India and Global Centres of Power - 1 | PSIR Optional for UPSC (Notes) PDF Download

India’s Policy Towards USA

India and the United States: A Complex Relationship

• Since gaining independence, India has had a mixed relationship with the United States.
• During the Cold War, despite sharing some common values, both countries struggled to trust each other.
• The U.S. often focused too much on Pakistan, ignoring important Indian interests. This was a major source of tension.
• Pakistan was a key ally for the U.S. in its Cold War strategy in South Asia and the Gulf region.
• India, on the other hand, was a leader of the Non-Aligned Movement and leaned towards socialism.
• India's economy was closed off, with high tariffs and strict regulations that limited foreign companies, especially American multinationals.
• The U.S. accused India of being too close to the former Soviet Union, viewing India's Non-Aligned policy as unethical given the global threat of communism.
• After the Cold War, U.S.-India relations focused on managing differences in strategic interests.
• Both countries see each other as partners but have different goals: the U.S. wants to maintain its global dominance, while India aims to boost its own power and security.
• India is more of a "revisionist" power, questioning global norms and institutions.
• Despite sticking to its Non-Aligned policy, India has faced challenges from Pakistan and China, which have strained U.S.-India relations.
• China's ambitions in trade and foreign relations have created tensions with both the U.S. and India.
• The competition between the U.S. and China, and between China and India, has actually paved the way for closer U.S.-India cooperation since the end of the Cold War.

Early Years 

• India gained independence during the Cold War, a time when the world was divided into different power blocs.
• After long rejecting military alliances and force in international relations, India chose to remain Non-Aligned.
• This decision helped India unite with other developing nations under the Non-Aligned Movement (NAM), which aimed to give a voice to countries emerging from colonial rule.
• India, along with Egypt, Indonesia, and Yugoslavia, spearheaded NAM.
• This movement resonated with many African and Asian countries gaining independence.
• By staying Non-Aligned, India could build relationships with both superpowers, the US and USSR, and use their support for its development goals.
• Over time, the US became one of India’s most important partners, despite some differences.
• The two countries have been closely linked since India’s independence in 1947.
• The US helped India in various ways, such as setting up the early Indian Institutes of Technology (IIT), supporting its atomic energy program, and aiding in the Green Revolution.
• The relationship has grown beyond just friendship, with strong ties between the two democracies.
• Today, there are about 4 million Indian-Americans in the US, further strengthening this partnership.
• Bilateral trade reached $126 billion in 2017, reflecting the deepening ties.
• India’s relations with its neighbors—Pakistan, China, and the Soviet Union (now Russia)—and US policy towards Asia and Africa have played a significant role in shaping India-US relations.
• The early phase of this relationship can be divided into two parts: the Cold War phase (1947-1991) and the Post-Cold War phase (1991 onwards).

Cold War Phase – 1947-1991

Early Years of Indo-US Relations

• 1956: India and the US were allies on the Suez Canal issue.
• 1959: President Dwight Eisenhower received a warm welcome in India, emphasizing America's interest in India's strength.
• 1962: The US, along with Britain, supported India during the China-India conflict.

Strengthening Ties under Kennedy and Johnson

• John F. Kennedy's presidency marked a period of cordial relations.
• Lyndon Johnson continued this trend by establishing the Tarapur Atomic Plant Station (TAPS) and providing food aid during India's drought in 1966-67.

US Debt Forgiveness and Carter's Goodwill Visit

• In 1973, the US forgave a significant portion of India's foreign debt, a rare act of generosity.
• President Jimmy Carter visited India in 1978, restoring American goodwill and resuming economic aid and nuclear fuel supplies.

Challenges and Divergences

• Despite moments of warmth, the relationship faced challenges due to differing worldviews.
• India's leadership in the Non-Aligned Movement (NAM) and socialist economic planning under leaders like Jawaharlal Nehru created friction.
• Factors contributing to the negative phase included India's recognition of Communist China, Pakistan's closeness to the US, and differing stances on international issues.

Cold War Era Tensions

• India's refusal to support US initiatives, such as the "Uniting for Peace Resolution"
• India's close ties with the USSR and the Indo-Soviet Treaty of 1971.
• India's nuclear program and refusal to sign non-proliferation treaties.
• US refusal to supply nuclear fuel to TAPS and enforcement of the Missile Technology Control Regime (MTCR) against India.
• Relations soured further after the Soviet invasion of Afghanistan in 1979.

End of the Cold War and Shifts in Policy

• Under President Ronald Reagan, tensions increased over issues like the US base in Diego Garcia.
• US policies favored Pakistan and viewed India with suspicion, especially concerning Soviet expansionism.
• The Cold War period was marked by mistrust and suspicion, impacting bilateral relations significantly.

