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Hagel’s Visit to India and Indo-US Ties: A Perspective


Introduction

The US Secretary of State Chuck Hagel paid his first official visit to India in the first week of August 2014. This essay makes an attempt to analyze the significance of this visit against the background of the following narrative and to assess the emerging Indo-US relationship in the right perspective and project the future possible trend based on the present developments. The rise of China and the threatening noise it continues to make on asserting its rights on sovereignty claims and Obama’s Asia pivot policy and where India is factored in this changing times will be kept in the background in dissecting US’ Asia-Pacific strategy. It is also important to see where India’s interests with countries friendly to it coalesce and where those come into conflict and what could be the appropriate strategy and policy prescriptions suitable to its national interest.

In the past decade or so, international relations are witnessing swift changes in directions. The “enemies” of the past are emerging as “friends” of today and vice versa and foreign policy priorities are accordingly being reshaped. During the cold war era when India was perceived to be pro-Soviet, Indo-US relations were not inimical, yet not that friendly either. The collapse of the Soviet Union brought in dramatic overhaul in India’s economic policy, a departure from the controlled quota and license-raj of import substitution policy towards export promotion and market economy. Such a dramatic change in policy led to the change in world outlook towards India. The sustained high growth in successive years coinciding with economic decline in Europe helped raise India’s bar, thereby earning respect from the world as a newly emerging economic giant. The US attitude towards India too underwent a sharp change.

India established its credentials as a responsible nation when the US accorded the NSG waiver, taking India to another league of top nuclear nations. The first half of the decade-rule of Manmahon Singh government saw rosy days when India’s growth story became the talking point in world capitals. India slumped somewhat during Singh’s second term, having been immersed in scams, scandals, corruption and many negative traits that crept into the system. The economic growth rate declined somewhat; yet was substantial as compared to the developed countries which continued to face recession and stagflation. The peoples with high expectations showed their displeasure and punished the party by throwing out the government from power when elections were held in 2014.

The Congress party lost the confidence of the people and performed miserably at the hustings. The people reposed faith with the BJP and gave a mandate that it can form a stable government and deliver to meet their high expectations. Thus was heralded the Narendra Modi government with a new style of governance that promised jobs and growth. A dramatic overhauling of the system is under way and the initial days show signs of promise.

In this changed situation, the US attitude towards India too swiftly changed. The US government had revoked the visa given to Modi for his alleged complicity to the 2002 riots in Gujarat irrespective of the fact that the court found no evidence to this. The US was forced to take a U-turn and President Barack Obama lost no time to send Modi a congratulatory message over his election as India’s new Prime Minister and invited to visit the US. Modi was in no hurry but is expected to visit the US in September for a summit meeting with Obama.

In the meantime, the US continued to cultivate Modi by other means. Modi’s first and biggest diplomatic victory was when he traveled to Brazil for the BRIC summit and clinched the deal to set up a new bank for which India became the first president. Obama sent his Defense Secretary Chuck Hagel on a three-day visit to explore the means how bilateral ties can be deepened with Modi at the helm. Indeed, Hagel’s visit followed a similar stop in the country only a week ago by Secretary of State John Kerry and Commerce Secretary Penny Pritzker aimed at wooing India as a key ally in Asia. Both Kerry and Pritzker were in New Delhi for India-US Strategic Dialogue.

Highlights of Hagel’s visit

The major highlight of Hagel’s visit that commenced on 7 August 2014 was to deepen cooperation between the world’s largest democracy and world’s oldest democracy. Defence cooperation topped the agenda. In his 7 July letter to Modi, Obama had sought closer defence and strategic ties and had offered India to “co-produce and co-develop” state-of-the-art Javelin infra-red-guided anti-tank missiles and mentioned that Hagel would be discussing the details during his visit. As was thus expected, Hagel’s discussion with Modi and External Affairs Minister Sushma Swaraj covered this, including through military education and training exchanges. According to Pentagon Press Secretary Navy Rear Adm. John Kirby, Modi’s forward-looking agenda for his summit with Obama in the fall was also a part of Hagel’s discussion, during which both the leaders are expected to discuss a host of global issues as well. The topics covered in the discussion during Hagel’s visit included Iraq, Afghanistan, the threat of terrorism in the Middle East, as well as security issues in the areas comprised by the Indian and Pacific Oceans. The US looks forward to having a robust and energetic summit when Modi travels to the US in September.

