High-profile visits and meetings characterized Indian relations with both the United States and East Asia in 2010. While there were no major “breakthroughs” or departures as a result, the ongoing evolution of both US-India and India-East Asia relations suggests that they are now a fixed part of the US-Asia dynamic. It is worth noting that while Secretary of State Hillary Clinton neither visited India during her first trip to Asia in February 2009 (she did visit India in July 2009) nor made mention of India in her pre-departure address on US Asia policy, in November 2010 President Obama opened his speech to the joint session of India’s Parliament by declaring that “[i]t’s no coincidence that India is my first stop on a visit to Asia…” And the joint statement between the two countries issued during that visit specifically noted a “shared vision for peace, stability and prosperity in Asia, the Indian Ocean region and the Pacific region…[and] agreed “to deepen existing regular strategic consultations on developments in East Asia…” Indeed, including India at all in an Asia itinerary is a recent innovation in US foreign policy and one that speaks to a larger US policy debate about the evolving Asia-Pacific.  Whether such an innovation sticks remains to be seen, although many indications suggest that it will; especially as the need to coordinate increases on matters such as the East Asian Summit, maritime cooperation across the “Indo-Pacific,” and wider global issues.

United States-India relations in 2010

US-India relations during 2010 exhibited considerably warmer atmospherics than during 2009. There were of course several ministerial/secretary-level visits (most prominent were those of Secretary of Defense Robert Gates in January and Secretary of the Treasury Timothy Geithner in April to launch the US-India Economic and Financial Partnership). But the real story of the year was the fact that President Barack Obama and Prime Minister Manmohan Singh met four times in 2010 – in April at the Nuclear Security Summit in Washington, in June at the G20 Summit in Toronto, very briefly in September at UN General Assembly in New York, and most prominently during the state visit to India toward the end of the year). Obama’s November 2010 trip to Mumbai and New Delhi occurred without mishap (unlike Singh’s to Washington the previous year when uninvited guests crashed the White House dinner) and was warmly received in India because the president began the trip by paying respect to victims of the Mumbai terrorist attacks, visiting the home of Mahatma Gandhi, and celebrating Diwali at St. Xavier’s School in Mumbai where the president and first lady danced with school children. Obama also held a town hall meeting in Mumbai and delivered an address to a joint session of India’s Parliament in New Delhi. Indeed, in the context of the president’s November 2010 Asia tour, the India segment was prominent for being the starting point, the longest bilateral visit (the president’s trip to Indonesia lasted less than 24 hours), and focused because it was not linked to multilateral business – as were the trips to Seoul for the G20, and to Yokohama for the Asia-Pacific Economic Cooperation (APEC) meeting. President Obama played to the Indian Parliament by pointing out that his trip was the longest of any of his foreign trips during his presidency and occurred early in it (perhaps this was to remind Indian parliamentarians longing for the alleged good ‘ole days of the George W. Bush presidency since he visited in 2006 – toward the end of his presidency).

In terms of substance, there were important developments, though as usual the fine print and the unmentioned suggested that much work remains to be done even in areas where there is commitment to move ahead. For example, an area that received considerable positive commentary during the year related to high-technology export controls – specifically their reduction in the case of India. Indeed, Prime Minister Singh, in his joint press appearance with President Obama, led off with this issue, saying “[w]e welcome the decision by the United States to lift controls on export of high technology items and technologies to India, and support India’s membership in multilateral export control regimes such as the Nuclear Suppliers Group.” The joint statement at the end of the visit expressed more nuanced elements of this issue. For example, it referred specifically to “removing Indian entities from the US Department of Commerce’s ‘Entity List’ and realignment of India in US export control regulations” rather than the more general “lift controls.” As for India’s membership in multilateral export control regimes, the joint statement says that the US “intends to support” such membership “in a phased manner, and to consult with regime members to encourage the evolution of regime membership criteria, consistent with maintaining the core principles of these regimes, as the Government of India takes steps towards the full adoption of the regimes’ export control requirements to reflect its prospective membership, with both processes moving forward together.” Even where India appears eligible for membership in multilateral regimes now (e.g., the Australia Group and the Wassenaar Agreement), India “should qualify” only “once it imposes export controls over all items on these regimes’ control lists. In other words, there are a number of steps to take before there will be a full and flowing high-technology trade relationship between the US and India, though clearly steps are being taken to move the prospect forward.

