India - East Asia

Oct — Dec 2009
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Treading Water

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India-US relations were characterized by a degree of ennui while India-East Asia relations were overshadowed by public tensions between China and India throughout much of the year. The Obama administration, preoccupied by multiple high-stakes domestic and foreign policy priorities, offered up two high-profile visits for New Delhi with Secretary of State Hillary Clinton going to India in July and Prime Minister Manmohan Singh coming to Washington in November as the first head of state visit. But the newly strengthened Congress-led government, which returned to power after the April-May national elections, remained wary of the Obama administration’s priorities and approaches toward a range of issues including its Afghanistan-Pakistan (AfPak) strategy, nuclear nonproliferation, and climate change, as it felt some nostalgia for the primacy of place and purpose offered to India by the bygone Bush administration. Meanwhile, in India’s ties with East Asia, even though New Delhi made diplomatic forays ranging from Mongolia to Papua New Guinea to the Pacific Islands Forum to Australia while sustaining its traditional relationships with Japan and ASEAN, the tense Beijing-New Delhi interaction over the decades-old border dispute was the focus of attention for most observers.

The twain did (and did not) meet between India-US and India-East Asia relations. Of particular note during the year was the joint US-China communiqué following President Obama’s visit to Beijing that referred to US-China cooperation on South Asia. To the Indians this had echoes of the Clinton administration when similar language was used after India’s nuclear tests and was highly objectionable then and even more so today given the progress in US-India relations and the absence of nuclear tests. For the US, thinking of South Asia in broader terms including AfPak, and cooperating with China accordingly is entirely reasonable – and not directed at India. Indians also noted that Secretary Clinton did not refer to India in her major speech on Asia before traveling to the region in February; a sign of the continuing US ambivalence (not to mention India’s) about New Delhi’s role in Asia.

India-US: two visits in search of a purpose

As discussed in last year’s summary (see “India-US and India-East Asia Relations: Old Narrative, New Chapters,” Comparative Connections, January 2009), the relief surrounding the culmination of the US-India civil nuclear cooperation agreement gave way to an intricate and complex challenge for bilateral relations resulting from the attack by Pakistan-origin militants on Mumbai in late November 2008. For the first time in the history of such terrorist attacks in India, Indians and Americans (as well as citizens of other countries) were killed in the massacre.

While Washington launched a flurry of high-level visits to the area (including by Vice President-elect Joseph Biden during the US transition) and India and Pakistan refrained from military brinksmanship in the aftermath of the 11/26 attacks, dialogue between Islamabad and New Delhi came to a halt. In this context, the incoming US administration’s policy preferences (spelled out as early as then candidate-Obama’s Foreign Affairs article in the Fall of 2008) for India-Pakistan talks and Indian overtures on Kashmir to relieve pressure on Pakistan so that it could focus on the domestic militancy and counterinsurgency and counterterrorism operations along the Afghanistan border were not to be realized until late in the year.

Two mixed India-Pakistan meetings were held during the year. The first took place in June in Russia on the sidelines of the Shanghai Cooperation Organization (SCO) meeting at which Prime Minister Singh bluntly told President Asif Ali Zardari that Pakistan must dismantle its terrorist infrastructure before any dialogue could resume. Another meeting on the sidelines of the Non-Aligned Movement (NAM) meeting at Sharm el-Sheikh, Egypt created a ruckus because Prime Minister Singh was accused at home of “de-linking” terrorism from other issues in the dialogue with Pakistan and because of a reference to Baluchistan in the joint statement. But he was hardly “soft” saying, “[a] composite dialogue cannot begin unless and until the terrorist attacks that shook Mumbai are accounted for and the perpetrators of these heinous crimes brought to book. The starting point of any meaningful dialogue with Pakistan has to have their commitment not to let their territory be used for terrorist activities against India. If acts of terrorism continue to be perpetrated, there is no question of a dialogue, let alone a composite dialogue.” It was only in October, following several Pakistani actions related to the Mumbai terrorist attacks, that Singh offered to pull back some troops from Kashmir and resume dialogue with Pakistan, saying, “I appeal to the Government of Pakistan to carry forward the hand of friendship that we have extended. This is in the interest of the people of India and Pakistan.”

