‘India should be less worried about trade with US than others’

The following interview originally appeared in The Business Standard on November 27, 2016. 

After a long hiatus, a Republican has become the President of the United States. And it is not just any old Republican but Donald Trump, who is above all, a man who understands business and finance. What does his becoming US President mean for South Asia as a region and India in particular?

Since the end of the Cold War, India has largely preferred working with Republicans or even centrist Democrats, as they have been more open to trade and immigration and generally hawkish on foreign policy matters, and consequently more supportive of India’s rise. Republicans in the U.S. Congress were among the biggest advocates for lifting sanctions against India after the 1998 nuclear tests, and of course George W. Bush played a major role in the transformation of bilateral ties. But in his successful presidential campaign, Trump has thrown out many elements of the traditional Republican platform on social, economic, and foreign policies. I would, in addition, question his business acumen. By his own count, Trump has declared bankruptcy four times, and he still mostly reaps the benefits of a large inheritance.

So Trump and his administration come into power as somewhat blank slates on India and our neighbourhood. A few key elements of Trump’s broader policies are already discernible, especially on trade, where he has reiterated his promised to withdraw from the Trans-Pacific Partnership. However, many other issues of importance to India will depend on the team that Trump surrounds himself with, including on terrorism, immigration, non-proliferation, and climate change. A more managerial Secretary of State or a Secretary of Defense with greater experience to India’s west may mean a bumpier ride for India, at least at the beginning. And of course a career bureaucracy and large U.S. military will ensure an element of continuity in U.S. policy, for better or worse. While no one – not even Trump himself – knows exactly what policies he’ll be able to implement, there is a big opportunity right now for India to shape a favourable outcome from his election. New Delhi needs to seize it, and there are signs that it already is doing so.

A lot has been said about his views on immigration. Do you consider this a matter of crucial importance in Indo-US ties?

Immigration to the United States is a big issue for India. There are over three million Indian-Americans, and they comprise the wealthiest and highest-educated ethnic group in the United States. Many Indian-Americans have maintained close ties with India, and are among the most important foreign investors. Through ups and downs, Indian-Americans have provided a natural bridge between the two countries, ensuring that India’s relations with the United States are on a fundamentally different plane from India’s relations with other large and powerful countries such as China, Japan, or those of continental Europe. U.S. efforts at stemming immigration could, therefore, have a negative effect for bilateral relations, making the United States a more “normal” country from India’s point of view: just another partner with which to do business.

It is at present unclear whether a Trump administration will be willing and able to distinguish between low-skilled and high-skilled immigration, or between permanent and temporary migrants. Indian industry, in particular, will be paying a lot of attention to the future of the H-1B visa regime, which has benefited both countries significantly. Additionally, many Indians – and I include myself here – have benefited from studying and working in the U.S. before returning to India. Consider Indian industrialists such as Ratan Tata or the Ambanis or Anand Mahindra, or political leaders like Piyush Goyal or Jayant Sinha or Shashi Tharoor, or any number of prominent Indian academics, intellectuals, and activists.

Should New Delhi be concerned about his position on trade?

India should be less worried about trade with the U.S. than others – notably, China, Japan, Southeast Asia, and Europe. That’s because the Indian economy simply isn’t as dependent on trade with America as most others. In fact, more often than not, trade issues were proving an irritant in bilateral relations. The Trans-Pacific Partnership, for example, would have put India at a short-term disadvantage. Trump’s promise of imminent withdrawal from the TPP will therefore give India some breathing room and respite. That said, trade in services could possibly suffer from a more protectionist United States, and the Modi government may find it slightly harder to fulfil its promise of boosting Indian exports.

Will Trump’s election mean a recalibration of Sino-US relations, and as a result, some instability in Asia?

There will certainly be changes in Sino-U.S. relations, but there are wildly different indications about the nature of that change. Some of Trump’s advisors have articulated an Asia policy that involves a major U.S. naval build-up in Asia coupled with more barriers on trade. Militarily and politically, this might mean a closer relationship with India, Japan, and others who share concerns about China’s rise and military modernization. It may also lead to a rethink in Beijing about its own military ambitions. Alternatively, an unwillingness or inability to see through a military build-up by the United States or a dilution of U.S. alliance structures in the Asia-Pacific could lead to greater Chinese adventurism, which India would clearly not welcome.

There are equally contradictory signals on the economic side. If a decision to stop facilitating China’s economic rise is coupled with a shift towards deeper economic and commercial cooperation with India, it would obviously be a great benefit. The argument in favour of such an approach would be that India’s economy is not state run, even if it is overregulated, unlike China’s where business is still dominated by state-owned enterprises. At the same time, India should be concerned about a potential trade or currency war between the U.S. and China leading to a race to the bottom.  A still fragile Indian economy could be collateral damage.