Similarly, on another hot-button issue – that of a permanent United Nations Security Council seat for India – which was hailed as a success in the bilateral relationship, only the easiest step has been taken. President Obama, in his speech to Parliament, not only welcomed “India as it prepares to take its seat on the United Nations Security Council” as a non-permanent member for a two-year term beginning in 2011, but went on to say that “in the years ahead, I look forward to a reformed United Nations Security Council that includes India as a permanent member.” Given that this has been at the top or very near the top of New Delhi’s “wish list” from Washington, much fanfare (and no doubt some relief) ensued in India. But a “reformed United Nations” is a long way off, as the phrase “in the years ahead” suggests. Still, such a statement by a US president to a joint meeting of the Indian Parliament is an important development. Precisely what role India will play in a reformed UN, whether it will be consistent with US foreign policy interests, and what the US received in return for supporting India’s membership are unclear.

Against these two major issues, other announcements during the year received less attention but are no less notable and perhaps even more significant in terms of the potential for concrete, nearer-term outcomes. One such announcement was the conclusion of an Agreement to Study Seasonal Prediction of Indian Summer Monsoon Rainfall. This agreement apparently will permit sharing of data from US sources that are critical to Indian weather forecasting and hence economic planning; not least because the monsoon can still have a significant effect on India’s annual GDP. Another important new initiative is the launching of a new Homeland Security Dialogue. This is to be carried out between India’s Ministry of Home Affairs and the Department of Homeland Security and focused on “operational cooperation, counter-terrorism technology transfers and capacity building.” There has been a certain degree of commercial excitement in the US about the prospects of sales of homeland security-related technology to India, and it will be worth watching to see if these sales develop significantly and how and whether they are affected by the parallel effort to increase high-technology trade between the two countries.

Differences between India and the US over Afghanistan persisted in 2010 and are intricately linked to perspectives on Pakistan and terrorism. But in 2010 these differences did not get the kind of “play” in the relationship as they did in 2009. In 2009, the Obama administration was in the midst of articulating and implementing a new strategy, components of which worried India. While there has been no major closing of the gap between Indian anxieties about the situation in Afghanistan and US policy, the concerns over differences are now being replaced with a search for what to do next. During President Obama’s visit, it was announced that India and the US would “pursue joint development projects with the Afghan Government in capacity building, agriculture and women’s empowerment.” The real question now is what kind of coordination and/or cooperation there can be between the US and India as developments move toward an “endgame” of sorts in Afghanistan. On Pakistan and terrorism there has been little change with India and the US at considerable odds over approaches and outcomes. The joint statement squarely addressed three issues that have concerned India: terrorism cannot be compartmentalized, Lashkar-e-Taiba is a major threat to both the US and India, and “Pakistan [must] bring to justice the perpetrators of the November 2008 Mumbai attacks.” More existentially, Indians fume at Washington’s military assistance to Pakistan and believe that the US is being duped by Pakistan’s “double game” in Afghanistan. But these differences have not been allowed to be spoilers in US-India relations as the Obama administration has pushed very quietly for resumption of India-Pakistan talks and India and Pakistan held some desultory meetings over the year.

As discussed in last year’s summary, India has been supportive of the US and UN resolutions regarding Iran and continued to be in 2010. In the joint statement the two “leaders reaffirmed their commitment to diplomacy” but also “discussed the need for Iran to take constructive and immediate steps to meet its obligations.” In late December 2010, press reports emerged that India had further tightened strictures on trade with Iran by disallowing Indian companies from using a key trade-finance clearinghouse for facilitating trade. While such a move is noteworthy, Indian and US positions vis-à-vis Iran while they are both in the UN Security Council during 2011-2012 will be worth monitoring.