Post-Cold War Phase 1991– Immediate Years

Indo-US relations have evolved significantly since the post-Cold War era, moving beyond the label of "estranged democracies." The two countries have built strong ties based on their shared identity as the oldest and largest democracies in the world.

As governance, education, and awareness have evolved in both nations, the scope of "common values" has expanded, reflecting deeper connections.

The changing international order post-Cold War has also influenced India-US relations, with a focus on balancing global power shifts and maintaining a stable world order.

• In 1990-1991, with the collapse of the Soviet Union, the end of the Cold War, and India's economic liberalization, both countries reevaluated their bilateral relations.

• During Prime Minister Narasimha Rao's tenure, despite challenges, efforts were made to improve bilateral ties.

• Joint Naval exercises in May 1992 and Rao's official visit to the US in May 1994 were key milestones.

• In 1995, following visits by US officials, several agreements were signed, although US trade laws continued to impact India's exports.

• Setbacks occurred over issues like the sale of F-16 aircrafts to Pakistan and disputes over nuclear fuel and technology, such as cryogenic engines and supercomputers.

• India's economic growth and domestic reforms attracted international investors, allowing the country to engage with the world on its own terms.

• This shift positioned India among global powers, showcasing a willingness to take on more international responsibilities and aiming for a permanent seat on the United Nations Security Council (UNSC).

Modest Beginning in Defence Ties

India and the U.S. during the Cold War: A Complex Relationship

• Throughout the Cold War, India and the United States had very different views on security and defense, making it hard for them to work together on these issues.
• There was little economic cooperation and political agreement on international matters, preventing the two countries from forming a strong strategic and defense partnership.
• Despite these differences, there were some efforts to engage during the Cold War. U.S. strategists saw India as a key player in the region and thought Pakistan could be a useful base for U.S. military operations, especially in the Persian Gulf.
• In the 1950s and 1960s, the U.S. was interested in India as a potential counterbalance to Communist China, leading to increased U.S. involvement in South Asia.

Early Defence Relations

• India-U.S. defence relations began in the 1950s with joint military exercises involving the U.S., Britain, and Australia.
• The U.S. sold India military equipment like Sherman tanks, helicopters, and transport aircraft, but these were often of poor quality and not what India needed.

Support during the Sino-Indian War

• During the Sino-Indian War of 1962, the U.S. provided military supplies to India, including arms and communication systems.
• After the war, the U.S. offered significant economic assistance to India to counter Communist influence in the region.

Shift in Defence Cooperation in the 1980s

• In the 1980s, U.S.-India defence cooperation changed, especially after the Soviet invasion of Afghanistan.
• The U.S. offered to sell military hardware to India, and there was increased interest in defence technology transfer.

Memorandum of Understanding (MoU) in 1984

• A key MoU in 1984 allowed for the transfer of civilian and dual-use technologies from the U.S. to India, along with some military assistance.
• India received advanced technologies like supercomputers and aircraft engines, although most were not cutting-edge.

Opening to India

• By the mid-1980s, the Reagan Administration began to promote closer ties with India.
• High-level visits and discussions about improving defence cooperation marked this period.

Post-Nuclear Test Relations

• India's nuclear tests in 1998 led to U.S. sanctions and international pressure for India to sign the NPT.
• However, the Kargil conflict in 1999 shifted U.S. perspectives, with the U.S. viewing Pakistan's actions more critically.

Strengthening Defence Contracts

• Since 2008, India and the U.S. have signed defence contracts worth over $15 billion, a significant increase from previous years.
• Major anticipated sales include advanced naval helicopters and attack helicopters, reflecting deepening defence ties.

Nuclear Relations

• March 2000: India agreed to international monitoring of its nuclear program but refused to give up its nuclear arsenal.
• 2002: Negotiations for the 123 Agreement began, allowing India to pursue peaceful nuclear activities.
• July 18, 2005: The Indo-US nuclear deal, known as the Henry J. Hyde Act, was signed to meet India's energy needs and improve US-India relations.
• 2006: The US-India Peaceful Atomic Cooperation Act was enacted, enabling India to purchase US nuclear materials and reactors.
• 2008: The Nuclear Suppliers Group (NSG) granted India a waiver, leading to agreements with countries like France and Russia for full nuclear cooperation.
• March 2009: The US sold P-8 Poseidon military aircraft to India, marking a significant milestone in defense ties.
• October 8, 2008: The US Congress approved the US-India nuclear deal, which was signed by both countries on October 10, 2008.

NSG Waiver Benefits for India:

• Continuous supply of uranium for reactors.
• Access to advanced reactor technologies.
• Enhanced status in global non-proliferation discussions.

Broader Context: The deal was part of the US's strategy to strengthen ties with India to combat terrorism and counter China's influence in Asia.

