also opened a new dimension in our ties. There was a time when the job of the American Ambassador in Delhi was almost exclusively devoted to lobbying for lower tariffs on almonds from California. Not any longer. India has taken momentous decisions to phase out quantitative restrictions on imports by 2003 and also to change her intellectual property protection laws by 2005 at the outside. Sure, it has required American and WTO pressure to do what was in our own interest to have done some years ago, but the fact that we have done it in face of considerable political flak has not earned enough plaudits in the United States.
The crucial point of economic reforms is that no government after Mr. Rao left in May 1996, and there have been four governments, has reversed the pace and direction of reforms. In fact, I have argued that reforms after 1996 have been deepened and expanded very significantly. Liberalization of the economy has also received great impetus from the regionalization of the polity that has taken place in India in the past decade.
The most far–reaching economic reforms are now being taken by state governments belonging to different political persuasions–like, for example, in the power industry. It was the chief minister of West Bengal who spearheaded a historic water–sharing agreement with Bangladesh. Part of the frustration of outside observers is that there is no unicentric India anymore. We are evolving into a polycentric political system and this, far from being a recipe for Balkanization of India, is actually strengthening Indian society in ways that are still evolving.
1998 was a second watershed. Indian elites and intellectuals have always believed that America will take India seriously only if it has military might and if it is a nuclear power. I have been arguing that this is a profoundly mistaken perception.
But may I be honest enough to admit that the way India has suddenly become a flavor in think–tanks and on the seminar circuit does confirm the impression that the Americans will take you more seriously if you have nuisance value. Would no less a personality than Strobe Talbott have engaged our Foreign Minister in eight excruciating rounds of talks spread over twelve months if we had not gone nuclear overtly?
When Indians read about how Russia is a Bangladesh with nuclear arsenal, they are justified to think that they will get a place on the head table only if they have displayed nuclear pyrotechnics. I talked earlier of how I use the example of China to convince my Indian friends that it is economic might that counts in world. But please pause for a moment and reflect on the fact that America’s exports to China are probably just around 2.4 percent of its total exports, about the same level as exports to Australia or Belgium, as Gerald Segal reminded us in a recent issue of Newsweek. An Indian looking at this statistic would be perfectly justified to think that China is taken seriously, predominantly because it is a nuclear and missile power.
The third watershed was May–July 1999 when America took an uncharacteristically balanced approach on the Kargil episode. Most Indians were pleasantly surprised that the United States had shed its traditional even–handedness and had actually tilted in favor of India. There may well have been fears stoked about third–party intervention. But the dominant mood in India was one of exultation that, finally, America had come to our support. It wiped out memories created by our lack of understanding of how the correspondence section in the White House routinely deals with letters received by the President and by the hectoring that we think we are being subjected to by Josef Korbel’s daughter and her acolytes in Foggybottom.
Well, so much by way of background, history, and generalities. Where do we go from here? Let me take each of the major issues on our mutual radar screens one by one and discuss them in some detail. I plead guilty to not bringing some "over–arching" vision, no grand theme, no great macro–perspective. I find America looks at India largely through the prism of bombs and missiles. India looks at America largely through the prism of investment and visas. What has been missing is an "integrated" perspective at a nuts–and–bolts level.
Many of my Indian and American friends have suggested that we must keep the nuclear issue aside and make progress on other areas. I disagree. Progress on non–nuclear issues need not be held hostage to progress on nuclear issues but the nuclear dimension in our relationship must be discussed openly and frankly. To an extent, this is happening but, as I bemoaned a little while earlier, did it require Pokharan–II for America to wake up? It would also help if America would acknowledge, in the face of incontrovertible evidence that is now available, that it was actually Pakistan that went nuclear first and without Chinese support and American acquiescence this would not have happened. We could do without hypocrisy on both sides in the nuclear dialogue.
A country whose prime minister first made a suggestion for a Comprehensive Test Ban Treaty (CTBT)–type treaty way back in 1954 and a country that cosponsored the CTBT resolution with the United States in the UN in 1993 can hardly turn its back on the CTBT. On the other hand, for the Americans to pursue what the Washington–based Institute for Energy and Environmental Research calls some form of "stockpile stewardship" program to ensure maintenance of its own nuclear arsenal and to pursue the path of thermonuclear explosions is both hypocritical and, in the latter case, in violation of Article 1 of the CTBT.Our concern is simply that whatever is applicable to America is automatically applicable to our nuclear–neighbor China. I recall reading an article by George Bunn and Roland Timarbaev, the men behind the Non–proliferation Treaty (NPT), that the United States has not fulfilled its obligations under the NPT.
America also does not recognize fully the tension that has always existed between the competing schools of idealism and realpolitik in Indian security policy. After all, please do not forget that just 36 years ago, in 1963, India refused a suggestion from the United States that it produce a nuclear bomb to counter the anticipated nuclear weaponization of China. Also please do not forget that in 1967, India approached the United States to inquire whether it would provide security guarantees to India against a nuclear threat from China. The response was negative, leading to the ascendancy of the realpolitik school.
Let me hasten to add that amnesia is not just an American trait. We too have been guilty of this at crucial junctures. No single event has done more to vitiate Indo–American relations than the dispatch of USS Enterprise to the Bay of Bengal in 1971. Indians got terribly worked up, conveniently forgetting that the very same aircraft carrier had visited the Bay of Bengal nine years earlier at the time of the Sino–Indian conflict.
There are no disagreements between India and the United States on the need for India to institute and legislate strict export controls on nuclear and missile technology. In fact, our record on this is impeccable in spite of billion–dollar blandishments from Libya and Iraq. Again, we are not given brownie points for this self–imposed ban. I believe that we should legislate such controls at the earliest, although I am aware that there is a school of thought in India that wants to link this to some "concession" from America on sanctions and on the transfer of technology.
There are no major disagreements on chemical and biological weapons and India is already a signatory to global conventions. There are no fundamental differences over the Fissile Material Cutoff Treaty (FMCT) as well. India has repeatedly stated that it is prepared to negotiate the FMCT in the Committee on Disarmament. The CTBT, therefore, is the crux. We are watching the debate on the CTBT in the United States, China, and Russia with great interest. My own sense is that by the time the CTBT is ratified by the U.S. Senate we would also have made up our minds, although I find it hard to imagine India acceding to the CTBT if China has not actually ratified.
India has already announced a moratorium on nuclear tests. All political parties have supported this position. This is a de facto commitment to the CTBT. Formally, our position is that we will sign the CTBT but as part of a process that includes major reduction, if not total elimination, of nuclear weapons by the P5 countries. And do not forget that one of the P5 shares a 2000–km disputed border with us and, in spite of border agreements signed and confidence–building measures taken in 1993 and 1996, that P5 nation evokes not–so–nice memories in India.
Ideally, India should sign the CTBT since the security arguments for not doing so have disappeared following the May 1998 tests. I am aware that some scientists, both Indian and American, feel that both the quantity and quality of the tests conducted in May 1998 were insufficient to establish a credible nuclear deterrent, specially vis–à–vis China. But I will go by the categorical assurances given by India’s defense and nuclear science establishment that the tests were, in fact, sufficient.
But until such a time India actually signs the CTBT, a suggestion made by the Washington–based Economic Strategy Institute in 1998 is worth considering–that the Indian Parliament make a declaration citing the key provisions of the Treaty and explicitly pledging that India will comply with these provisions in the form of an undertaking to the United Nations. The Institute links this to a "nuclear bargain," which would involve the transfer of American nuclear power technology subject to international safeguards.
I find this a pragmatic recommendation. Although on nuclear power, I just want to mention that our program has traditionally been based on heavy–water moderated reactors, which means that the Canadians will have to be an integral part of such a deal. Our nuclear power program must continue to be based on heavy water since our ultimate objective is to utilize our vast reserves of thorium. But light–water reactors have a "gap filling role." Nuclear power accounts for just 3 percent of electricity supply in India, and if we are to reach a contribution of at least 10 percent by 2015 then 500 MW light–water reactors become important, especially since India has mastered only the 235 MW heavy–water reactor design.
American laws have prevented the sale of nuclear reactors to India, which is buying them from Russia instead, not a very happy prospect given the Chernobyl saga. Indians are unable to understand how America can contemplate selling reactors to China, which is in clear violation of all Missile Technology Control Regime (MTCR) stipulations regarding sale of missile technology to third countries. India puts this down to the usual "double standards" adopted by America.
The CTBT debate in India suffers from a major misconception on the part of its opponents that signature automatically means ratification. Actually, there are three steps–signature, ratification, and deposit of the instruments of the ratification. Now, in the Indian system Parliament does not ratify an international treaty like the U.S. Senate. It is the executive’s privilege and prerogative. This is what has led to the confusion: the same authority signs and ratifies.
This has led many commentators to argue that signature means automatic ratification. This is simply not true. India signed the Chemical Weapons Convention (CWC) in 1993. The same Cabinet that decided to sign the CWC in 1993 then decided to ratify it in 1995. Another government’s Cabinet then decided to deposit the instruments of ratification in 1996.