India-East Asia relations in 2010

India-East Asia relations in 2010 exhibited a wide range of developments; Sino-Indian tensions persisted, but having been especially acute in 2009, did not have the same centrality to India’s East Asia activities. China’s Premier Wen Jiabao was the last major visitor to New Delhi of the year (the four other permanent members of the UN Security Council having visited in the preceding months). Before turning to this last, important India-China engagement, as well as other major India-East Asia bilateral interactions during 2010 it would be useful to cover some broader features of India-East Asia relations.

Among the issues in India’s wider East Asia relationships, further economic integration is a central feature. Despite growing trade, India’s investment and commercial ties with East Asia are not well integrated into regional production and other networks. The Comprehensive Economic Partnership in East Asia (CEPEA) is intended to be a free trade agreement (FTA) comprising the members of the East Asia Summit (EAS), which includes the 10 ASEAN countries plus China, Japan, Korea, India, Australia and New Zealand. If and when such an agreement materializes, India would be included. Indian officials declare that they are “confident that this arrangement will move forward and that CEPEA will become one of the widest trade arrangements in Asia.” Meanwhile, India is building comprehensive economic partnership agreements (CEPA) with key countries in East Asia. Thus far CEPAs have been completed and signed with Singapore and the Republic of Korea and negotiations have been completed with Japan, though a CEPA has not been signed. India has also concluded a Comprehensive Economic Cooperation Agreement with Malaysia and seeks to conclude an ASEAN-India FTA in Services and Investments as a complement to the already completed ASEAN-India FTA in goods. India has officially expressed that this part of the FTA should be concluded by March 2011. How such pursuits square with Prime Minister Singh’s vision of an Asian Economic Community are not yet clear, but a major element of India’s “Look East” policy has always been inclusion in the region’s economic dynamism and integration. This broader economic element of India-East Asia relations should be kept in mind as we turn to an examination of specific bilateral relationships and their activities during 2010.

Meanwhile, India’s outreach to the Asia-Pacific region also includes low-level military-security engagement both at the bilateral and multilateral levels. One example is the Milan biennial meeting of navies from the Indian Ocean region and the Asia-Pacific. Milan 2010 was held over four days in early February and included 12 navies from Australia, Bangladesh, Brunei, Indonesia, Malaysia, Myanmar, New Zealand, Philippines, Singapore, Sri Lanka, Thailand, Vietnam in addition to India. In addition to a seminar on “Navies in Humanitarian Assistance and Disaster Relief (HADR) Operations and some table-top exercises, a brief Passage Exercise (PASSEX) was held at the conclusion.

India-Japan Relations

As discussed in last year’s summary, Japanese Prime Minister Hatoyama Yukio visited India at the end of 2009 (Dec. 27-29). That the visit took place at all was notable because he had just been elected four months prior and nevertheless kept to the previous Liberal Democratic Party (LDP) government’s plan to visit India. It could be said that both the LDP and Democratic Party of Japan (DPJ) now seek to maintain and build ties with India – regardless of party or leadership changes. In 2010, Prime Minister Singh visited Japan in October where he met a new DPJ prime minister, Kan Naoto.  The two sides announced the conclusion of negotiations on the new CEPA. However, it was not actually signed as Indian officials said that the “actual signing will have to await the completion of some formalities on the Japanese side” which they characterized as a “fairly complicated and lengthy process.” Indian officials characterized the CEPA with Japan as the “most comprehensive of all the agreements that we have been able to conclude so far” because it “covers more than 90 percent of the trade and a vast gamut of services, investment, IPR, customs and other trade-related issues.” India-Japan economic ties have been quite limited given the scale of the two economies. Singh, in an address to the Keidanren, while noting that trade had seen a steady expansion, indicated that it would only reach about $20 billion by 2012, which he said to his audience “you will agree with me that India-Japan trade is still at a low threshold, apart from being unbalanced.” In the area of foreign direct investment, Japan’s role has expanded but largely on the basis of mergers and acquisitions rather than major new direct investments. Whether the CEPA will lead to major improvements in trade and investment relationships remains to be seen as it has not yet been signed. Meanwhile, Japan’s overseas development assistance (ODA) for India has remained at a consistently high level. India has been the largest recipient since 2003 for major metro projects in Delhi, Kolkata, Bangalore, and Chennai and the Dedicated Freight Corridor between Delhi and Mumbai.