UN Security Council Reforms

Recognition of India as a Global Power

• Hillary Clinton, the US Secretary of State, acknowledged India as a "rising global power" and expressed the US commitment to consider India's bid for a permanent seat in the UN Security Council (UNSC).
• President Barack Obama further supported this view in 2010 by stating that the United States looks forward to a reformed UNSC that includes India as a permanent member.
• Despite this support, the US openness to India's permanent membership in the UNSC remains at a declaratory stage, indicating a commitment to the idea but not yet translating into action.

Export Control Regimes

1. On May 11 and 13, 1998, India conducted five underground nuclear tests, ending a 24-year self-imposed ban on such tests. In response, Pakistan claimed to have conducted five tests on May 28 and one on May 30, 1998. These unannounced tests sparked global criticism and hindered US efforts at nuclear nonproliferation in South Asia.
2. In reaction to India's tests on May 13, 1998, President Clinton imposed economic and military sanctions on India under the Arms Export Control Act (AECA). Similar sanctions were applied to Pakistan on May 30, 1998. For India, this meant:
3. Termination of $21 million in economic assistance for FY1998.
4. Postponement of $1.7 billion in loans from International Financial Institutions (IFI) with G-8 support.
5. Prohibition of loans or credit from US banks to the Indian government.
6. Termination of Foreign Military Sales under the AECA.
7. Humanitarian assistance, food, and agricultural commodities were exempt from these sanctions.
8. In early 2002, India successfully tested a 700-kilometer range Agni missile, enhancing its second-strike capability against Pakistan. Later that year, the Indian government approved the formation of a Strategic Nuclear Command (SNC) to oversee the country's nuclear arsenal.
9. In August 1999, India's BJP government published a draft report on the country's nuclear doctrine, emphasizing a no-first-use policy while advocating for a credible nuclear deterrence and retaliatory capability.
10. The US Congress gradually lifted nuclear-related sanctions on India and Pakistan through legislative measures. In October 1999, Congress passed an act allowing the President to waive sanctions imposed after the nuclear tests. President Clinton waived these sanctions for India on October 27, 1999, and President Bush removed the remaining sanctions for both countries on September 22, 2001.
11. Since 1991, India and the US have developed a closer relationship, marked by various treaties and agreements, including the 123-Agreement. High-level visits between the two countries have further strengthened this partnership. President Obama recognized India's emergence as a global leader during his visits to India in 2010 and 2015.
12. The US supported India's membership in multilateral export control regimes and the removal of Indian entities from the US Entity List. India joined the Missile Technology Control Regime (MTCR) in 2016, marking its entry into a multilateral export control regime, although its bid for membership in the Nuclear Suppliers Group (NSG) faced challenges due to China's opposition.
13. India and the US now engage as "strategic partners" across various sectors, including energy, education, military, and geopolitics. The defence partnership, strengthened by agreements and initiatives like the Defence Trade and Technology Initiative (DTTI), has become a cornerstone of US-India relations, fostering technology transfer and co-development of new technologies.

Economic Cooperation

Indo-US Economic Relations: A Timeline of Growth and Cooperation

2000: A New Beginning

• Indo-US economic relations saw a significant improvement post-2000, marked by a Vision for the 21st Century document released by the Indian Prime Minister and the US President.

Trade Growth

• Bilateral trade figures: 1991: $5.91 billion, 2000: $14.35 billion, 2004: $37.1 billion, 2008: $43.4 billion, 2010: $100 billion.
• Despite the growth, trade between India and the US was still modest compared to US-China trade, which reached $500 billion in 2010.

Investment and Cooperation

• India became a lucrative destination for Foreign Direct Investment (FDI) and a major market for US exports and multinational corporations.
• The IT sector emerged as a key area of cooperation, despite challenges related to job outsourcing.

Strengthening Ties (2010 Onwards)

• Economic and Financial Partnership: Launched in April 2010 to enhance cooperation in macroeconomic policy, financial sector, and infrastructure financing.
• Trade Policy Forum: Established in 2005 to promote trade and investment cooperation.
• CEO's Forum: Reconstituted in 2009 to involve the private sector in trade and investment discussions.

Highlighting Contributions

• Indian IT companies contributed $22.5 billion in taxes to the US Treasury between 2011 and 2013 and supported over 411,000 jobs in the US.
• During 2014-15, India’s export of computer services and IT/ITES services was around $146 billion, with exports to the US and Canada accounting for nearly 60%.

Significant Trade Growth

• Bilateral trade of goods and services between India and the US increased by 119% since 2007, reaching $126.2 billion.
• As of 2017, bilateral trade in goods and services accounted for 2% of US world trade, with the US being India’s second-largest export market.

Strategic Partnership

• Both countries view each other as important strategic partners for advancing common regional and global interests.
• Despite challenges, such as differing views on trade balances, the relationship continues to grow, with defense sales and civilian nuclear commerce being significant aspects of bilateral trade.