This three–phased approach is what is needed for the CTBT as well. We can sign on immediately, link our ratification with ratification by the United States and China and the withdrawal of some of the curbs on our research and scientific institutions, and further link our deposit of the instruments of ratification with progress on a global accord on a time–bound elimination of nuclear weapons. It is my belief that, privately, all political parties have come around to the inevitability of India signing the CTBT and that they are now looking for a honorable way of resiling from the belligerent–not now, never–posture that India adopted two, three years back in Geneva.
In recent weeks, the publication of the nuclear doctrine document prepared by the entirely nonofficial National Security Advisory Board has generated a lot of adverse comment from the Americans. It has, incidentally, received flak within India as well. It is extremely unfortunate that the Americans have seen in the document a distinct thrust towards building a deterrent against the United States itself. This is simply stupid, and I would argue that it is vital for India to correct this impression.
A charitable explanation for India developing Indian Confidence Building Measures (ICBMs) given recently to me by one of India’s most knowledgeable experts on nuclear economics and defense strategy, Brigadier (retired) Vijai Nair, is that since Indian SSBNs (nuclear–fuelled ballistic missile submarine) will be restrained from deploying in the Pacific Ocean, the Submarine Launched Ballistic Missiles (SLBM) capability on board these platforms operating off the Indian Ocean must be of Intercontinental Ballistic Missile class. Even so, I would personally push for a categorical statement by India that it does not seek to develop missile capability in excess of 4,500–5,000 km range. This could form part of a mutual no–first–use pact between the United States and India.
I entirely agree with Michael Krepon’s memorable comment that except for a pledge to no–first–use and a commitment to a "minimum credible deterrent," the document may well have been written in the Pentagon. That India’s deterrent is purely and unequivocally for a defensive, retaliatory capability has to be made clearer and hammered home again and again. But I hope friends and well–wishers like Mr. Krepon will agree that if a minimum deterrent is to be credible, it has to pass the test of survivability, which, in turn, necessarily entails a sea–based deterrent. There is, I am afraid, no escape from the Triad concept. I am sure that the draft doctrine document will be subject to greater scrutiny in Parliament and by the new government itself. There are definitely Cold War touches in the document and it would be suicidal for India to go through what the Americans subjected themselves to for well over three and a half decades. That the Soviet Union was destroyed by its counter–actions should not be lost on India.
The expectation of many Indian security experts is that India can withstand the economic costs of nuclearization and it is Pakistan that will be destroyed when it mounts a Soviet–type reaction. This is wrong. To wish for Pakistan’s destruction itself is against India’s interests. But to argue that India can take more than a billion dollars of additional expenditure per year for the next ten years for its nuclear deterrent is being blind to India’s socioeconomic realities. Actually, even this additional amount will be straining our resources to the hilt, but my feeling is that we could scrape through, but only just. This would call for a steep cut in the subsidy bill that consumes 14–15 percent of GDP, a massive program of privatization and a drastic reduction in the size of government.
The nuclear and missile issues are closely interlinked. There is a firm belief in India that the United States is doing its best to ensure that India does not emerge as a missile power. The Americans have been pressuring India to go slow on its missile program without appreciating fully the reasons why India built up its missile capability. We have on our borders an ICBM–power that does not subscribe to the MTCR. These violations of the MTCR have been overlooked by the Americans even as they are telling the Indians to abandon their own program. We see double standards in this approach.
I myself, seventeen years ago in a series of articles in the Times of India, had advocated India’s missile program but purely for building and demonstrating scientific and technological capability. I was then twenty–eight years old, fresh from the United States and concerned with the policies, programs, and projects to build India’s technological muscle in high–tech enclaves, which would then spin–off into civilian industry as well.
Earlier I had collaborated with an Argentinian nuclear technologist, Jorge Sabato, in a paper published in 1979 in the Bulletin of Atomic Scientists, to provide a similar rationale for nuclear programs in countries like India and Argentina. These arguments are no longer in vogue, but it is important for my American friends to recall them when they pass judgment on missile and nuclear programs in India.
The military dimension hardly entered my head when I wrote these articles, which were spurred by a great deal of pride in the successful SLV–3 launch in the early 1980s and in the way charismatic figures like Dr. Abdul Kalam were building indigenous scientific and technological expertise in the face of heavy odds. I had actually all but forgotten about these articles till my attention was drawn to them in a recent monograph produced at the Stimson Center by W.P.S. Sidhu, which is a most lucidly detailed discussion of India’s missile development program.
By the mid–1980s, however, other considerations began to predominate and thetechnology factor was gradually overtaken by military and strategic factors as themain rationale for our missile program. Now, missiles in South Asia are a faitaccompli. The question is what directions India’s strategic missile program willtake. America would certainly like us to cap, roll–back, and eliminate missiles. This, Sidhu argues in his monograph, would constitute the South Asian version of the Intermediate Nuclear Force Treaty (INF) but which he rightly rejects as being impractical and unviable for India and Pakistan. The INF’s aim was to eliminate an existing weapon system rather than to prevent the emergence of one, which is the situation in our region. And an India–Pakistan INF arrangement would be incomplete without China and North Korea.
The second option would be induction without actual deployment. This is the situation prevailing today. It is a state of virtual de–alert. This could be institutionalized through a bilateral dialogue between India and Pakistan and between India and China as well.
The third option would be overt deployment and this is certainly what some hawks both in the Indian intellectual and security establishment would want. It has been argued that overt deployment has its uses and would actually lead to a mutually assured deterrence status. It has also been argued that it would spur negotiations as well. I personally am not entirely persuaded by these arguments, which really is a play–back from the Cold War era. I believe that overt deployment could, in the South Asian context, heighten tensions and instability.
Sidhu argues that India could well manage "using" missiles–that is, flight testing, moving, inducting, and deploying–and prevent miscalculation by providing its neighbors reliable and timely monitoring and assessment of missile–related moves.I am not too sure. On paper, this argument is attractive but in the hard–boiled world of day–to–day politics, and given the state of play of Indo–Pak relations right now, Sidhu’s hopes are misplaced. I think we need to continue to maintain a fine distinction between "induction" and "deployment" with the focus being on induction. An eminent Indian physicist, R. Rajaraman, has written that what India needs is a "Paused Deployment Posture," by which he means a deliberate, mutually verifiable built–in delay of about a day in the arming of delivery vehicles with nuclear weapons, agreed upon by India and Pakistan. I entirely agree that we should offer such a posture, which will reinforce the no–first–use declaration
The United States’ military cooperation with Pakistan has always cast a long shadow on India–U.S. relations. In fact, it might well be the case that Kashmir would have been settled in the early fifties had not SEATO and CENTO intervened. But, let us not become prisoners of history.
What bothers me, however, is that the same attitudes prevail. I was most distressed to read the report of the Independent Task Force of the Council on Foreign Relations entitled "A New U.S. Policy Toward India and Pakistan" that was released in January this year. I am glad that Francine Frankel, Sumit Ganguly, Selig Harrison, Stephen Solarz, and Raju Thomas gave a strong dissent note on the recommendation of the task force to resume military transfers to Pakistan.
Now these five may be a case of "round up the usual suspects," but I could not have bettered what they have said. They speak for India when they call into question the very premise that U.S.–Pakistan relations cannot be complete without resuming limited conventional military sales. Any waiver of the Brown Amendment to permit sales of military equipment to Pakistan would, in my view, seriously damage India–U.S. relations. I doubt very much if America would actually increase its leverage in this fashion. What these arms will do is increase tensions in the region and harden Indian attitudes across a whole range of issues on which we have been able to make some progress.
An economically strong, socially stable, and politically democratic Pakistan is very much in India’s interests. India must work towards this objective. India must also encourage and support the United States in this task. Indeed, I would argue that the main objective of American policy in South Asia should be to prevent the collapse of Pakistan and to make it a responsible regional player. But the question is whether the transfer of advanced weaponry would help in resolving Pakistan’s basic problems and advance American interests in the region.
I need hardly recall to this audience George Santayana’s oft–repeated maxim–those who forget the lessons of history are condemned to repeat it. I would also agree with Leonard Spector in his dissent note to the same Task Force report, when he says that to the extent that the United States is looking for leverage and incentives for "good behavior" on the part of both the Indians and Pakistanis, economic, commercial, investment, and trade incentives should take precedence over military carrots.
On January 12, 1995, an Agreed Minute on Defence Relations between India and the United States was released in New Delhi, signed by Secretary Perry and Minister Mallikarjun. This minute talked about civilian–to–civilian cooperation, service–to–service cooperation, and defense research and production cooperation. It also sketched out an organization structure to implement the provisions of the minute and promised to arrive at a bilateral agreement on mutual protection of classified information. Four and a half years have passed, but the minute remains virtually where it was. India’s location astride the strategic sea lanes of the Indian Ocean and flanking the Asia–Pacific Rim and the Persian Gulf, both of which are of critical importance to the United States, would be a powerful argument dictating greater defense cooperation, both in terms of software and hardware.