Commensurate with its increasing global profile and in response to the changing security environment, India has been legitimately beefing up its military strength in order to cope with unforeseen eventuality. It has emerged as one of the world’s largest arms importer, sourcing as much as 75 per cent of its arms from Russia, its traditional ally from the cold war days. But lately, with a view to diversify the sources of supplies, it has looked for the US as new supply source. In recent years, its military spending has topped $30 billion a year, as it has worked to upgrade its military to counter an increasingly assertive China, though it dwarfs compared to over $130 billion spending on defence by China.

During his meeting with his Indian counterparts, Hagel offered seven new defence technologies for joint development. Besides putting “over a dozen concrete proposals” on the table, Hagel also offered a number of cyber security options to India. One of the key offers, the big data in which US leads the world, involves employing path-breaking algorithms to help predict terrorist attacks and for smart surveillance, such as using family relationships to find the whereabouts of Saddam Hussein. Other technologies on the table included the cutting edge anti-tank Javelin missile, the Hawk 21 surface-to-air missile and magnetic catapults, which help larger planes take off from smaller ships.

India is currently looking to buy some 3,600 anti-tank missiles with 900 launchers at a cost of $700 million (Rs 4,284 crore approximately) through the foreign military sales route. The army is in desperate need of an anti-tank missile as the indigenous Nag missile continues to be a work in progress. Under the Javelin deal, India and US would jointly produce the third-generation FGM-148 missile through transfer of technology (ToT) and jointly develop a fourth-generation missile that can successfully hit a target 2.5 km away. The weapon uses fire-and-forget technology where the launcher locks on to the target via thermal image and guides the missile through infra-red technology without being in the line of sight. While India is keen on co-production; it wants full transfer of technology. It seems the Javelin makers are willing to do 97% ToT and want to withhold the algorithms related to core infra-red seeker technology. Hagel reminded India that the window for purchase of Chinook and Apache helicopters at current rates will close by September. The US, which has kept aside six Boeing C-17 cargo aircraft for possible purchase by India, is extremely concerned about slow decision-making in the Indian defence ministry. Therefore, Hagel looked to find a new equilibrium with Arun Jaitley, the Defence Minister. It was not immediately clear if that was successful.

As bulk of the world commerce is sea borne, securing the sea lanes of communication under threat either from piracy or maritime terrorism has emerged as a major issue that has to be dealt with urgency. There are several chokepoints through which bulk of ships carrying cargo transit and safeguarding those vulnerable straits is a major issue to secure the economic fortune of many countries in an interdependent world. Maritime security is, therefore, another top priority for both India and the US in the backdrop of Chinese attempts to acquire long legs in the South China Sea and Indian Ocean. With US capabilities declining in the Asia-Pacific and India unable to cope with Beijing on naval up-gradation, both sides need each other to maintain the balance of forces in the region. Apart from the Javelin deal, talks with Hagel also centred around a new defence framework agreement for 2015-20, a tri-lateral maritime exercise with Japan, and the regional environment, including the rise of China and the situation in Af-Pak and West Asia.

Hagel’s mission was also to revive Indo-US defence relations, especially the moribund two-year-old defence trade and technology initiative (DTTI). Indeed, the DTTI is the centrepiece of Indo-US defence relationship. Under the DTTI, the US had asked India to join in co-producing and co-developing a series of cutting edge weapons and technologies. Though the US offered 10 weapons technologies, the programme failed to take off under the last government. Since Prime Minister Modi is determined to put the private sector in the front seat of India’s defence sector and reduce the country’s dependence on imported arms and with the private sector insisting on the need for foreign technology, the US’s joint weapons development offers are seen as a potential match for both sides.

The UPA government kept the Indian private sector at a distance from the DTTI. The Modi government is having a relook. Implementation, however, remains a concern. There are possibilities of “red tapes” on both sides getting in the way of building military industrial cooperation and the Modi government needs to be vigilant not to let that happen. The US expects “greater clarity” on the offsets needed under the new 49% FDI in defence policy. The important thing to note is that the US has not proposed such a co-development, co-production programmes “with any other country” other than India.