Nevertheless, from the stand point of US-India relations, there remains a gap in assessment between New Delhi and Washington of how serious Pakistan is about its commitment to constrain India-directed (vice Al-Qaeda or internal Pakistani) terrorism; a gap that extends to the vexing issue of US-India relations related to Afghanistan-Pakistan. On the other hand, and notwithstanding a small stir created by Under Secretary of State William Burns’ comments during a visit to India that the “wishes” of the Kashmiris should be considered – a longtime staple of US policy, the US and Indian governments publicly and largely successfully deflected observations, especially within India, that the US was pressing India to make some concessions regarding Kashmir to relieve pressure on Pakistan’s eastern flank. During Special Envoy Richard Holbrooke’s visit to India in April to brief the newly announced AfPak strategy 1.0, he was quoted as saying that “We did not come here to ask the Indians to do anything. We came here to inform them about our trip, as we always do, and to get their views.”

A second element of US-India interaction during the year was the situation in AfPak; a situation that, of course, is affected by spillover from the troubled India-Pakistan relationship and the wider issue of terrorism and vice-versa. Washington went out of its way to praise India’s role in Afghanistan – Holbrooke referring for example to the “impressive foreign assistance in Afghanistan by India.” But there were also differences. Indians remained doubtful that the US would really pressure Pakistan to stop making a distinction between Kashmir-oriented and Afghanistan-oriented militants – the former being granted considerable leeway by Islamabad’s security and intelligence agencies. Indeed, the gap persists between Washington and New Delhi about the overall characterization of terrorism in the region with India seeing various elements of the Taliban, Al-Qaeda, and anti-India groups as part of a connected continuum whereas most US assessments draw many more distinctions. This difference is further complicated by Washington’s assertions that the US, India, and Pakistan face, in the words of Holbrooke, a “common threat.” To many Indians, this is unconvincing. As former Indian ambassador to the US Naresh Chandra explained in April, “This equating Pakistan as a pure victim – we don’t buy that. Let bygones be bygones is O.K. for the United States. Not for us. Until Pakistan has shown credible action, how can he expect India to toe this line? They have to dismantle their terror infrastructure, bring perpetrators of the Bombay attack to book.”

But in fact, in the post-Mumbai context, the US has paid much more attention to Lashkar-e-Taiba and similar Pakistan-based groups that specialize in anti-Indian attacks – not least because these groups are now implicated in attacks against US citizens and wider terrorism connections. Even more fundamentally regarding Afpak, Indians do not share the official view of the US that Pakistan is a credible partner in defeating the Taliban or other extremists. Former Indian Ambassador to Pakistan G. Parthasarthy contends that “[t]he [Pakistani] army has neither the will nor the desire to take on the Taliban and extremists with whom they have been associated for the past three decades.”

On the defense cooperation front, a bright spot in bilateral relations, progress continued. At the start of the year, it was announced that India had entered into agreement with Boeing for eight Boeing P-81 long-range maritime reconnaissance (LRMR) aircraft for the navy; a contract reportedly valued at $2.1 billion. According to press reports, India would have the option to buy eight more aircraft in the future. Meanwhile, countering press reports that the US was going to sell ballistic missile defense technology to India, a US Defense Department spokesperson said only that “very rudimentary” consultations will continue, including Indian observation of some tests. During Secretary of State Clinton’s July visit, the completion of an agreement on end-use monitoring for U.S. defense articles was announced. The agreement will permit the US to ensure India uses arms it purchases from the US for their intended purposes, and that India does not allow others to obtain the technology.