One point on India’s defense budget must be made here. Right through the 1980s, India’s defense spending averaged 3.2 percent of GDP and in the 1990s it has averaged 2.6 percent of GDP. Pakistan’s defense expenditure is now around 5 percent of GDP and China’s is also around 4.7 to 5 percent of GDP. India’s moderate level of defense spending has not earned it "respect" and "support" in Washington. Now, following Kargil there is a growing clamor in India for hiking defense budgets. There is undoubtedly a modernization backlog. Add to that the annual cost of a credible minimum deterrent, which I have estimated at roughly about $1 billion a year for the next ten years.
The point I wish to make is this. For a variety of reasons–competing pulls on public expenditures, a genuine desire to cap the growth of defense spending, which ballooned in the late 1980s and contributed to our Balance of Payment crisis of 1990–91, and because of the very nature of our defense procurement system–modernization of India’s armed forces did take a back seat in the 1990s.
It is now almost inevitable that India’s defense budget in the first decade of the next century will average 3.2 to 3.4 percent of GDP. This should not set the alarm bells ringing but must be seen as the very minimum that will be needed to keep India’s armed forces in a state of preparedness, even after allowing for more active and purposeful diplomacy and dialogue. Incidentally, increased defense spending by India presents new business opportunities for India.
In this connection, it appears that because of its own curbs America stands to lose at least $8 to $10 billion dollars of business. India has turned to other countries like Israel, Russia, and France. The prime example of how India–U.S. defense cooperation has been hurt following sanctions is the Light Combat Aircraft (LCA) where India and the United States have a "Mission Area Cooperation" agreement initiated ironically enough, by the Americans. This agreement has resulted in a two–way flow of technology and it is not well known that Indians have developed new sub–systems and processes that are being put into global use by American military contractors.
In November 1984, India and the United States signed a Memorandum of Understanding (MOU) on technology transfer to enhance trade and cooperation in advanced technologies, an MOU that is of great significance to India. The MOU facilitates India’s access to such technologies and sets out arrangements for the import of items from the United States whose export is controlled. It is instructive to note, as two Indian defense scientists, K. Santhanam and Rahul Singh, have pointed out in a paper prepared for a seminar organized by the Center for the Advanced Study of India at the University of Pennsylvania in October 1993, that this MOU was mutually agreed upon and implemented seven years before the more well–known 1990 Coordinating Committee on Multilateral Export Controls (COCOM) measures; thus advancing a case for India to be considered by COCOM on par with countries like Sweden or Singapore.
The MOU is generally recognized even by die–hard Indian critics of American policy to be a success. There have been avoidable cases of denial but this has only spurred indigenous development, which, in the long run, is good for India. But Santhanam and Singh, who have been intimately involved with the implementation of the MOU, argue that case–processing procedures by the United States have very often varied with what has been agreed to in the MOU. The cryo–engine case has had the maximum negative impact. This was very clearly a nonmilitary application but the Americans thought otherwise.
Most importantly, from India’s point of view, the United States must give India credit for its exemplary restraint and maturity exhibited, quite unlike China. India would certainly like the United States to distinguish satellite launch vehicles from missiles. India would like America to exempt Prithvi as well, but I am not going that far. Prithvi is a missile even though it may fall below the threshold of some definitions. But islanding of the Indian Space Research Organization (ISRO) from technology denials is absolutely imperative.
ISRO is fundamentally a developmental agency that is making tremendous contributions in civilian sectors such as broadcasting, communications, weather forecasting, and geographical information systems. The output of its remote sensing satellites is being used by the Americans as well. We would also like prelicense checks and postshipment verifications to be limited to really sensitive technologies as originally envisaged in the MOU. There are other "confidence restoring" measures that Santhanam and Singh identify. The essential point is that the MOU framework needs to be reactivated and given new life.
Second only to nuclear and missile nonproliferation and, in fact, closely linked to it in the American mind vis–à–vis India, is the vexed issue of Kashmir. If Kashmir was not bang in the middle of a nuclear cockpit, it would not cause so much concern in Washington. Here, while it is true that India’s human rights record has not exactly been a matter of pride in the last decade, let me also say that India has got somewhat of a "bum rap." We have not done in Kashmir what the Chinese have done in Tibet or what the Israelis did in the West Bank and elsewhere. There was no demographic invasion and every attempt was made to allow Kashmiris to retain their cultural identity within the framework of a large, secular India. Article 370 of our Constitution does precisely this and gives Kashmir unprecedented freedom and autonomy. And it was Jawaharlal Nehru, in one of his frequent bouts of high idealism, innocence, and morality who took the Kashmir dispute to the United Nations, much against the recommendation of his senior colleagues and much to the surprise of his Pakistani counterparts.
I am not going into history this evening. India has much to answer for not allowing free and fair elections except in 1977. India also has placed all its eggs in the basket of just one family in the Valley. No sensitive Indian can be comfortable with its human rights record in the past decade, even after factoring all the provocations. I do not become anti–Indian by this admission, as many of my jingoistic countrymen would like to think.
But the Americans have been no angels. Pakistan has been no angel, and the Kashmiri diaspora, both from our own Valley and more largely the Mirpuris from Pakistan–occupied Kashmir/Azad Kashmir, in the United Kingdom and the United States has fuelled separatism. The question is what happens next? Independence for Kashmir is just not in the cards from our perspective. This will mean revising the entire Indian compact drawn up in 1947.
A categorical statement from the United States in this regard that an Independent Kashmir is not its objective would certainly help, because one of the factors that has kept the Hurriyat going in the Valley is the notion that the Americans could be persuaded to support total independence. Loy Henderson’s ghost is very much alive in the Valley and was given a facelift by Robin Raphel just a couple of years back.
Once independence is ruled out, we can discuss other options. Kashmir is not Kosovo nor is it East Timor. It is sui generis and needs to be recognized as such. But the question is whether the Americans have the patience to understand the great complexities and nuances of the Kashmir imbroglio. It is not as simple and straightforward as it is often made out to be by Pakistan and its proxies.
What might the options be in Kashmir from an Indian point of view? I do not see any Indian supporting handing over the Kashmir Vale lock stock and barrel to Pakistan. A second partition would be disastrous for the world’s second–largest Muslim population that resides in India. From India’s point of view, converting the existing LOC into the international border would be the ideal solution, with the border being either "soft," as Benazir Bhutto has recently suggested, or "hard." But I realize that this would be completely unacceptable to Pakistan. Another option is to integrate Jammu and Ladakh into India and have a shared sovereignty with Pakistan over a united Valley. The details of how this shared sovereignty will work would need to be worked out. But will Pakistan play ball?But all these and other options are, at the moment, academic. Two things need to be done immediately. India has to seriously examine the question of autonomy to Kashmir and the issue of regional autonomy within Kashmir itself. True, the issue of autonomy to Kashmir cannot be divorced from the larger issue of autonomy to all states, but the better must not be allowed to become the enemy of the good. Voluminous reports on both these issues–autonomy to Jammu and Kashmir and autonomy within Jammu and Kashmir–have been prepared recently by committees. One alternative is to go back to the 1952 Nehru–Abdullah Accord and strictly follow Article 370 both in letter and spirit. India has to demonstrate greater sensitivity to public opinion in the Valley and expand the constituency with which it interlocutes. One of our weaknesses in the Valley is that successive governments in New Delhi have depended exclusively on just one family. That family has had a distinguished record of commitment to secularism but we just cannot continue to view the Valley through the prism of Mr. Farooq Abdullah alone. India’s other problem in sensitive states like Jammu, Kashmir, and Assam has been that corruption has been used by the Centre as a mode of cohesion. Development funds get siphoned off and a kleptocracy has developed. Indeed, the clamor for more development funds is really a claim to this creamy cake. Autonomy has to be accompanied by vastly improved governance.
Yesterday’s terrorists have become today’s mainstream politicians as our own experience in the northeastern state of Mizoram has demonstrated, where today, the terrorists of the 1970s are in power simply because they were enabled to do so first by Indira Gandhi and later by Rajiv Gandhi in an act of great statesmanship. But what makes Kashmir different is cross–border terrorism and the presence of guest militants, the legacy of superpower rivalry in Afghanistan in the 1980s.
I might add here in passing that the Americans need to think long and hard on what their Afghan policy will be. This will have profound effects on both Pakistan and India. In this context, it is most encouraging that Indian officials, for the very first time, have had a bilateral dialogue with their American counterparts on the Afghan situation following the banning of Ariana flights from Amritsar to Kabul. India is also beginning to realize that its objectives and American goals on counterterrorism coincide and converge. We should work towards some major initiatives in this area. Bin Laden has done more to bring India and the United States together than an army of diplomats.
So far I have talked about the nuclear, missile, and Kashmir issues, all of which are interconnected and all of which raise the need for a new generation of real ICBMs–Indian Confidence Building Measures. I was one of those who unequivocally welcomed the Lahore Summit and the MOU that was signed on February 21, 1999, between the foreign secretaries of Indian and Pakistan. The MOU is a big step forward and identifies a series of measures on which detailed consultations and negotiations must now commence with all seriousness of purpose.