The existing five-year agreement between the two countries on defence expires in 2015. The New Framework for Defence Relations was signed in 2005 by then Defence Minister Pranab Mukherjee and his counterpart Donald Rumsfeld. India and the US, therefore, need to discuss the draft of a new bilateral umbrella agreement on defence cooperation. Hagel, therefore, invited the Defence Minister Arun Jaitley to visit the US in September to discuss this issue.

Following the 2005 cooperation agreement, the US established itself as a major supplier of military hardware to India. India is one of the world’s most lucrative arms market and Russia remained as a major player in this area for many years. Over the past decade, major US corporations sold military goods and platforms worth billions to the armed forces, mostly through government-to-government route. Hagel’s visit was not expected to lead to any immediate commercial transaction, but it certainly steered strategies for the future by way of co-production and co-development, as well as research on new technologies besides defence trade and bilateral exercises. Overall, Hagel’s meetings with Indian leaderships focused on converging interests of both the countries in the Asia Pacific as well as the regional security construct in the context of Afghanistan.

In any such kind of serious deal, no country can afford to take any hasty decision without analysing the implications from all perspectives. In a democratic set-up such as India, it is also necessary to take the opposition into confidence, though the final decision rests with the party in power. The US is appraised of this kind of dilemma that India might be facing and is willing to give time and space to the new Modi government to decide on its future course of action. Hagel was right to note that the US was mindful of the sensitivity of India’s independence in this regard. He observed: “It has been an independent non-aligned nation since it became a democracy. We respect that. We take note of that. The people of India, like the people of any nation, deserve their decision-making space, and how they want not only their country to be perceived, but what foreign arrangements they want to make based on their terms”.

He also alluded to the fact that India as a sovereign country has the right to make its own decision suitable to its national interests and take a decision accordingly be it an agreement or a deal or a sale with another country. Hagel admitted that any decision India or the US or any nation makes is always and must be predicated on the self-interest of that country. Referring to the unfulfilled potentials of the nuclear agreement, Hagel said that both India and the US ought to be patient with the realities of internal situations of governments and the peoples.

The Modi government decided to increase FDI in defence sector to 49 per cent but prospective partners, including the US, are keen to know what specific guidelines are defined and how the projects are to be worked out. They want to have more clarity on these issues. Indeed, defence ties between the US and India have expanded since the end of the cold war and the armed forces of both the countries have engaged with regular joint exercises. India’s decision to raise the cap on foreign ownership of arms manufacturing joint ventures to 49 per cent from 26 per cent is expected to persuade more military equipment manufacturers to setup shop in India.

India has emerged the largest defence export destination for the US. In 2013, India’s total import of US military hardware totalled $1.9 billion. (Check this figure) When Prime Minister Modi visits the US in September, it is expected that major military deal may be announced. Among the pending deals on which a decision is likely to be clinched are an order for 15 Chinook heavy-lift helicopters and 22 Apache attack helicopters from Boeing Co as well as additional orders for P-81 anti-submarine jets, C-130J Super Hercules transport planes, and other aircraft. There are possibilities that Modi might also discuss with his US counterpart if India and the US can jointly develop and produce the next generation of the Javelin missile in India for the Indian market as well for export to third countries.

Concluding observations

It transpires that the US has decided to invest heavily on India in view of the changing landscape in the security domain in the Asia Pacific region and sees India as an indispensable partner. The US seems to be convinced that India will play an important role in shaping a “new world order” in the 21st century. To quote Hagel: “When you look at the world today, and you’re all quite familiar with this, that India not only represents one of the most significant countries by any measurement in the world today, but will help shape a new world order that is emerging in this young century”.

In 2008, Hagel had made his first trip to India as an American Senator and even at that time he was convinced that India’s role in securing stability in the region in the coming years were going to be crucial, if not the fulcrum of Asia-Pacific security. From this perspective, Hagel was candid in observing that “big power stability and big power security have always been important in the world and their importance is not going to be diminished over the next few years”. One can hope that in the coming years, Indo-US relationship will assume robustness in all dimensions – political, economic and defence/security areas – and this new trend will surely help contribute to the peace and stability in the Asia-Pacific region.

(The writer Dr. Rajaram Panda is The Japan Foundation Fellow at the Reitaku University, Chiba, JAPAN. E-mail: rajaram.panda@gmail.com)

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