Narendra Modi Takes Over

• Narendra Modi became Prime Minister of India in 2014, while Barack Obama was the President of the United States.
• Obama viewed India as a big opportunity, particularly in comparison to Pakistan, which he found more problematic.
• His positive perspective on India was influenced by experiences with Manmohan Singh during the global financial crisis.
• The second term of the United Progressive Alliance (UPA) under Singh was very different from the first, leading to a deterioration in US-India relations.
• This frustration for Obama contrasted with the hopes for a closer partnership between the US and India.
• Upon taking office, Modi quickly recognized the deteriorating US-India relations.
• Despite limited experience with Washington, Modi understood the frustration in both countries was a challenge for his goals.
• Modi aimed to revitalize India, counter China's growing power, and increase India's global influence.
• Unlike his predecessors, Modi focused on building personal relationships with foreign leaders.
• He invited Presidents Obama and Trump to India for major national events, aiming to strengthen ties with key political leaders.
• Modi personally welcomed visiting dignitaries at airports to enhance diplomacy.
• He believed that a friendly US leader would benefit India, even if US and Indian interests didn't always align.
• This personalized approach to foreign relations marked a significant shift that worked in India's favor.
• Modi's changes in foreign policy, while seemingly stylistic, led to significant achievements.
• One example is in climate change, where the US and India were crucial in discussions leading to the Paris Agreement.
• Modi made commitments that helped secure the final agreement, moving away from India's traditional stance of Third World posturing.
• Another success is India's cooperation with the US in shaping security in the Indo-Pacific region.
• While the concept gained prominence under Trump, the key agreement was established under Obama.
• Modi played a crucial role in the US–India Joint Strategic Vision for the Asia-Pacific and the Indian Ocean Region.
• This agreement, although presented in mild terms, had significant implications.
• When Narendra Modi became Prime Minister of India in 2014, President Barack Obama had been in office for nearly six years.
• Obama viewed India as a great opportunity for the US, especially in contrast to Pakistan, which he saw as a bigger problem.
• Obama's positive perception of India was influenced by his interactions with Modi's predecessor,Manmohan Singh, during the global financial crisis.
• However, the second term of the United Progressive Alliance (UPA) under Singh was very different from the first, and the expected strengthening of US-India relations did not materialize, surprising many American policymakers.
• Narendra Modi quickly recognized the deterioration of US-India relations when he took office, understanding that the frustration in both countries posed challenges for his goals of revitalizing India, countering Chinese influence, and expanding India’s global role.
• Unlike his predecessors, Modi focused on building personal relationships with foreign leaders, especially US presidents. He invited Presidents Obama and Trump to India for major national events and personally welcomed visiting dignitaries, aiming to strengthen ties with key political leaders.
• Modi believed that having a friendly US president would benefit India, even if US and Indian interests didn't always align. This personalized approach to foreign relations was a significant shift and worked in India's favor.
• Modi's changes in foreign policy, though seemingly stylistic, led to important achievements.
• One example is in climate change, where the US and India played crucial roles in the discussions leading to the Paris Agreement. Modi made significant commitments that helped secure the final agreement, moving away from India's traditional stance.
• Another success is India’s cooperation with the US in shaping security in the Indo-Pacific region. The key agreement between the US and India was established under Obama, with Modi playing a crucial role in the 'US–India Joint Strategic Vision for the Asia-Pacific and the Indian Ocean Region.'
• Despite its mild presentation, this agreement had significant implications for US-India relations and regional security.

Advent of Trump Administration

With the arrival of Donald J. Trump as President, India-U.S. relations have become more unpredictable, especially in the area of strategy. However, despite the uncertainty, the Trump administration is slowly taking clear positions on security and strategic issues in South Asia.

Although it took nearly eight months for the Trump administration to establish a clear policy for South Asia, it has moved away from some traditional U.S. foreign policy ideas, reflecting the changed security situation and new threat perceptions in the region.

• Stronger Stance Against Pakistan: The Trump administration has taken a tougher approach towards Pakistan and has encouraged India to take on a bigger role in ensuring security in Afghanistan.
• India as a Security Provider: Continuing from previous policies, the U.S. aims to project India as a major security provider in South Asia and the Indian Ocean.
• Counterbalancing China: By promoting India as a security partner, the U.S. seeks to counterbalance China's influence in Asia.
• Deterrence Against Pakistan: India's partnership with the U.S. serves as a deterrent against Pakistan, especially concerning Pakistan's expanding nuclear arsenal.
• Burden-Sharing in Afghanistan: The U.S. hopes to share the burden of security in Afghanistan with India, leveraging India's significant influence in the region.
• Military Support to Afghanistan: Historically, India has declined requests from Afghanistan to supply military equipment, but this may change under the new policy framework.