Left to themselves India and Pakistan will engage in endless shadow– boxing and sabre–rattling. I am convinced that the United States has a role to play in "persuading" India and Pakistan to take the Lahore MOU forward to serve as the foundation for a whole range of explicit, transparent, and verifiable set of nuclear risk–reduction measures. This is an unpopular stance to take and will immediately make me suspect, more than I already am, among my political and other colleagues in India. But the sad fact is that we epitomize Newton’s First law tragically–that any body in a state of inertia will continue to be in that state unless it is acted upon by some external force! Actually many of my political colleagues privately agree with me but either lack the courage or have too much at stake to say so publicly.
Kargil has certainly vitiated the atmosphere but there is no escape to going back to the spirit of Lahore. There have been other risk–prevention measures that have been proposed. India itself has advocated a no–first–use pact as far as nuclear weapons are concerned. Also has been suggested an agreement that includes population centers in the list of nuclear installations that will not be attacked by each country’s nuclear weapons. Various publications and papers of American think–tanks, particularly of the Washington–based Stimson Center, have put forward numerous other ideas for nuclear and missile risk reduction. These have to be incorporated into both the Track–I and Track–II Agenda. The point that has to be grasped more fully in India as well as Pakistan is that confidence–building measures cannot be just declaratory statements made in a casual manner by either prime ministers. They have to be negotiated. They have to be verifiable. They have to be monitored. And we cannot forget that response times in an India–Pakistan or an India–China conflict situation are going to be very, very short, unlike a China–U.S. or a U.S.–USSR/Russia spat. It is this geographical contiguity among nuclear antagonists that impart a sense of urgency to confidence–building measures.
The way Track–II diplomacy has been brought into disrepute in both countries in recent months is tragic. Having gone nuclear overtly, India can no longer tell the international community to back off. The fact is that South Asia is a nuclear cockpit. Worse, in other troubled regions at least the antagonists are talking to each other officially or unofficially. It is only between India and Pakistan that dialogue, discussion, interaction, exchange of envoys, and a genuine desire for peace is missing. The world is right to get concerned.
There is, however, a thin dividing line between intervention and persuasion. What I am certainly advocating is friendly persuasion, cajoling and nudging by America so that India and Pakistan face each other across the table at all times. I, for one, am simply unable to understand why we should shy away from a regional conference on nuclear issues involving India, Pakistan, and China. For many years, I thought that what South Asia needs is its version of the 1977 Treaty of Tlatelolco that makes South America a nuclear weapons–free zone. That is not possible now since three countries in our region already have nuclear arsenal. But this should now lead us to bilateral and trilateral confabulations.
One of the reasons why India’s image in the United States has suffered is because it has been seen to be a regional hegemon. But in the past few years, this has changed. In fact, the regionalization of the polity has made our relationships with our neighbors more relaxed and proactive. India has taken unilateral measures to promote trade in SAARC. We are pretty serious about the South Asian Free Trade Association (SAFTA) by the year 2002. Very recently, there has been talk about a South Asian Economic Union. All countries, including Pakistan, will gain by this, although the fact that Pakistan continues to deny most–favored nation status to India is major stumbling block.
India’s changed attitude towards its neighbors has not gotten adequate notice and credit in the United States. India has signed a major water–sharing treaty with Bangladesh and it has also signed a number of agreements with Nepal. It continues to support President Kumaratunga in her efforts to bring peace to her troubled island country. I think we need a new vision for SAARC, grand initiatives that will herald a whole new direction to our people.
I have two specific ideas in mind. One, a SAARC Parliament, initially nonlegislative to begin with but over time that could well evolve into a European parliament–like institution. The impetus to this must come from the SAARC countries themselves but friends, well–wishers, and financiers from outside can certainly help. Two, the Himalayan River system is need of a major development initiative along the lines of the Mekong River initiative. The prosperity of over a billion people in four countries is closely linked to such an initiative in the Brahmaputra–Ganga–Barak basins.
It is beyond the capacity of individual governments to sustain such an initiative on their own. The Indus Waters Treaty, an outstanding monument to Indo–Pak cooperation that has survived three full–scale wars was first conceived of by David Lillienthal, one of the catalysts of the TVA. It was his perseverance and the World Bank’s involvement that made the Treaty finally possible in 1960.
I should say a few words on our relationship with China since that impacts on the regional environment. As some of you may be aware, India and China signed an historic border agreement in 1993 and followed it up with another agreement on confidence–building measures in 1996.
It required great political courage and wisdom for Prime Minister Narasimha Rao to go against the conventional wisdom and enter into these agreements. Interestingly, these agreements have been hailed as major breakthroughs by no less a person than Neville Maxwell himself, the journalist–scholar who has been consistently arguing that India provoked China in 1962 and has refused to engage the Chinese in any meaningful negotiations.
The world has not taken note of these Accords, which, in my view, open the way for a radical transformation of Sino–Indian relations provided the two countries continue to talk to each other, especially on nuclear and missile matters. There have been some hiccups with some ill–advised statements from our side. China’s restrained reaction during Kargil may well change Indian mindsets.
There has been much opposition to the WTO in India. I have been countering it with many arguments, one of which is that there is just one country where the opposition is even more severe–namely, the United States. Most Indians even today see the WTO as some giant American plot to "Coca Colanize" the world even though India has actually won some trade disputes against the United States in the WTO forum. What I find disturbing is that while gradually we have accepted and are getting used to the WTO regimen, the United States is still deeply ambivalent. Marcus Noland has captured the American negativism, suspicion, indifference, and hostility to the WTO very well in a recent article in Foreign Affairs.
Specifically, as far as India is concerned, the narrow, legalistic approach to trade issues adopted by the U.S. Trade Representative (USTR) has given the impression that the United States is not particularly anxious to arrive at a negotiated settlement of issues of interest to India, though on issues of interest to them, they expect India to be very cooperative. In the dispute relating to the phase–out of quantitative restrictions (QRs), India was able to arrive at an amicable settlement with every important country except the United States. The difference between India and the United States was on one point. India was willing to remove QRs over a six–year period starting from April, 1 1999, whereas the United States wanted it done in five years.India was willing to frontload agricultural items of interest to the United States but the USTR was adamant and India was unnecessarily taken to the dispute settlement panel. India has lost in the panel as well as in the appellate body. But it does not matter since India is committed to phasing out the QRs in its own economic interest. In fact, the phase–out is turning out to be faster than envisaged but the United States’ intransigent attitude has soured what has been a healthy working relationship. India and the United States will now have to negotiate a reasonable period of implementation. The deadline originally indicated by the Americans was March 31, 2002, which is acceptable to India but now the United States wants to further compress the schedule. This is needless muscle–flexing.
Many years ago, India being a major importer of food grains had bound duties at very low levels–rice at zero duty, for example. Now, following its agri–successes achieved, I may add, with considerable assistance from the Americans for which I agree we are not suitably grateful in public, and following the procedure envisaged in Article XXVIII of the WTO Agreement, India wants to increase these duties. India has arrived at a settlement with the European Community and with Australia. But even after two and a half years, the United States is not seriously engaging itself in negotiations with India. The United States has itself very high tariffs on many agri–commodities, and India has expressed its willingness to pay reasonable compensation to the United States by agreeing to reduce the bound tariff in respect of some products of interest to the United States.
The Information Technology Agreement (ITA) is another source of friction. India has joined ITA–I and agreed to zero tariffs without any reciprocity from the United States. The EU, on the other hand, received a quid pro quo. But let this pass. Now ITA–II is on and there is a stalemate because the United States has refused to be sensitive to India’s interests and concerns, unlike its attitude towards the EU.
As things stand today, there will be no QRs on imports and clothing by India by 2001 or so whereas the United States will continue to maintain QRs on textiles and clothing products till January, 1, 2005. This is highly iniquitous. The products in which India has enormous interest will see quota abolition only on January 1, 2005. Accelerated liberalization of the implementation of the Agreement on Textiles and Clothing is the single, most important step that the United States can take to demonstrate its commitment to free and fair trade and its readiness to shoulder equal responsibility when it asks other countries, like India, to take politically risky decisions.
Super/Special 301 of the United States’ 1988 Trade Omnibus Act is very much alive. Paragraph 4 of Article XVI of the WTO Agreement says that "each member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements." This implied that 301 will be rescinded. This has not happened. In fact, section 300 action is threatened even when a country has complied with its TRIPs obligations on the plea that the United States is not satisfied with mere implementation of TRIPs obligations and that it wants implementation of higher standards of intellectual property protection. India continues to figure in the "watchlist," "priority watchlist" even though it is in compliance with its WTO obligations. Section 301 is totally inconsistent with the WTO obligations of the United States, and if the United States is serious about multilateral frameworks for policing global trade, it must go.