The economic relationship during the year was mixed. India and the US remained in static positions on the Doha round of global trade negotiations. Peter Mandelson, former EU trade commissioner, described the stalemate this way: “India believes that large agricultural exporters like the U.S. are asking for more new market access than their subsistence farmers can bear. The U.S. continues to argue that what India is offering its farmers and manufacturers won’t give them enough access to foreign markets to justify commitments to reform its farm-subsidy system, or cuts to the few high tariffs it retains on industrial goods. Deadlock after deadlock has eroded trust between some of the key negotiators, especially the U.S. and India.” Despite this difference however, given the Obama administration’s own slow uptake on trade, Doha differences were not “front and center” in the economic relationship – or in the overall bilateral relationship. But there were bilateral problems. In May 2009, India began a study on the barriers its exporters face in the US, reportedly part of a response to a US investigation into Indian trade hurdles by the US International Trade Commission at the request of the Senate Finance Committee. In February, India’s commerce secretary said that “We are collating information from various industries to prepare a list of American nontariff barriers to Indian exports. There are many subtle, sophisticated ways in which America stalls our exports. For too long, the developed countries lectured us on what we are doing wrong on trade. But this is a game that India can play, too.” The Obama administration’s (and Congress’) concerns about certain tax provisions that make it easier to “create a job in Bangalore, India, than if you create one in Buffalo, New York” (as President Obama put it) and moves to limit temporary skilled worker permits and visas, often used by Indian software professionals to work on-site in America, also created irritations in the bilateral economic relationship.

There was no major progress on the implementation of the US-India civil nuclear deal. A 60-member strong US delegation visited India to assess commercial nuclear opportunities in mid-January. Unlike Russian and European firms, whose governments guarantee their liability in case of an industrial accident, US firms do not have such coverage and therefore want India to sign a global convention on liability and compensation that limits the onus on private nuclear operators and suppliers in the event of an industrial accident. Politics within India make this difficult because of a desire not to minimize responsibility for private companies (not least because memories of the Bhopal accident linger). One step forward during the year was India’s assigning of sites where future US nuclear power plants could be built. (Sites were also identified for France and Russia). Still, other steps remain to be taken including the granting of licenses to US companies to engage in sensitive technical discussions about their products with Indian companies and “nonproliferation assurances” from India that US technologies would not be transferred to any parties other than the original importer, including subcontractors.

Meanwhile, matters were sticky on broader nuclear nonproliferation matters. For example, the L’Aquila Group of Eight Meeting in July issued a statement on nonproliferation that Indians interpreted as undermining the agreement for civil nuclear cooperation it had reached with the US and the Nuclear Suppliers Group (NSG) at the end of 2008. So serious was the issue taken in India that no less than Prime Minister Singh, in replying to number of concerns raised by domestic critics in the Parliament, and as part of a long intervention about the L’Aquila statement and other matters, asserted that “So, my understanding of this area is that there is no consensus in the Nuclear Suppliers Group to debar India from access to reprocessing and enrichment technology.”

There were also raised eyebrows in India when an Obama administration-inspired United Nations Security Council resolution in October called for India to sign the NPT as non-nuclear weapons state (NNWS). This occurred just after a leading Indian nuclear scientist called into question the efficacy of India’s 1998 nuclear tests and called for more tests. India’s national security adviser, M.K. Narayanan, dismissed the scientist’s statements as “horrific” and said researchers have verified the nation’s thermonuclear capabilities.

In this context, India is also extremely concerned about the Obama administration’s push to get a Comprehensive Test Ban Treaty (CTBT) into place. In the joint statement issued at the conclusion of Secretary Clinton’s July 2009 visit to India there was not even a reference to the CTBT in the section on nonproliferation. In the joint statement issued by President Obama and Prime Minister Singh in November, it was clear that the CTBT was not a subject of common pursuit. According to the language of the statement “India reaffirmed its unilateral and voluntary moratorium on nuclear explosive testing. The United States reaffirmed its testing moratorium and its commitment to ratify the Comprehensive Test Ban Treaty and bring it into force at an early date. Both leaders agreed to consult each other regularly and seek the early start of negotiations on a multilateral, non-discriminatory, and internationally verifiable Fissile Material Cutoff Treaty at the Conference on Disarmament.” The bottom-line is that India and the US will work together on the FMCT, but not the CTBT the latter being a matter of continued disagreement. This gives some fillip to the concern that India might again test nuclear weapons if it appears that the CTBT will go into effect.