Little progress appears to have been made on an Agreement on the Peaceful Uses of Nuclear Energy between India and Japan. Though the precise differences between negotiation positions is not known publicly, it is likely that at a minimum Tokyo seeks an Indian commitment not to test as a condition of cooperation and would like to retain the right to automatically terminate the agreement if India does indeed test a nuclear device. New Delhi thus far seems only willing to reiterate its unilateral and voluntary moratorium on nuclear explosive testing. In any event, at the India-Japan summit in October, the joint statement called for “negotiators to arrive at a mutually satisfactory agreement for civil nuclear cooperation at an early date.” This contrasted with the cautious stance prior to arrival in Tokyo when Prime Minister Singh stated in an interview that “[w]e have not laid down any deadline for concluding these negotiations.” At the conclusion of the October visit, a third round of discussions was scheduled for November and as of this writing it is unclear what if any progress toward a final agreement has been made. Another issue that came up in the visit was high-technology exports. In something of a frank statement in his joint press appearance with Prime Minister Kan, Singh called for Japan to “make its export control regulations for such trade easier and predictable.” On defense cooperation, the two countries, which had signed an Action Plan on Security Cooperation in December 2009, agreed that their respective defense ministers would meet annually; this expands on the Action Plan call for “regular meetings between the ministers of defense.” All in all, India and Japan continue to reach out to each other and there has been movement in relations, but the economic dimension in particular remains very weak.

India-Republic of Korea Relations

The highlight of the year in India-Korean relations was the January 2010 state visit of President Lee Myung-bak as India’s chief guest for Republic Day. The two sides, which had signed a “Long-term Cooperative Partnership for Peace and Prosperity” in October 2004, issued a joint statement entitled “Towards a Strategic Partnership.” They also announced the entry into force of the Comprehensive Economic Partnership Agreement (CEPA) on Jan. 1, 2010, the upgrading of the annual Foreign Policy and Security Dialogue to the level of vice minister in the ROK and secretary (East) in India, and a target of $30 billion for bilateral trade. The two leaders also agreed to designate the year 2011 as ‘Year of Korea’ in India and ‘Year of India’ in the ROK. In June, the sixth meeting of the India-ROK Joint Commission was held in Seoul. At the end of 2010, Prime Minister Singh travelled to Seoul to attend the fifth G20 summit where he again met with President Lee. India-ROK ties, while not extensive, have made fairly fast progress over the past several years from what was essentially a “cold start.”

India-Southeast Asia/ASEAN Relations

India-Southeast Asia relations continued to develop during the year. Apart from bilateral visits, which are discussed below, Prime Minister Singh led India’s delegation to the fifth East Asia Summit and the eighth India-ASEAN Summit in October 2010 held in Hanoi. According to Indian officials, an India-ASEAN Trade-in-Goods Agreement became operational on Jan. 1, 2010. While trade has increased between India and some of its ASEAN partners in this first, “operational” year of the agreement, it is not clear how much of these increases can be attributed to the agreement. An assessment of its impact on overall India-ASEAN trade will become clearer in the years ahead. The next steps in the India-ASEAN economic partnerships are plans to complete negotiations on a trade in services and investment agreement. However, it will be recalled that the negotiation of the India-ASEAN FTA in goods was a drawn-out and difficult process. India also announced plans to hold an India-ASEAN Trade Fair and Business Summit in New Delhi in March 2011. An India-ASEAN Plan of Action for 2010-15 was also adopted during the Summit. In his speech to the eighth India-ASEAN Summit, PM Singh spoke of the Plan of Action to implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity for the years 2010-2015 calling it “an ambitious road map and the 82 Action Points reflect the vast potential and desire to develop a multi-faceted India-ASEAN relationship.” Plans were announced for the first India-ASEAN Commemorative Summit in India in 2012. India continues to build, slowly, trade and other commercial ties across Southeast Asia.

