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Friends or Allies?
Indian Prime Minister Narendra Modi (R) and US President Barack Obama walk prior to meetings at Hyderabad House in New Delhi, India, January 25, 2015. (SAUL LOEB/AFP/Getty Images)

Friends or Allies?

Aparna Pande

The primary purpose of US President Barack Obama’s visit to India is to advance the notion of a strategic partnership between the two countries. This is an idea that Washington has sought off and on since the 1950s but has failed to materialize partly because of India’s preference for non-alignment in international relations. Just as the Americans tend to seek allies overseas, India builds friendships and avoids alliances. An alliance implies dependence whereas economic and military self-sufficiency is India’s desire.

January 26 or India’s Republic day commemorates the day the Indian National Congress declared as their goal complete independence (Purna Swaraj) from British colonial rule. Unlike other former British colonies, India was not content simply with being a dominion within the Commonwealth. Indians wanted to be a Republic, which India became in 1949, within two years of the British departure from the subcontinent.

Even though Indians and Americans share a commitment to democracy, federalism and their republics, they have rarely seen eye to eye in the realm of foreign policy. Obama’s second visit to India comes less than six months after the Washington visit of India’s Prime Minister Narendra Modi. The frequency and intensity of high-level contacts reflect a growing desire for deeper US-India ties. However, the two countries still remain separated by their respective definitions of a strategic relationship.

For the United States, a strategic relationship is one in which defense and economic ties are paramount. The US is closest to those countries with which it has a deep economic-defense partnership: Europe’s NATO members, Japan, South Korea, Australia, Canada and Israel. With these allies, the US maintains ties not only at different layers of government but also between the legislatures, academia, think tanks and corporations. Hence these relationships remain by and large unaffected by tenures of individuals in office or by short-term goals of administrations. The economic and military exchanges between the US and its allies create interest groups, especially in Washington, but also in the private sector that deem the foreign relationship critical.

India’s nonaligned foreign policy and its aversion to military alliances has come in the way of tie-ups between India and the US that are similar to those between the US and, say, Israel, South Korea or Japan. Over the last six decades, while India accepted economic as well as some military aid from the US, it did not pursue the sort of defense ties that result from buying US military equipment on concessional terms or integrating the training of officers.

The pursuit of independence and self-sufficiency led India to purchase arms from a variety of sources and send its officers to train with the forces of several countries, including the US and the Soviet Union at the same time during the cold war. American generals and defense suppliers had closer ties for years with Pakistan than they did with India because Islamabad claimed to be Washington’s ally while Delhi abjured an exclusive alliance relationship.

The end of the cold war changed this relationship for both countries. In 1995 India and the US agreed to set up a Defense Policy Group (DPG) and Joint Technical Group (JTG). A decade later in 2005 they signed a ‘New Framework for the US-India Defense Relationship’ that established a new subgroup on Defense Procurement and Production. During Obama’s visit, India and the US are supposed to sign a new 10-year defense framework agreement. But India will still be different from US allies that buy US defense equipment without insisting on learning how to make it on their own.

For many Americans India is seen as a counterpoise to China, which is clearly a rising military power in addition to being an economic giant. But the US has been slow to appreciate Indian concerns in relation to Pakistan-linked terrorism, which does not enhance Indian trust in a receding superpower seen widely as fickle, at least in India’s backyard.

The slow pace of India’s economic reforms have undermined its capacity to compete with China. Still, India is the world’s top importer of major arms, accounting for 14% of global arms imports. Over 70% of India’s defense equipment needs are currently met through imports. From 2009 to 2013, Russia accounted for 75% of Indian arms imports whereas 7% came from the US and 6% from Israel. In 2014, Indian defense procurements from the US were worth about $15 billion.

Most US defense sales to India are through the government-to-government or FMS (foreign military sales) route rather than through DCS (direct commercial sales). In late 2012, cumulative FMS sales to India were valued at over $8 billion. In 2015, India is expected to complete several large defense purchases from US companies: over $1 billion for Sikorsky Aircraft’s S-70B Hawk helicopters, and over $2.5 billion in orders for Boeing’s AH-64D Apache and CH-47 Chinook helicopters. But from America’s point of view this is only a small proportion of the estimated $250 billion India is expected to spend on military acquisitions over the next five years.

India’s private sector was allowed to enter the defense market in 2001. As of 2013, however, the Indian private sector has a share of only 6% in the country’s defense spending with the public sector defense enterprises and major foreign companies continuing to play a key role.

In an attempt to incentivize corporate participation the government raised the cap on foreign investment in the defense sector from 26% to 49% and also removed the strenuous license requirements on 60% of defense products for private manufacturing companies. At the Vibrant Gujarat summit Mr Modi also pledged “to cut red tape, pursue predictable policies, ensure stable taxes and make India the ‘easiest place’ to do business.” Presumably, this would apply to the defense sector as much to other areas of the economy.

India-US bilateral trade ties stand at around $100 billion in goods and services. The two countries seek to boost this to as much as $500 billion. Secretary of State John Kerry expressed hope that “Together, we can create an environment where all of our companies play leading roles in bringing cutting-edge technologies, equipment, capital, and know-how not just to India but to countless countries that need this growth and development now.”

It is unlikely this goal will materialize without expanded Indian purchase of US military technology and enhanced defense cooperation. Obama and Modi have to overcome traditional modes of thinking in the defense establishments of their respective countries to make that happen. The US will have to accept the fact that India will not be a formal ally like some of its other partners; India will have to recognize that acquiring state-of-the-art US military technologies comes at a price.

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