As for climate change, long-running US-India differences came to a head during Secretary Clinton’s visit. Indian Environment Minister Jairam Ramesh is reported to have told Clinton that “[t]here is simply no case for the pressure that we, who have among the lowest emissions per capita, face to actually reduce emissions. And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours.” Clinton countered by saying that “No one wants to in any way stall or undermine the economic growth that is necessary to lift millions more out of poverty. We also believe that there is a way to eradicate poverty and develop sustainability that will lower significantly the carbon footprint.” India continued to reject any calls for legally binding emissions reduction targets, although in December just before the start of the Copenhagen conference on climate change New Delhi announced that it would reduce the “intensity” of its emissions. The details of such a plan remain uncertain.

One final note relates to India-Iran relations, which have created some differences in US-India relations. India voted in favor of a Nov. 26 UN Resolution on Iran – basically critical of Iran following completion of an IAEA report that raises questions about Iran’s nuclear activities. India felt compelled to explain the vote in detail, primarily on the grounds that “[t]he Agency’s safeguards system is the bedrock of the international community’s confidence that peaceful uses of nuclear energy and non-proliferation objectives can be pursued in a balanced manner. The integrity of this system should be preserved [and] The conclusions he has drawn in his report are therefore difficult to ignore.” Nevertheless, the Indian statement on its vote stated that: “As such we do not believe that the adoption of this resolution should divert the parties away from dialogue. This resolution cannot be the basis of a renewed punitive approach or new sanctions. In fact, the coming weeks should be used by all concerned to expand the diplomatic space to satisfactorily address all outstanding issues. India firmly supports keeping the door open for dialogue and avoidance of confrontation.”

India-East Asia relations: “Hindi-Chini blah blah”

India-East Asia relations during 2009 were dominated by Sino-Indian tensions. Before turning to Sino-India relations, however, it would be useful to review some of the broader developments.

India-Burma relations continued on their more interactive and cooperative course, with Indian Vice President Hamid Ansari, accompanied by Minister of State for Defense Shri Pallam Raju, three members of Parliament and a large business delegation, visiting Myanmar at the invitation of Vice Senior Gen. H.E. Maung Aye in early February.  Negotiations with the Republic of Korea were held in June on a bilateral Comprehensive Economic Partnership Agreement during the visit of Minister of Foreign Affairs and Trade Yu Myung-hwan to India. The conclusion of the agreement was reached at the end of the year.  India-Australia relations remained engaged but troubled by tensions over a number of attacks on Indian students in Australia. In August, India’s External Affairs Minister S.M. Krishna visited the country to, in the words of India’s External Affairs Ministry, “hear first-hand, about the problems being faced by Indian students and will discuss the matter of their safety and security with the State leadership. EAM will also apprise himself of the measures put in place, in this regard, by the Australian law enforcement agencies.” Krishna also used the trip to participate in the Annual Post Forum Dialogue Meeting (Aug. 7) of the Pacific Island Forum (PIF), in Cairns. India has been a dialogue partner of the PIF, comprising 16 countries, since 2002 and has attended all its meetings. In November, Australian Prime Minister Kevin Rudd visited New Delhi. Apart from the student issue, India and Australia have a range of differences on issues such as nonproliferation, climate change, and uranium sales.

Another noteworthy event during the year was the official signing, on Oct. 13, of an India-ASEAN free trade agreement (FTA) in goods on the sidelines of the Bangkok ASEAN summit. As discussed in last year’s summary, the India-ASEAN negotiations were a long-drawn out effort for both sides and agreement (though not official signature) was reached at the end of 2008. The India-ASEAN FTA builds on the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India signed in Bali, Indonesia in October 2003. While trade negotiations move slow, actual trade moves faster and India-ASEAN trading links continue to increase.

India-Japan relations received no high-level attention until the very end of the year when Prime Minister Hatoyama Yukio made a brief 36-hour visit to India. Indians had been contemplating what the Democratic Party of Japan’s victory would mean for the bilateral relationship that had received considerable attention during the earlier premierships of Abe Shinzo and Aso Taro. In the event, there were no ground-breaking departures during Hatoyama’s visit. Tokyo asked New Delhi to support the CTBT; India responded by affirming its voluntary moratorium on nuclear tests. Japan extended support to a planned Delhi-Mumbai industrial corridor project. Japan is already the major funder of the Delhi metro expansion. The two countries agreed to regularize bilateral discussions on both the Foreign Ministry and defense tracks. Overall, the significance of this visit is that it occurred, emphasizing that India remains on Japan’s radar screen even under the new political leadership in Tokyo.