What does his election tell us about American society?

While Trump’s presidency may in fact prove beneficial for India in certain ways, I’m not sure it reflects particularly well on the United States as a country or as a society. Most of the 62 million Americans who voted for Trump may not share the views that he has articulated or tolerated regarding minority groups and women. But equally, those who voted for Trump evidently felt that his condemnable and divisive rhetoric did not disqualify him from the presidency. Trump has already tried to distance himself from some of his white supremacist supporters, but there is no question that some will now feel empowered.

The United States has long distinguished itself as a country open to immigrants from many countries. Today, more than 13 percent of Americans were born abroad. The United States has also been quite successful in dealing with issues of multiculturalism, particularly relative to the nation states of Europe, including the UK, France, and Germany. Trump’s election is, in that sense, a setback for the United States, and will undoubtedly affect America’s international appeal or soft power. Of course, this could all be a temporary blip, much as Barack Obama’s election seems in hindsight. The United States has exhibited an ability to self-correct under much more adverse circumstances in the past. Nonetheless, we should expect a period of much more open fissures in American society, between rural and urban America, Republicans and Democrats, men and women, rich and poor, and whites and non-whites.

Long Live the 'Pivot'

The following article originally appeared in The Business Standard on October 17, 2013.

Ever since it was unveiled in October 2011 to much fanfare, the American policy described as the "pivot to Asia" has been beset by one problem after another. Two years on, it is comatose, and could be well and truly dead. US President Barack Obama's decision to cancel his visit to the Philippines, Malaysia, Indonesia and Brunei - the last two for major regional multinational summits - may have been compelled by domestic political developments, specifically the government shutdown prompted by the legislative impasse between Democrats and Republicans in the US Congress. But his decision to cut or cut short a trip to Asia for the third time in his tenure as president contributes to a worrying trend, and casts serious doubts about his administration's sense of strategic priorities.

The concept of a pivot to Asia came about as the result of several realisations on the part of senior US policy makers. The first factor was structural: an acknowledgement that Asia - home to over half of humanity, the primary engine of global growth, and a region with the potential for deepened military competition between emerging great powers - is increasingly vital to American interests. It was understood that US efforts and resources were being disproportionately allocated to a mostly self-sufficient and peaceful Europe and a fractured, if resource-rich, West Asia. The second, policy-related factor was the belated acknowledgment on the part of Mr Obama's senior advisors that China - towards which Washington had made sustained efforts at engagement during his first term as president - was unlikely to evolve into a willing and co-operative partner to the United States on many regional or global issues.

But the pivot, championed by former secretary of state Hillary Clinton and some of her advisors, came at an inappropriate time. Ms Clinton was on her way out of government, and her successor, John Kerry, appears not to share her sense of strategic priorities. Indeed, he spent the early months of his tenure diving into the thorny challenges of West Asia, such as the rabbit hole that is Israel-Palestine peace talks. Furthermore, the US became mired domestically in budgetary battles, resulting in cost-cutting measures, particularly for its defence department. An estimated $1.2 trillion in defence budget cuts is now to be expected over the next decade, which has resulted in some of the more ambitious aspects of military rebalancing to Asia being placed on hold. And, finally, with the Arab Spring wreaking havoc on the long-standing political order of West Asia - particularly in Egypt and Syria - that region has once again become the focus of American crisis management efforts.

There may have been a certain inevitably to some of these developments. West Asia's veneer of political stability was simply unsustainable, while the warning signs of American fiscal profligacy were there for all to see. But they were all the more reason for Mr Obama - and not Mr Kerry - to travel to Bali and Brunei last fortnight and reinforce the sense of the US being a permanent fixture of Asia's institutional architecture.

For not only have the military dimensions of the pivot gone largely unrealised, ambitious deadlines for trade negotiations as part of the Trans-Pacific Partnership (TPP) - the primary commercial arm of the pivot - have not been met. Indeed, the TPP may be affected by the current legislative stand-off, as Mr Obama's plans for trade promotion authority - fast-track trade legislation that circumvents potential Congressional amendments - are likely to face stiff opposition from both Republicans and Democrats in an American political environment increasingly predisposed to protectionism. The Asia-Pacific Economic Cooperation (APEC) meeting in Bali was meant to lay a platform for the US and 11 other countries involved in the TPP to reach a deal by the end of the year, which makes Mr Obama's absence particularly significant.