India-Malaysia. Prime Minister Singh travelled to Malaysia in October 2010, returning a visit by Malaysia’s Prime Minister Najib Razak at the start of the year – the first by a Malaysian leader in six years. India appeared to attach considerable significance to the two major interactions with Malaysia. In his pre-departure remarks, Singh characterized Najib’s January visit to New Delhi as a “landmark” and emphasized his government desire for a fresh start, expressing India’s “desire for a qualitatively new partnership between the two countries” and “new areas of understanding with Prime Minister Najib…” Such comments are significant because India-Malaysia ties have long been a bit testy. The joint statement at the conclusion of the visit referred to their desire to “imbue greater dynamism” to the relationship. One important announcement was the conclusion of negotiations on a Comprehensive Economic Cooperation Agreement (CECA) to expand bilateral trade and investment and plans to sign the agreement by Jan. 31, 2011 and implement it by July 1, 2011. Malaysia’s bilateral importance to India also bridges its importance to India’s overall relationship with ASEAN because Malaysia will be the ASEAN coordinator for an ASEAN-India FTA on services and investments. The two countries also agreed to establish a Joint Working Group on Counter-Terrorism, but no specifics were provided on the kinds of activities such a mechanism would include (intelligence, fund-raising, etc).

India-Myanmar. India-Myanmar relations continued to develop during the year with a state visit by Senior Gen. Than Shwe in July. India’s Ministry of External Affairs noted that this visit followed a pattern of high-level exchanges over the past few years, including those of Vice Senior Gen. Maung Aye, vice chairman of the State Peace and Development Council of the Union of Myanmar, in April 2008 and India’s Vice President M. Hamid Ansari in February 2009. It is also noteworthy that this state visit followed January 2010 talks in Nay Pyi Taw between the two countries’ home ministers in which, according to an official Indian statement, “important decisions [were] taken…” It is difficult to imagine the state visit in July materializing without some sort of mutual agreement at the home ministers’ meeting several months prior. It must be speculated that much of the discussion in January was about cooperation on the insurgencies in the northeast of India. The joint statement at the conclusion of the meeting did not characterize the overall relationship though it was markedly detailed in the range of ongoing and aspirational activities. The bulk of attention appears to have been on cooperation battling insurgents operating in India’s northeast and economic relations, including infrastructure connectivity. Discussions between Myanmar and India on the northeastern insurgency have been ongoing for years and there are signs that some cooperative actions have been taken. Whether a new phase of expanded cooperation against insurgents operating against Indian from Myanmar territory will materialize remains to be seen.

India-Cambodia and India-Laos. Indian President Pratibha Patil visited Cambodia and Laos in mid-September 2010. Cambodia has significance for India’s relations with ASEAN as it was the ASEAN chair when the first India-ASEAN Summit took place in 2002. Cambodia also served as ASEAN’s coordinator for India-ASEAN relations in 2010 and is expected to be the ASEAN chair again in 2012 when a Commemorative India-ASEAN Summit is planned to be held in India. President Patil’s visits were not only symbolic and cultural, but led to the extension of Indian lines of credit to both countries. In India-Laos relations, a 15-member delegation led by Laotian Deputy Prime Minister of Foreign Affairs Thongloun Sisoulith participated in the sixth India-Lao Joint Commission Meeting held in Delhi from Jan. 31 to Feb. 4, 2010.

India-Australia relations

In 2010, there were no major advances in India-Australia relations akin to Prime Minister Kevin Rudd’s November 2009 visit to New Delhi and the signing of a Joint Declaration on Security Cooperation. Several ministerial-level visits were made by both countries during the year. Among the highlights was Foreign Minister Steven Smith’s March visit to New Delhi and Trade Minister Simon Crean’s visit in May. From the Indian side, given the high public visibility of attacks against Indian students in Melbourne, the visits of Vayalar Ravi, minister for overseas Indian affairs and Preneet Kaur, minister of state for external affairs, were important as both focused on Indian communities across Australia and particularly students in Melbourne and Sydney. Also important was the visit of India’s Minister of Power, Sushil Kumar Shinde, in June to participate in the first Australia-India Energy and Minerals Forum.

India-New Zealand relations

Meanwhile, India and New Zealand held two rounds of negotiations on a free trade agreement. The first round was held in Wellington April 7-8, 2010, and the second round was held in New Delhi Aug. 10-13, 2010. India-New Zealand Foreign Office Consultations were held in New Delhi April 29, 2010. The keynote visitor for the year was Rahul Gandhi, a possible future Indian prime minister, who visited New Zealand Feb. 13-19, 2010 as the inaugural Sir Edmund Hillary fellow.