The frequency with which America resorts to antidumping investigations has compounded the problem. The arrogance with which you approach antidumping investigations elsewhere is breathtaking. There is a particularly nasty case going on in India for the past few years and this relates to complaints of dumping by American soda ash manufacturers in India. The Indian government agency has followed the EU’s own experience and given a verdict. This has been objected to in the most vituperative language by the powerful soda ash lobby in the United States and even someone like me, who is otherwise favorably disposed to the United States, winced when I read the objections filed by the American cartel, and the sweeping and virulent criticisms it made to the USTR of our antitrust agencies and of our judiciary as well. Such high–handedness is not calculated to win friends and influence people. It is no use saying that this is the exception rather than the rule. It is the exceptions that get the maximum media attention and mold public perceptions.
Under the WTO agreement we have time till January 1, 2005, to introduce product patents for pharmaceuticals. This has been a major bone of contention between India and the United States but now the United States must back off. We take our international obligations seriously. We are not in violation of any WTO ruling and we stand committed to doing what we have agreed to do. You doubt our credibility. But why should we take you on your word on textiles where the MFA abolition is so backloaded that 51 percent of the quota vanishes on December 31, 2004. And there is no guarantee on what tariffs you will impose on textiles even after the MFA has been abolished. If the United States wants to build its credibility on international trade, let it phase out textile import quotas more rapidly than it has done so far and let it slash tariffs as well. The same applies to agricultural trade liberalization as well where the track record of the United States, EU, and Japan hardly inspires any confidence that they are committed to honoring the Uruguay Round pledges.
The social clause continues to be a bone of contention. In this connection, economists like Jagdish Bhagwati have vociferously campaigned against the U.S. position. I can hardly improve on their arguments. All I can do is quote a paper of Richard Freeman, the noted labor economist who shows that it is not imports from low–wage countries but changes in technology that have destroyed American jobs, if at all. America’s trade with low–wage countries is just 3 percent of her GDP, compared to 2 percent in the 1960s.
As far as the upcoming Seattle Ministerial Meeting of the WTO is concerned, India and the United States both have been resisting EU efforts to bring investment and competition on the agenda for the next round of negotiations. But the U.S. move to push for an agreement on transparency in government procurement has raised hackles in India. I would think that as long as there is categorical assurance from the Americans that this is not the thin end of the wedge and would not be used to push for a broader market access agreement, the transparency agreement would, actually, be also in our interest.
I have already alluded to the social clause and the Americans are keen on a working group on trade and labor in the WTO. This is simply unacceptable to India, and for weighty economic, social, and political reasons. India wants solutions at Seattle for some of the more significant of the implementation concerns it has rightly expressed regarding the Uruguay Round commitments and pledges, especially on TRIMs, antidumping and TRIPs. But the United States has not been particularly forthcoming in spite of repeated Indian requests. Actually, in the Seattle Round Indian and American interests converge, unlike in the Uruguay Round. That is why, in addition to the multilateral track, it is important to keep a bilateral track of discussions and consultations always open.
Earlier I spoke about that magic "V" word–magic from our point of view and perhaps dreaded from yours: the issue of visas. The H1–B visa that is given to our software professionals is not an issue right now but it has a tendency of erupting every once in a while and therefore it is important to come to grips with it. The current global limit for H1–B imposed by the United States is 115,000, applicable in 1999 and 2000. Incidentally, the cap was exhausted in June 1999 itself. It comes down to 107,500 in 2001 and 65,000 in 2002. The visa year is October–September. Roughly one–third of the global limit is India’s share.
To sustain a 40 to 50 percent dollar revenue growth in software exports over the next four to five years, India will need to send about 200,000 professionals to the United States on H1–B visas. If current limits are applied, then we are talking about a shortfall of anywhere between 70,000 to 80,000. It is also a matter of great concern that the 2002 global limit when our exports would have really consolidated and would be ready for an even bigger leap comes down dramatically. The visa cap has to be at 125,000 at least even beyond the year 2002.
There is a great deal of hypocrisy here. These are exactly the type of professionals the United States wants and woos, and yet we hear cries that these guys want to settle down in the United States. A bit of honesty would do the United States no harm especially in view of the shrinkage in U.S. science graduates. The H1–B itself suffers from many infirmities and is not designed to promote international trade. For example, the United States has stipulated wage parity on foreign skilled manpower working in the United States for short durations. This is tantamount to imposition of a nontariff trade barrier and eroding a country’s comparative advantage. India sees the visa issue not as an immigration issue as the United States does, but as a trade issue. We need to be sitting down calmly and working things out. But I find this is one issue on which our BP’s get unnecessarily raised.
The H category of visas is meant for those professionals who are employed or are being employed in the United States. This is really not applicable to Indian software professionals who are employed in India and who are required to visit the United States only for short durations. Prior to October 1992, such professionals could get the B–1 visa very easily, often at a day’s notice. The reintroduction of the B–1 visa is essential for promoting offshore development, an objective that both India and the United States share for different reasons.
There is also the problem of double taxation of social security, which is making the Indian software industry noncompetitive. The total incidence of such taxes is about 21.5 percent. Indian software professionals obtaining wages in India are required to get their provident and other social security taxes deducted at source. But they are also required to pay additional, nonrefundable, social security taxes in the United States even for short–term assignments.
The United States has signed what are called "Totalization Agreements" with countries like Australia, the United Kingdom, France, and Korea so as to avoid dual payments social security taxes. These agreements normally provide that an individual be covered under the social security system of only one country, usually the home country. A similar agreement between India and the United States is now urgently called for. The Double Taxation Avoidance Treaty that has been signed between the two countries does not have this important provision.
India has been deeply disappointed by the American attitude to India joining APEC. No doubt, ASEAN countries themselves are uneasy about India’s entry, especially given the legacy of the conflict over Kashmir. But America has been lukewarm to India’s case even though for the past three to four years India has gone out of its way to court the APEC nations. America supported Russia’s case, while Japan supported Peru. We could understand the Fujimori connection as far as Japan’s stance was concerned but America’s espousal of Russia over India was inexplicable.
This is an issue that will remain alive. India itself has to build bridges with ASEAN and other countries in the region and has to bring down its tariffs to ASEAN levels in the next two to three years, a promise made by successive finance ministers. This will mean roughly a halving of the average import–weighted tariff. To the extent that we keep our promises to continue with investment and trade liberalization, America too must put its considerable weight behind India’s candidature.
On the Montreal Protocol I do not see major differences between India and the United States. The Convention on Biological Diversity (CBD) is crucial for India. We have our own homework to do. We have to enact legislation. We also have a vital stake in bringing about greater compatibility between the CBD and the TRIPs Agreement. India has to ensure that IPRs are not granted where the subject matter is already in the public domain of the source country and where they are granted, the source country is compensated suitably for its contribution of materials and knowledge. This is one high–profile, high–visibility area where American support and understanding can enormously add to its goodwill in India so as to make progress on nuclear and missile issues easier.
But it is in regard to the 1997 Kyoto Protocol on Greenhouse Gases that serious differences have arisen between the two sides. The crux of these differences revolve around the CDM–the Clean Development Mechanism. Through the CDM, a developing country will receive capital investment, funding for projects and new technology while the developed country investor will receive credit for some share of the pollution reductions achieved.
India has many concerns. Why should America get credit for emission reductions in India? Why should it not change its own lifestyle? Will India not be short–changed and be left holding the bag, when after selling its emission credits, it is time for India itself to become accountable for emissions reductions? How do we ensure that obsolete technologies are not dumped as part of the CDM mechanism? Will CDM bring about additional resource flows? What should be the scope of projects to be included in the CDM? When should it start and what should be the mix for a country like America between emission reduction actions at home and buying off emission rights abroad?
Within the next twelve months it will be decided whether the CDM will, in fact, come into being. Right now, I can say that the CDM is looked upon with a great deal of suspicion and mistrust among many Indian NGOs and even in the government. Industry associations do see in the CDM the possibility of new inflows of investment and technology. But the gap between Indian and American perceptions on the very philosophy of the CDM and on the way it will work and be monitored is considerable.
The CDM must be seen not just as a smart device for helping America achieving its emission targets for greenhouse gases quickly but also as a genuinely cooperative and synergistic mechanism to spur sustainable development and the proliferation of clean technologies in countries like India. I would suggest that a major Track II effort be mounted to bring the two sides together. A former White House official has been in India over the past year working with an independent energy research organization trying to create a climate of opinion in India favorable to the implementation of the CDM and the Kyoto Protocol. But this is something that needs to be carried forward and strengthened.
This brings me to the whole issue of cooperation in what might be called the noncommercial sector. One of the most important initiatives of Ronald Reagan and Indira Gandhi from the early 1980s has been in the area of science and technology, which demonstrates that the two countries can come together for mutual benefit, setting aside differences provided there is political will. Political will can simply override administrative wont. The Reagan–Indira initiative yielded the 1984 High Tech MOU, which I have talked about earlier, and also paved the way for the landmark 1987 agreement on science and technology cooperation, which covered a large number of areas including health, materials, atmospheric sciences, energy, and biotechnology.
This agreement was to last ten years. It has already run its course. Attempts to revive the agreement and take it forward have been stymied by the American stand on India’s patent laws. Now that India is substantially in line with the WTO stipulations and, in any case, we have time till 2005 to introduce product patents in drugs, I think it is simply silly for the Americans to continue to play hard ball on a new comprehensive S&T agreement. This should be a matter of the highest priority.