India has reason to treat American ambivalence about the pivot with serious concern. Despite continuing criticism in many quarters about the drawbacks of American hegemony - sometimes merited - Indian policy makers implicitly acknowledge that the US' presence as a commercial and military force in the Asia-Pacific region provides a reassuring balance to a rising China. Indeed Indian public opinion, in so far as it can be discerned from surveys, displays a remarkable comfort with US global and regional leadership. And, as India's recent economic and security woes illustrate, New Delhi is not yet in a position to go it alone in shaping a regional architecture to its own benefit. With a host of economic agreements with the Association of Southeast Asian Nations, Japan and South Korea, and with membership in all Asean-led multilateral groupings, India is now an integral part of the Asia-Pacific region, so much so that the term Indo-Pacific has now been widely adopted in strategic circles. The US' retrenchment in the region, if realised, would mark a serious setback for Indian interests.

Net Assessment in Defence Policy

The following article appeared in the Business Standard on June 20, 2010.

Net assessment involves simulations, opposition analysis, critical reviews and low-probability, high-impact contingency planning

The 1980s witnessed an extraordinarily fervent debate in the United States about the ability of the Soviet military to inflict a decisive conventional defeat in Europe against American and Nato forces. At the policy-making level, the debate swung between those who believed that the US and Nato could thwart a Soviet blitzkrieg but still required nuclear weapons in Europe as a deterrent, and those who believed that the West would likely be defeated in a conventional conflict but had a chance of defending itself successfully.

At the same time, the public debate that took place in the media was dominated by overwhelming pessimism. Commentators argued, with a conviction bordering on certainty, that the Eastern Bloc had the means and ability to overpower Nato on the plains of central Europe. This debate revolved almost exclusively on the balance of conventional ground forces and it continued right until the fall of the Berlin Wall and the concomitant dissolution of the Warsaw Pact.

Over the course of the wider debate, the optimist camp pointed to at least four fallacies in the pessimistic arguments. First, in their view, the pessimists unquestioningly believed the assessments of US commanders — particularly the Supreme Allied Commander-Europe — without considering their vested bureaucratic interests in exaggerating the Soviet conventional threat. An inflated threat assessment was, after all, a means of consolidating the alliance and securing additional resources. Second, they assumed that because the Soviets had performed a particular exercise or had written about a certain plan or tactic, that they had the ability to execute it, which naturally inflated Soviet capabilities.

Third, the pessimistic view was unduly influenced by work in the classified intelligence realm, which relied upon a large number of sources, but fell short on analysis due to the vagaries of intelligence production. And finally, pessimistic scenarios tended to favour the offence, on the grounds that it held the initiative and could employ an element of surprise, with little regard for the fact that defence rendered substantial advantages of its own.

If this sounds eerily familiar, it should be no surprise. The context and ensuing discussion have shockingly similar parallels to some of the ongoing debates in India over the Sino-Indian balance. Media reports, often citing anonymous army sources, reveal the service’s woeful unpreparedness in dealing with a hypothetical conventional offensive by China. There is little consideration of the air balance in these analyses, let alone the role that nuclear weapons can — and do — play as a dampener of conflict.

The collective assessment in the public domain of China’s military modernisation programme, based on piecemeal reports of varying levels of reliability, produces a picture in toto of ‘the ten-foot-tall Chinese’. There have been few, if any, unclassified Indian studies of the ability to hold sparsely-populated mountainous terrain in the event of a conventional attack by China. Nor, outside the government, have the wider political implications of a hypothetical Chinese conventional assault been seriously thought through.

The Indian public debate would benefit tremendously from enhanced net assessment. The purpose of net assessment — a concept that took hold at the US National Security Council and subsequently at the US Department of Defense with the establishment of the Office of Net Assessment in the 1970s — is to provide an objective and rigourous evaluation of military competition. This could involve simulations, opposition analysis, historical and cultural studies, critical reviews, and low-probability/high-impact contingency planning.

The absence of such analyses is being remedied in Indian governmental circles, with the National Security Council Secretariat taking much of the initiative. However, far more needs to be done in the public domain, both as a means of restraining wild speculation and providing context to those media reports that do reveal thinking within the Indian armed forces and the national security establishment.

Whether or not India presently underestimates or overestimates its position, comprehensive and objective assessments of current and potential military competitions would result in necessary course corrections. Areas of weakness could be identified for further resource allocation while imprecise exaggerations would prove less distracting. An open and cooperative government and responsible media can help produce a more accurate picture of where India stands with regards to its military preparedness. But with New Delhi home to an ever-growing number of think tanks and policy research institutes, the task also falls upon them to ensure that the public debates on India’s multiple military endeavours remain in perspective.