India-China relations: “Sensitivity to each other’s core issues”

Indian and Chinese ministers and leaders had several meetings during 2010, which marks the 60^th anniversary year of the bilateral relationship. The most important visits were those of President Patil to China in late May and Premier Wen Jiabao’s to India in mid-December. As discussed in last year’s summary, Sino-Indian political and diplomatic relations have become increasingly testy while trade ties have continued to expand, but with a large Indian imbalance that has in turn complicated political relations. (Following the Oct. 29 meeting between Prime Minister Singh and Wen Jiabao on the sidelines of the East Asia Summit, National Security Advisor Shiv Shankar Menon stated that Wen indicated that the Chinese side was “very conscious of the trade imbalance and the need to do something. He [also] outlined some of the steps that the Chinese Government has taken to address this issue.”) During Wen’s December visit, several agreements/initiatives were announced, including:

• Establishment of a Strategic Economic Dialogue to “enhance macro-economic policy coordination, to promote exchanges and interactions and join hands to address issues and challenges appearing in the economic development and enhance economic cooperation.”
• A new bilateral trade target of $100 billion in 2015.
• “Measures to promote Indian exports to China with a view to reduce India’s trade deficit.”

Also, six specific agreements/Memorandums of Understanding were signed on a program of cultural exchange, cooperation in green technologies, media exchanges, provision by China to India of hydrological data on the Sutlej River during flood season, cooperation between the Reserve Bank of India and the China Banking Regulatory Commission, and ties between the Export-Import Bank of India and China Development Bank Corporation. Looking at such agreements, one would think it was a good year for Sino-Indian relations! It was not. Public discussions of Sino-Indian rivalry abounded. In reply to a reporter’s question whether India saw “rivalry or confrontation with the growing Chinese power in this region,” Foreign Secretary Nirupam Rao replied that “there is space enough for India and China to grow and to coexist and to work with each other. That is the outlook, as we see it, for the future.”

But such words belied a range of underlying tensions that have not changed very much except in their details over the years. Indians are sore at China’s unwillingness to support its candidacy for a permanent UNSC seat, its support for Pakistan, and the bilateral border and territorial dispute – exacerbated this year by the practice of Chinese officials stapling paper visas into the passports of Indian-controlled Kashmir residents who travelled to China on the grounds that Kashmir is disputed territory. According to press reports, China also objected to the inclusion in a military exchange of an Indian general with responsibility for administering Kashmir. Indian then suspended all military exchanges. Neither the visa nor military exchange issue was entirely resolved during Premier Wen’s visit.

Conclusion

If the US-India relationship is now encompassing wider Asia, simultaneously wider Asia is including India. This trend has been underway for nearly two decades and continues. India now is an accepted part of the East Asia firmament through bilateral ties and membership in regional organizations. If the connection between the US-India relationship and the India-East Asia relationship is to be developed further and sustained, it will require much deeper US-India relations on the one hand, and India-East Asia relations on the other. At present there is a fairly thin level of actual cooperation between the US and India in East Asia. Meanwhile, US-India relations continue to make progress even if that progress at times is slow and halting on a range of issues. And it should be noted that on some issues such as Afghanistan and Pakistan, there will continue to be gaps. Similarly, India-East Asia relations are making steady progress but the depth of these connections remains shallow and with China, troubled.

In 2011, barring any surprises, US-India relations are likely to be focused on the evolving endgame for Afghanistan and implications for US-Pakistan relations. It is difficult to foresee any major new initiatives for the bilateral relationship on either Washington’s or Delhi’s part. Areas to watch relate to maritime cooperation and possible coordination regarding the East Asia Summit. It is possible, too, that in 2011 India might announce major purchases of US defense equipment. In the meantime, the US will be moving forward with its export control reform effort, which will have implications for India. In India-East Asia ties, it will be worth watching to see if the announced March 2011 deadline to complete negotiations on an India-ASEAN FTA on Services and Investments is met.