Energy is a particular area for increased cooperation. Within energy I would place great stress on coal, which is our major resource. Incidentally, if we are able to get a program going on the full fuel cycle of coal, we will also be able to bring new investment into depressed and backward regions of India–our "rust belt," as it were. I recall during his tenure Frank Wisner took keen interest in trying to get Amoco to invest in a major coal–bed methane project in Bihar since he thought this would also be a good way of demonstrating that MNCs can contribute to the development of a poor state.
Unfortunately, by the time the Indian Government could decide whether coal–bed methane was a coal resource to be dealt with by the Ministry of Coal or a natural gas resource to be dealt with by the Ministry of Petroleum, Amoco got fed up and walked out of the project in September 1996. The coal–bed methane is still very much there.
How will such an agreement be funded? So far, we have been running the rupee costs out of the accumulated PL–480 funds. Something like Rs 45 to 50 crore (about $10 million) has been spent over the past decade. The PL–480 corpus has been exhausted and right now I believe something like Rs 100 crore is left. We need to think of new innovative financing mechanisms.
We need to create a fund of about $25 million, which could be used as seed money to launch a binational foundation for science and technology cooperation, particularly in the noncommercial sector. I believe such a foundation exists for cooperation between Israel and the United States. I would suggest that the government of India put up $10 million and the Indian diaspora come up with another $5 million. The balance could then come from the American side.
I would urge some of the newer and younger generation of Indian entrepreneurs or netrepreuners who have struck it rich in this country to spearhead the project so that they would be doing something substantial for their home country, which educated them at great cost to the public exchequer that has never been recovered.
If science and technology cooperation is to form a major area for bilateral cooperation, then the United States will have to review the curbs it has imposed on almost two hundred educational institutions and laboratories following Pokharan–II. It seems to me that this was an act of great pique on the part of the Americans. One knows of one center–the Nuclear Science Centre–in New Delhi, which had an excellent on–going association with Argonne Laboratories and it had nothing whatsoever to do with the bomb. Some bureaucrat in Washington must have seen red when he or she saw the name of the center. I recall suggesting to the director that the name be changed to the National Science Centre but by then the damage had been done. The review of the "entities list" is absolutely essential. America has a right to be piqued by Pokharan–II but it seems to me that the completely mindless manner in which this "entities list" of Indian educational and research institutions has been drawn up and made subject to restrictions on intellectual exchanges was most unnecessary and the sooner it is nuanced the better.
I would make a very special plea for reviving cooperation in agriculture. India has to double her food production in the next twenty years and further double it in the next twenty years in order to be able to feed a population of close to 2 billion by the turn of the next century. The United States has had a close working relationship with India in agriculture. Over 700 research projects have been supported. Something like $40 million worth of rupees has been invested.
Over 2,000 scientists have been educated and trained. A large number of research institutes in the public, private, cooperative, and not–for–profit sectors have benefited. But now that entire program that is an outstanding monument to the noblest sentiments that is cooperative endeavor is in danger of coming to a halt. The U.S. Department’s Foreign Currency Research Program is winding down because of the depletion of the PL–480 rupee funds that I mentioned earlier.
New programs and new sources of funding are needed to continue our collaborative efforts. A new PL–480 program based on India’s import of say, maize and soybean, might well be the starting point of a new push. The U.S. Department of Agriculture is, I am informed, embarking on the farm equivalent of the human genome project at Cornell University’s biosciences center. It seems to me that India must participate and play a key role in this project, backing up its participation with financial commitments as well.
I talked about product patents a while back. Let me share with you a concern I have in this regard that does impact on our relationship. India’s Green Revolution has been an outstanding achievement. But if the present mindsets on intellectual property rights protection in agriculture especially were prevalent in the 1950s and 60s, the Green Revolution would not have been made possible. The network of CGIAR institutions like CIMMYT in Mexico City and IRRI in Manila played a key role in the transfer of technology.
What I am worried about is that Borlaugian vision of the public role of agricultural R&D is virtually dead, and if the Monsantos of the world monopolize research, then countries like India are in serious trouble. Indeed, if just one company were to monopolize say, transgenic cotton and soybean, then not only India but America also would be in serious trouble. I would urge my American friends not to jettison their support for publicly funded R&D in key areas like agriculture and health. The private sector does have a role to play but what we are seeing is a dangerous theology. India has committed itself to legislate a protection for plant varieties but the Americans should not forget that as per the WTO agreement, this legislation has to be sui generis.
I still believe that cooperation in agriculture is a priority area for India. We want to modernize our agricultural universities, which were modeled after your land–grant college system. We have to upgrade our agricultural research laboratories. I do not see this happening without a close American involvement.
By and large, I think that there are no big issues that divide our corporate sectors. A new competition policy is on the anvil. The Companies Act in being government equity in a number of companies is being reduced to 26 percent–the world calls this privatization, we call it "strategic sales," because if we call it privatization there will be huge hue and cry. Such is the power of words. Insurance is bound to get opened up in the next few months after almost three years of effort. A new telecom policy has been announced and is being implemented. On telecom I happen to believe that India must allow 51 percent equity to foreign companies, but here I am in a hopeless minority–perhaps, this should be linked to some "concessions" by the Americans on textiles.
One issue that is agitating Indian corporates is that of 100 percent subsidiaries. Pfizer, for example, has a joint venture already in the country. Now, it wants to set up a 100 percent subsidiary. The fear is that the minority shareholder will be short–changed, the joint venture will suffer, and ultimately it will be the 100 percent subsidiary that will dominate. This is more a fear with Japanese companies than with American companies, although it is Pfizer’s case that has drawn maximum public attention and invited the most adverse comment.
There are weighty arguments both for and against what Pfizer has done. All I want to say here is that foreign companies must be sensitive to the local environment and should not do in India what would not be considered good corporate governance elsewhere. The U.S.–India Business Council, which I am reliably informed will soon be cochaired by Frank Wisner himself, should take up this issue and at least listen to the differing viewpoints.
I also want to raise a broader point relating to the role of regulation in promoting competition. The Washington Consensus underscores deregulation, privatization, and liberalization. Fine. But what about intelligent regulation? The American competitive system is itself founded on an institutional framework of the Justice Department, the FCC, the SEC, the EPA, the FDA, ITC, OSHA, the PUCs, and a host of other regulatory bodies that ensure that competition is free and fair, that very often induce the adoption of new standards and of new technology and protect the interests of consumers.
I think we have not had sufficient interaction between India and the United States on this issue. It may appear paradoxical but it is the regulatory aspects of a competitive, liberalizing, privatizing, globalizing economy on which the United States can teach us a lot. A cooperative program on regulatory institutions under the framework of USAID should be started.
While on the Washington Consensus itself, India must reduce its fiscal deficit substantially from the present level of around 8 percent of GDP to around 4 percent of GDP in the next four to five years, move faster on privatization and bring import tariffs down to global levels by the middle of the next decade, and keep up the momentum of deregulation. But after the East Asian meltdown, hopefully the Americans would have realized the limits of the consensus, at least in so far as liberalization of the financial sector is concerned. It has been an article of faith in what Jagdish Bhagwati has called the Treasury–Wall Street Complex to treat capital movements on par with movement of goods and commodities and to push for faster liberalization and globalization of the financial sector. This has spelt disaster for many countries but India has escaped because of its caution, which is unfortunately interpreted as being antireforms. India just cannot afford an Indonesia–type disaster from a social and political point of view. Caution and prudence is, therefore, understandable. Hopefully, in the current discussions on global financial architecture the lessons of East Asia, Russia, Brazil, and Mexico would have been imbibed by the pundits of Washington.
Very often the American government tends to get involved in a very pushy fashion when the issue is purely commercial. What then happens is that one specific commercial dispute or controversy gets elevated in status and becomes the litmus test of India’s intentions from an American perspective. This has happened, as for example, in the Enron case, which was a difficult and painful learning experience both for India and Enron. The fact that Enron went through something like twenty–six court cases over a two–year period and won every time says something for our judicial process, a point that rarely got highlighted throughout the imbroglio.
But just because we were driving a hard bargain did not mean that we were against foreign investment or that we were being obstreperous. Individual cases must be distinguished by the Americans from overall policy. If McDonalds or Kentucky Fried Chicken is facing resistance, heavens will not fall and Indo–American relations will not be disturbed. Another good example that conveys the essence of my point is the issue of accounting rates on long–distance telephone traffic. I recall telling Frank Wisner: Relax, Frank–let VSNL (our long–distance carrier) and U.S. carriers carry on a bilateral negotiation without governmental intervention from either side. But I recall that the Americans wrote stiff letters to the Indian government and gave us the distinct impression that if we did not reach an amicable settlement soon, there would be hell to pay. I might add that VSNL has been negotiating a 10 percent decline every year. The latest proposal is for a rate of $1.16 per minute, which has yet to be agreed upon by the U.S. carriers. A gradual lowering of rates is very important for India.I now come to India’s place on the American campus circuit. There was a time when India was in vogue but not any longer. Our own restrictive visa policies and our suspicious attitudes towards social science research has turned away many American academics. I recall the late Myron Weiner telling me once that the Indian government was singularly responsible for the noted scholar Barney Rubin–I think it was–turning away from our country. India’s loss was Afghanistan’s gain. The Indian diaspora has not been very forthcoming in supporting India–related chairs and programs. Some NRI businessmen have funded Vedic studies centers and, indeed, some Indo–American initiatives have taken place at the universities of Pennsylvania, Columbia, and Berkeley, although not at the scale originally envisaged.
