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India politics: Bush's Indian agenda
[February 27, 2006]

India politics: Bush's Indian agenda


(EIU Viewswire Via Thomson Dialog NewsEdge)COUNTRY BRIEFING

FROM THE ECONOMIST INTELLIGENCE UNIT

After five years in the White House the US president, George W Bush, is making his first official trip to India. Mr Bush will be hoping to build the foundations of a new strategic alliance during his visit, principally by sealing a controversial agreement to provide India with technological assistance for its nuclear programmes. But the difficulties in arranging the terms of this dealwhich might yet be abandonedreveal that although India and the US have common strategic interests, mutual suspicion remains of the extent to which these overlap.

Since India's prime minister, Manmohan Singh, visited Washington in July last year, Mr Bush has referred to India on several occasions as a "natural partner" for the US. The fact that India is the world's largest democracy, with a booming economy, a large and moderate Muslim population, and proximity to two areas vital to US strategic interests (China and the Middle East) seems to support this assertion. India and the US also share interests in reinforcing energy security, promoting democracy, limiting the spread of Islamist terrorism and preventing the domination of Asia by a single power (namely China, although diplomats on each side have been careful to avoid mentioning "containment").

Nevertheless, bilateral relations have historically not been close, owing in the first instance to India's ostensibly "non-aligned" foreign policy during the cold war, and in the second to its refusal to join the international nuclear non-proliferation regime, the enforcement of which has long been a core principle of US foreign policy. However, the US has indicated that the latter is no longer necessarily a barrier to developing better ties. During Mr Singh's trip to Washington last year, Mr Bush outlined a deal in which the US would provide "full civil nuclear-energy co-operation" to India, on certain conditions.


The groundbreaking nature of this pledge demonstrates the high priority the Bush administration has accorded the development of better relations with India. For one thing, it contravenes existing US (and international) law that prohibits the provision of nuclear technology to countries that have not signed the Nuclear Non-Proliferation Treaty (NPT). India refused to do so and developed its own nuclear arsenal, last testing nuclear weapons in 1998. Mr Bush's offer, in effect to grant India quasi-official nuclear-nation status, is a considerable incentive for India to align itself with US interests.

The deal has its critics, however. In the US, some members of Congress (which must eventually vote on the issue) have complained that it creates dangerous exceptions in the NPT regime that may undercut US efforts to restrict the proliferation of nuclear technology to regimes such as Iran and North Korea. Partly to deflect these complaints, the Bush administration has pointed to the conditions the deal imposes on India, such as a moratorium on further nuclear-weapons testing, the separation of its civilian and military nuclear programmes, and the thorough inspection of the latter by the International Atomic Energy Agency (IAEA). The director of the IAEA, Mohammed ElBaradei, has come out in support of the plan because these conditions finally bring India into the non-proliferation community, albeit under its own terms.

However, the severity of these conditions is precisely what has angered Indian critics of the deal, who complain that intrusive inspections and the separation of civilian and military programmes would jeopardise national security. (For example, if India's most advanced reactors are designated for civilian use and are then subject to IAEA surveillance, limits would be placed on the production of sufficient fissile material to expand its stockpile of nuclear warheads if necessary.) As a result, the first proposal India made for the separation of its civilian and military nuclear programmes was rejected by the US as lacking credibility. Nicholas Burns, the US undersecretary of state, has been in India for several days trying to hammer out the terms of a credible deal before Mr Bush's arrival. But even if the two leaders agree, there are serious doubts about whether Congress or India's parliament would approve the deal.

Natural partners?

The technicalities of the nuclear issue are not the only thing raising concerns on each side. Before providing India with nuclear assistance, the US will want to be certain that India is going to support its strategic goals, such as the containment of the nuclear threat posed by Iran. India's existing interests in securing energy supplies from Iran make this far from certain. A plan to pipe gas from Iran to India via Pakistan has particularly worried US policymakers. Mr Singh acted to allay their concerns to some extent by removing the high-profile and independent-minded petroleum minister, Mani Shankar Aiyar, from his position in a reshuffle in January: the pipeline was central to Mr Aiyar's energy policy. But this in turn has raised further suspicions within India about Mr Singh's willingness to align his economic and foreign policy more closely with US interests.

Communist parties nominally supportive of Mr Singh's United Progressive Alliance coalition were enraged by the government's decision last September to vote in favour of an IAEA resolution to refer Iran to the UN Security Council (after a "last chance"), seeing it as a transparent quid pro quo for the nuclear-assistance pledge Mr Bush had made in July. Although Mr Singh claimed the decision was made independently, it did not help his cause when the US ambassador to India, David Mulford, said in an interview in January that if India were to change its stance on Iran the nuclear deal would be off.

To some extent the leftists' objections to targeting Iran are politically opportunist: elections are due soon in the Communist strongholds of Kerala and West Bengal, each of which have large numbers of Muslim voters. But opponents of Mr Singh's pro-US stance have broader geopolitical concerns, lamenting the apparent ditching of non-alignment, hitherto a powerful symbol of India's independence. Some have also warned against becoming a minor partner in an alliance with the US, particularly if such a role damages India's owncurrently improvingrelations with China.

The issue of the US's relationship with Pakistan (which Mr Bush also intends to visit on this trip) is a perennial problem too. The US's closeness to Pakistan has traditionally impeded the development of better ties with India. In the years since the terrorist attacks of September 2001, the US's reliance on Pakistan to support its campaigns against the Taliban and al-Qaida in Afghanistan have underlined this trend. However, the improvement in India-Pakistan relations in recent years makes Mr Bush's position less awkwardespecially as he can use the offer of nuclear assistance to India to trump its complaints about US military support to Pakistan in recent years.

The other side of the coin is that in seeking to move closer to India, the US risks upsetting an ally whose support is still indispensable in the short term. The offer of nuclear assistance to India is sure to raise the hackles of the Pakistani government, particularly as the president, General Pervez Musharraf, already faces considerable opposition to his policy of co-operation with the US in its "war on terror". Owing to its poor proliferation record and undemocratic military rule, Pakistan can never expect to be offered a similar deal. Moreover, with robust US support, India might feel less inclined to make compromises over the crucial issue of Kashmirwhich would undermine the fragile peace process and contribute to domestic opposition to General Musharraf's policies.

Small steps

These issues suggest that it might be premature to see the US and India forging a groundbreaking strategic alliance, even if during Mr Bush's trip he does secure agreement on the controversial nuclear issue. Conversely, even without agreement on this, there will be plenty of opportunity for Mr Bush and Mr Singh to play up the benefits to both sides of a closer partnership, particularly in the sphere of economic co-operation.

US companies are taking advantage of Indian expertise and the well-educated (and English-speaking) workforce by outsourcing jobs, while a 30% rise in US exports to India last year illustrates that US exporters are also cashing in on the increasing affluence of India's middle classes. But there are still manifold complaints on this front, including the strict constraints India still imposes on foreign investment in many sectors, and its slow progress on other aspects of economic liberalisation. Even without a breakthrough on a broader strategic partnership, Mr Bush will still be able to claim a successful trip if there is some progress on these issues.

SOURCE: ViewsWire Asia

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