China-Indian relations seemed to be a series of troubles during 2009. In March, there was a spat over toys, tires, and iron ore with India pursuing antidumping cases against China at the World Trade Organization (WTO). Indian Commerce Secretary Gopal K. Pillai told an interviewer that “We’ve always said the world is large enough for India and China, but we have a problem with a surge in exports that hurts Indian industry. It’s a cause for worry.” But both governments sought to minimize the fallout by setting up a working group that would meet every few months on trade issues before they reach the WTO.

Much more serious was a move by China in March to block a $2.9 billion loan to India at the Asian Development Bank allegedly because it would fund a $60 million flood-management program in Arunachal Pradesh – an Indian-administered state that China views as contested territory. The loan was eventually approved, reportedly with support from the US and others.

In June, tensions really picked up following comments by the governor of Arunachal Pradesh, J.J. Singh, former head of the Indian army, who stated that India would deploy two new Army divisions to the region. The regularly scheduled 13th round of the talks between the special representatives of India and China on the long-pending border dispute was held in New Delhi on Aug. 7-8, with no concrete results regarding the border. The two countries did agree to set up a hotline – a suggestion reportedly made by President Hu Jintao when he met Prime Minister Singh during the SCO summit at Yekaterinburg, Russia on June 15, 2009. Though the two governments exercised restraint, Indian and Chinese media seem to have inflamed tensions with their reporting and choices of words. But government actions on both sides also came in for criticism. India allowed the Dalai Lama to travel to Tawang. And in October, the Chinese Embassy in New Delhi issued visas on a separate sheet of paper to Indian citizens born and resident in Jammu & Kashmir (J&K). But what caused a really major outcry in India was China’s criticism of Prime Minister Singh’s visit to Arunachal Pradesh for an election rally on Oct. 3. According to a statement posted on the Chinese Foreign Ministry’s website, “China is strongly dissatisfied with the visit to the disputed region by the Indian leader disregarding China’s serious concerns. “We demand the Indian side address China’s serious and just concerns and not trigger disturbances in the disputed region so as to facilitate the healthy development of China-India relations.”

Looking ahead

All in all, unlike 2008 when the US-India civilian nuclear deal was concluded and terrorists attacked Mumbai, 2009 was a relatively undramatic period in US-India and India-East Asia relations. Despite two high-profile visits  between the US and India, one cannot but help having the feeling that bilateral relations are drifting or at least taking a pause from the dynamism of the Bush administration years. This may not be a bad thing as it allows both countries to consolidate gains in successful areas such as defense ties and society-to-society links in education, agriculture, and space. But on so many big issues such as AfPak, terrorism, climate change, nonproliferation, and the Doha round of talks on trade, there is much distance to be travelled between Washington and New Delhi. India-East Asia relations remained on their fitful, meandering, and slow-paced course, with the exception of China-Indian relations which too quickly moved in a negative direction.

In the coming year, the single biggest challenge for the US and India will be to manage their differences regarding Pakistan, terrorism, and Afpak while continuing efforts to complete the details of their civilian nuclear cooperation deal. But if Doha talks are re-opened, and as climate change talks and President Obama’s priorities on disarmament and nonproliferation move ahead, the two countries could encounter turbulence. India and China will manage their border dispute – not least because they have to. Trade ties between the two powers will push ahead, but not without frictions and mutual suspicions. India’s ties with other countries in East Asia will persist, but it is difficult to see any new major Indian initiatives to thicken and sustain its ties to wider region. One interesting element to watch for is whether the new Japanese government will pick up on ties with India where the Liberal Democratic Party left off. With the Democratic Party of Japan government’s focus on relations with its northeast Asian neighbors, it seems unlikely that India will be a major focus. Also, were there to be a new conservative government in Canberra, it is possible that the issue of uranium sales to India could revive. Stay tuned.