One of the most promising initiatives in this regard is the MIT India Program, which has been launched because of the enthusiasm and energy of Kenneth Keniston. No corporate or government funding is involved as yet. But sixteen MIT students have already worked in India under the program. Harvard’s Jeff Sachs has a modest India program and Ezra Vogel, also at Harvard, has spoken to me about his interest in bringing India into the ambit of the Asia Research Center there. Of late Stanford has emerged as a center where studies on the Indian economy are being undertaken. But India’s profile and place on American campuses, the pillar of its intellectual establishment, needs major refurbishment and a quantum leap
I have often wondered what might have happened to Indo–American relations had an earlier generation of public personalities and political figures crossed the Atlantic and had been educated in the Cambridge by the Charles and not by the Cam or had been exposed to Ford, not Oxford. Two who did cross the Atlantic made a great difference. Dr. Babasaheb Ambedkar returned with a strange, deadly, and wholly welcome virus that was to rock Indian society–Constitutional Egalitarianism. Sardar Pratap Singh Kairon returned determined to make Punjab a Kansas or an Iowa–clone in farming at least. As far as I can make out, there was only one other politician who went to America and returned those years but unfortunately he went to Wisconsin during the Depression and returned a Marxist to begin with. This was JP, Jayaprakash Narayan, for whom, I hasten to add, I have the highest admiration. India is not like China where, I am informed by my China–watcher friends, an earlier generation of Soviet–trained middle–level political leaders has been replaced by an entirely new generation of American–educated professionals. I see this in other countries like South Korea as well. That it is not happening in India has to do with the very nature of our politics and of career choices being made by the educated and the professional classes.
One of the most important dimensions of our bilateral relationship which has received a boost in the past two to three years is the visits made by American political leaders to India. What is interesting is that many of these visits are being actually sponsored by our apex industry organization, the Confederation of Indian Industry (CII). The CII has financed and arranged the trips of about thirty–eight congressmen, congresswomen, and congressional staff members in 1998 and 1999.
This has helped improve perceptions of India on the Hill. I think it was a hostile Rep. Torricelli who went to India and returned a friend. There is nothing better than seeing and feeling for yourself what a noisy democracy India is–very much in the American mold, I might add. The noise of Indian politics is the music of its democracy. But it is not seen as such. American think–tanks, on their part, have to increase their exposure to our political class, both at the national and regional levels. I hasten to add that this is not a plea on my own behalf but on behalf of so many of my colleagues who need to be better educated of American decision–making and appreciative of American concerns. American politicians outside of Washington, like governors of key states from India’s point of view, have to be made more aware of India. And India should not be obsessed with the Pallones and the Ackermans–it has, however difficult that might be, to keep the pressure on the Helms and the Burtons. Both sides tend to preach to the converted.
We also tend to view each other monochromatically. Many of the problems we face in our bilateral relationship stems from a profound lack of understanding of how our respective multilayered, pluralistic democracies work. The two political parties in the United States have a number of policy and leadership training institutes associated with them and it would be a fruitful exercise for these institutes to launch a Track III dialogue with their counterparts in different Indian political parties. The absence of political leaders in Track II is striking.
I earlier paid tribute to the Jaswant Singh–Strobe Talbott dialogue. The fact that "rank" and "protocol" were set aside to keep this dialogue going is a testimony to the distance India has traveled in her approach to the United States. But I still feel that there is need to give an institutional focus to such a dialogue and make it more broad–based. For example, our scientists and military experts are not part of our delegation.
America has high–level binational commissions with Mexico and Russia, I believe. A similar body with respect to India should be considered seriously by both sides. Every year, at least four to five senior cabinet ministers from both sides must engage in dialogue on issues of mutual interest. And certainly we need to interest the president and the vice president of the United States more deeply with India.
Earlier I mentioned the recent bilateral talks between an Indian official delegation and American officials on Afghanistan. This is the type of broader dialogue that India and America should be engaged in on a separate channel altogether. We could periodically share our perceptions on issues that are strictly not on the bilateral agenda but that nevertheless are of great importance to both sides–like, for example, developments in China and Russia. This will also give India a feeling that the Americans are interested in hearing our point of view on world affairs.
I should also mention that in recent times India has taken to sending special envoys to the United States and talk to various interest groups. I recall making this suggestion to Prime Minister Narasimha Rao way back in June 1991 but for some reason it could not be operationalized. But I find that following Pokharan–II, the government has actually backed nonofficials to articulate India’s concerns to various constituencies in the United States. I think this is a most welcome trend and should persist not just on security matters but also on other issues of mutual concern.
I have often wondered what might have happened to Indo–American relations had an earlier generation of public personalities and political figures crossed the Atlantic and had been educated in the Cambridge by the Charles and not by the Cam or had been exposed to Ford, not Oxford. Two who did cross the Atlantic made a great difference. Dr. Babasaheb Ambedkar returned with a strange, deadly, and wholly welcome virus that was to rock Indian society–Constitutional Egalitarianism. Sardar Pratap Singh Kairon returned determined to make Punjab a Kansas or an Iowa–clone in farming at least. As far as I can make out, there was only one other politician who went to America and returned those years but unfortunately he went to Wisconsin during the Depression and returned a Marxist to begin with. This was JP, Jayaprakash Narayan, for whom, I hasten to add, I have the highest admiration. India is not like China where, I am informed by my China–watcher friends, an earlier generation of Soviet–trained middle–level political leaders has been replaced by an entirely new generation of American–educated professionals. I see this in other countries like South Korea as well. That it is not happening in India has to do with the very nature of our politics and of career choices being made by the educated and the professional classes.
One of the most important dimensions of our bilateral relationship which has received a boost in the past two to three years is the visits made by American political leaders to India. What is interesting is that many of these visits are being actually sponsored by our apex industry organization, the Confederation of Indian Industry (CII). The CII has financed and arranged the trips of about thirty–eight congressmen, congresswomen, and congressional staff members in 1998 and 1999.
This has helped improve perceptions of India on the Hill. I think it was a hostile Rep. Torricelli who went to India and returned a friend. There is nothing better than seeing and feeling for yourself what a noisy democracy India is–very much in the American mold, I might add. The noise of Indian politics is the music of its democracy. But it is not seen as such. American think–tanks, on their part, have to increase their exposure to our political class, both at the national and regional levels. I hasten to add that this is not a plea on my own behalf but on behalf of so many of my colleagues who need to be better educated of American decision–making and appreciative of American concerns. American politicians outside of Washington, like governors of key states from India’s point of view, have to be made more aware of India. And India should not be obsessed with the Pallones and the Ackermans–it has, however difficult that might be, to keep the pressure on the Helms and the Burtons. Both sides tend to preach to the converted.
We also tend to view each other monochromatically. Many of the problems we face in our bilateral relationship stems from a profound lack of understanding of how our respective multilayered, pluralistic democracies work. The two political parties in the United States have a number of policy and leadership training institutes associated with them and it would be a fruitful exercise for these institutes to launch a Track III dialogue with their counterparts in different Indian political parties. The absence of political leaders in Track II is striking.
I earlier paid tribute to the Jaswant Singh–Strobe Talbott dialogue. The fact that "rank" and "protocol" were set aside to keep this dialogue going is a testimony to the distance India has traveled in her approach to the United States. But I still feel that there is need to give an institutional focus to such a dialogue and make it more broad–based. For example, our scientists and military experts are not part of our delegation.
America has high–level binational commissions with Mexico and Russia, I believe. A similar body with respect to India should be considered seriously by both sides. Every year, at least four to five senior cabinet ministers from both sides must engage in dialogue on issues of mutual interest. And certainly we need to interest the president and the vice president of the United States more deeply with India.
Earlier I mentioned the recent bilateral talks between an Indian official delegation and American officials on Afghanistan. This is the type of broader dialogue that India and America should be engaged in on a separate channel altogether. We could periodically share our perceptions on issues that are strictly not on the bilateral agenda but that nevertheless are of great importance to both sides–like, for example, developments in China and Russia. This will also give India a feeling that the Americans are interested in hearing our point of view on world affairs.
I should also mention that in recent times India has taken to sending special envoys to the United States and talk to various interest groups. I recall making this suggestion to Prime Minister Narasimha Rao way back in June 1991 but for some reason it could not be operationalized. But I find that following Pokharan–II, the government has actually backed nonofficials to articulate India’s concerns to various constituencies in the United States. I think this is a most welcome trend and should persist not just on security matters but also on other issues of mutual concern.
No discussion on Indo-American relations will be complete without a reference to the enormously creative, wonderfully innovative, highly educated, and tremendously rich Indian diaspora in the United States. The diaspora is not monolithic and is as variegated as are India and the United States. There is an academic diaspora, a corporate diaspora, a literary diaspora, a trade and commercial diaspora (the Patels who run the motel business, for example), a scientific and technological diaspora, and now, increasingly, an entrepreneurial diaspora. It is a doubly privileged diaspora, coming from the priviligentsia in India and belonging to the upper crust in the United States.
I agree that further liberalization and opening up of the Indian economy will open new opportunities for the diaspora’s closer involvement in the Indian economy. No amount of government schemes can substitute for this. But I cannot resist the temptation of some sweeping generalizations that come to my mind as a close observer of the diaspora and its habits, although I am well aware of some noteworthy initiatives that have been taken by, for instance, Indian professionals in Silicon Valley. Fund-raising for the Indian Institutes of Technology, one of the most dynamic export-oriented and America-directed sectors of our economy has commenced in right earnest. I am also well aware of the growing involvement of Indians in lobbying for us on Capitol Hill–the Indian finance minister could get to see Senator Jesse Helms in October 1997 only because an Indian-American from North Carolina could swing the appointment. Young second-generation Indian-Americans are active on the Hill and in law firms working with Congress.
The question is simple–why is the Indian diaspora so different in its mindsets and its commitments from, say, the Israeli or Chinese diasporas? It is well known that 70 to 75 percent of the foreign investment flows to China are from the overseas Chinese. In the case of India, the proportion is about a sixth to a fifth but I should also add a caveat–many of these NRI (non-resident Indian) investments are actually resident Indian investment flowing back. I find the diaspora wrapped up in itself. I find the diaspora supportive of religious fundamentalism and insensitive to the plural traditions and heritage of the society it has left behind. With some honorable exceptions, the diaspora has displayed a singular lack of social conscience. It is not enough for the diaspora to say that India is not keen on it. There are not enough Sam Pitrodas who gave up everything and decided to devote ten years of his productive life in the service of the nation–and he had made a difference.
It has to demonstrate greater sensitivity and a willingness for long-term engagement on issues of concern to India. And it has to play a greater role in supporting programs, projects, and institutions dedicated to bringing our two countries together. The market cap of companies promoted by Indian software professionals and listed on NASDAQ is over $16 billion when I last did a survey some months back. It is not resources that is in short supply but a will, a vision, a larger commitment.
I would also suggest that America take the lead in a Track III involving Indian and Pakistani diasporas. If overseas Indians and Pakistanis, especially of the younger generation, can be brought together on a sustained basis, there may well be new pressure point for peace and goodwill in the subcontinent. At present,Indian-Americans and Pakistani-Americans, with a few exceptions, mirror and reflect tensions and hatreds back home.
While it is true that America must begin to take India seriously in its own right and be more understanding of and sensitive to its concerns, more importantly, India has to "get its act together" in relation to the United States. It is up to us to manage the diplomatic theater, to use Gerald Segal’s phrase, which he has used in relation to China, in such a manner that draws America into our web. It is not enough for us to say that we desire closer ties. These ties will not materialize out of thin air. We have to, using an Americanism, "hustle" on the basis of better and more detailed homework.
Both sides, I must admit, are conscious of what they have to do and things have, indeed, changed dramatically as compared to where we were ten years ago. The frustration is really on the pace of change and how opportunities are being missed by both sides. The frustration is how two natural allies and partners very often look at each other suspiciously. As somebody caught in the middle, my frustration with India is with the slow pace of reforms and very often our testy and hyper–sensitive attitude towards America, and my frustration with America is its lack of sensitivity to genuine Indian concerns, its unwillingness to acknowledge the special nature of problems that India faces, and its inability to look at India as a partner in its own right. I feel America does not as yet fully realize how far India has transformed its economic mindset. There may not be unanimity in India and indeed that unanimity may well be undesirable. But there is certainly a robust consensus on the direction of economic policy, a consensus that ensures that no reversals or U–turns take place and a consensus that ensures pragmatism on the part of political parties when they are in power.
America also does not understand fully the "multiverse" of democracy as it operates in India. Democracy is not just about good governance. It is also about full representation, about equal voice, about asserting social identities and about bringing disadvantaged groups into the mainstream. The war cry among disadvantaged and discriminated Indians is no longer for charity but for parity. It is this demise of the old social order that is responsible for political uncertainty in the 1990s. This may well have affected the pace of reforms, but on the other hand this has resulted in profound social engineering that is transforming a civilization whose DNA has been inequality and hierarchy for over 3,000 years at least. What I want my American friends to realize is that India is in the midst of three profound transitions simultaneously, each feeding on the other and sometimes conflicting with each other–economic liberalization, political decentralization, and social empowerment. To keep India together and going without too much strife as we envisaged it on August 15, 1947, in the midst of these transformations is not easy.
India has tended to look at its relationship with the United States in compartments. The time has come to have a unified approach so that we can trade–off "concessions" we may well have to make in the nuclear and missile areas with "benefits" we can extract on the trade and investment fronts. In reality what we have ourselves to realize is that these so–called concessions are not "concessions" but measures we should be taking on our own–like, for example, a world–class intellectual property protection system is in India’s own interests and is not a favor we are doing for the United States.
I have not discussed bilateral contacts between NGOs and cooperatives where there is great potential. I have not discussed mutual interaction in the fields of arts, culture, and entertainment where too much can be done. India could gain considerably by allowing The Wall Street Journal and Time to publish out of the country, as they have been wanting to do for the past few years but have been unable to do so because of opposition from the local media barons who otherwise are all for competition and globalization. I have not discussed the bilateral aid program that, although small in relation to India’s needs, in relation to what India gets from countries like Japan, and in relation to what America spends in countries like Egypt, is supporting key projects such as the important family planning project in Uttar Pradesh. Indeed, America must not only support greater bilateral and multilateral assistance in Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan–poverty and stagnation bowl of India–but also link it with better governance and fiscal reforms.
The whole idea of this paper has been to lay out the menu on some of the more prominent issues so that it is possible for us to identify what we "like" and what we "dislike." We cannot have everything our way, and there is no point in India having an exaggerated notion of its own importance or criticality. We are critical in South Asia but we will need something more than mere demography to give us a niche in world, for greatness comes not from promise but from performance. India has to make up its mind what it wants from the United States in an integrated framework and then go after it single–mindedly. It is, I believe, as easy to woo America as it is to irritate it.
But as long as the Indian ruling elite is preoccupied with admissions for its children in American colleges, I do not expect any miracles. The establishment’s hypocritical attitude of public confrontation and private obsequiousness, of kick when in service but cosy up when retired has cost the people of India dear.
If India seeks a global role for itself, it must play by global rules. The problem has been that we want global recognition and American endorsement but on our terms and conditions. This is simply not possible. India wants rights but these rights come with responsibilities. The recognition of this harsh reality is sinking in into our consciousness, albeit at a pace not to the liking of our American friends and some of us within the country as well.
The last decade has seen India and America set aside the bitterness and hostility of the past and engage themselves in dialogue across a broad spectrum. It is as if America and India are rediscovering themselves with the intensity and curiosity of long–lost lovers. The passion, should, however, not expend itself quickly. A jilted America is worse than an indifferent America. A disillusioned India is worse than a suspicious India.
It is in the interests of both countries that there be a sense of realism on both sides, an honest recognition of differences, and an appreciation that these differences emanate from differing perspectives and not any knee–jerk obstructionism and bravado and a constant willingness to engage each other in dialogue and discussion. India has to bring about a transformation in its own mindset in relation to America just as America itself has to understand where India is coming from. Most of all, there has now to be a resolve to go beyond a preoccupation with the "optics" of the relationship and to get down to nuts and bolts in a spirit of give and take on both side
A paper of such breadth, if not depth, would not have been possible without discussions with a number of sectoral experts. I wish to thank Dr. Abdul Kalam, K. Subrahmanyam, K. Santhanam, V. Ramamurthy, Dr. R.A. Mashelkar, Alok Prasad, Rakesh Sood, Raja Mohan, R.K. Pachauri, Lt. General (Retd) V.R. Raghavan, Brigadier (Retd) Vijai Nair, Dewang Mehta, A.V. Ganesan, Tarun Das, Kenneth Keniston, S. Narayanan, and Ambassador Richard Celeste. Over the years I have also had very useful conversations on Indo–American relations with the late Myron Weiner, P. Chidambaram, Jagdish Bhagwati, Abid Hussain, Montek Ahluwalia, N.K. Singh, Harish Khare, Shekhar Gupta, Marshall Bouton, and Frank Wisner. My thanks to them as well. Research Papers of the Stimson Center have greatly added to my appreciation of our bilateral relationship as it relates to nuclear and missile matters. I had first discussed some of the issues raised here in my columns in India Today (June 1, 8, 25, and 29,1998; September 14, 1998; November 9,1998; May 24, 1999; June 28, 1999; July 12, 19, and 26, 1999; and August 2, 1999).
