India-US Ties: Opportunities and Challenges

Kanwal Sibal, 

Dean, Centre for International Relations and Diplomacy, VIF

Prime Minister Narendra Modi’s visit to the US was undoubtedly a great personal success. President Barack Obama, following the personal gestures made by Japanese Prime Minister Shinzo Abe to Modi and those made by the latter to Chinese President Xi Jinping, probably felt it would be diplomatically politic if he too could emulate them in some way. He made the unusual gesture of accompanying him for a tour of the Martin Luther King memorial, and through this show of regard sealing the reconciliation between a forgiving Modi and a defensive Obama on the visa denial issue.

By providing firm leadership, expressing determination to attend to some long neglected basic social issues, focusing on development, wooing the business community, emphasizing his agenda to make India a manufacturing hub, Modi has caught the imagination of Indians of course, but foreign partners of India as well as they see doors opening for more economic opportunities in India. By his remarkable self-assurance and the confidence he exudes, Modi is changing perceptions about India. This is in itself a major achievement. But now that he has raised expectations about the changes he intends to bring about, his performance in the months ahead will be closely watched.

Modi’s US visit presented him with a particularly difficult challenge, as the relationship between India and the US presents opportunities as well as problems that are on a different scale compared to our relationship with any other country. At the rhetorical level projecting the India-US relationship is easy, especially as rhetoric comes easily to the Americans and we too are comfortable with platitudes. The US can call its relationship with India as a defining one in the 21st century, though what it means is unclear and actual US policies towards India do not support that rhetoric. Our hype about India and US being natural partners- or “natural global partners” as embellished by Modi- is not justified by the record of our relations with the US ever since our independence. Even after the end of the Cold War, we were not brought together “naturally” and even now, with the general perception that India-US relations are marked by loss of dynamism and have entered a phase of stagnation, the rhetoric of a natural partnership seems unconnected with reality.

One big underlying problem is the widespread US grouse given vent to in US official and strategic circles is that India has not adequately rewarded the US for lifting nuclear sanctions on it through the bilateral nuclear deal and the NSG exemption. The assumption behind such thinking is that India should have had no grievance against the US for over three decades of sanctions aimed at stunting India strategically and confining it permanently to an inferior international status, and should actually be grateful for the reprieve given to it by the US. India has, in fact, made compromises when it comes to sovereignty over our nuclear programme by accepting oversight and safeguards that no other nuclear weapon state has conceded. We look upon the lifting of sanctions on India as a necessary step for India and the US to have normal ties, even though it is recognized that the US was politically bold to revise its nuclear posture towards India. But that is no reason for India to be so grateful as to abandon an independent view of its interests, and act as an ally of the US. That the US should expect its nuclear firms to get business in India is normal, but to behave as if the nuclear deal’s primary purpose was to open commercial doors in India for its firms does not make sense. The US can certainly lobby for an amendment to the Indian nuclear liability act in order to facilitate the business interests of its firms, but to make it almost a central reason for the malaise currently affecting the relationship is taking a transactional, not a strategic, view of the India-US nuclear deal.

The other US grievance colouring US views of India currently was the exclusion of its firms from the magnum combat fighter deal. After that “unfair” blow, the US now eyes a big share of the Indian defence procurement pie as compensation. On the economic side, apart from the slowdown of India’s economic reforms, particular in the financial sector, that has cooled off the ardour of US firms towards India, US corporations have launched a political campaign against India’s intellectual property, trade and investment policies for the damage they do to US corporate interests, especially in the pharmaceutical sector. On WTO issues, the US sees Indian positions as obstructing consensus. 

Unfortunately, the US government converts differences in a multilateral forum that affect several countries into bilateral differences. This then becomes a point of pressure on India bilaterally, adding to the list of divergences between the two countries on shaping the global trading system.

It is in this background that one must assess the results of the Modi visit. In effect, Modi and Obama have discussed these issues without being able to close differences. Normally, at a joint press briefing, both sides highlight the principal agreements and concrete understandings reached. A careful reading of Modi’s remarks shows that while discussions may have clarified respective positions, they did not produce concrete results. In his remarks, Modi said he “believes” that with the change in Indian policies and processes intended to make it easy and productive to do business in India, the India-US economic partnership will grow rapidly in the coming years. This is a reasonable expectation to have. On IT related issues, Modi pointedly mentioned that he had sought Obama’s support “for continued openness and ease of access for Indian services companies in the U.S. market”- a major concern for us. He did not clarify what Obama’s response was to his expression of dissatisfaction. On the “candid discussion” on the WTO stand-off over the trade facilitation-agricultural subsidies issue, Modi maintained the position that while India supports trade facilitation, he also expected a solution, hopefully soon, “that takes of our concern on food security”. It is to be hoped that Obama found force in Modi’s concerns and that India will not be berated diplomatically by the US in the WTO.

On a more positive side, he spoke about the great convergence on stability on “peace and stability in the Asia Pacific region” and of the US being intrinsic to our Look East and Link West policies. This is a significant statement as it recognizes the role of the US in our larger strategic calculus. However, on terrorism and the “new threats of terrorism in West Asia”, contrary to advice being proffered by many in the US and India, he did not mention the ISIL by name in his joint press conference, simply mentioning the agreement “ to intensify our counter-terrorism and intelligence cooperation”, which is unexceptionable. Modi’s reticence in supporting the US-led “coalition of the willing” in West Asia would have disappointed those campaigning for India to join Obama’s war against the Islamic State. Why India should not have learned the right lessons from the abysmal failure of an earlier such coalition in Iraq is not explained. The current US action is outside the UN framework, and to that extent is contrary to international law. Bombing Syria without obtaining the consent of the Syrian government is against international law too. Obama himself has been ambivalent about military action in Iraq, as the centre-piece of his strategy has been to extract the US from wars in this region. The US has decided to arm and train Syrian “moderate extremists” to fight the ISIL as well as the Assad government. With these kinds of legal and geo-political complexities, it hardly made sense for India to feel obliged politically or morally to support the US in its military action against the Islamic State, however odious this group is.

In his joint press conference, Modi especially welcomed “the U.S. defence companies to participate in developing the Indian defence industry”, without mentioning any specific initiatives, in particular the US offer of 10 co-development and co-production projects. It is unlikely that even with the FDI ceiling in defence raised to 49%, US companies will invest in India’s defence sector substantially and transfer technologies meaningfully. They would want majority shareholding, and even then they would deny certain technologies so that any recipient country remains dependent.

Those curious whether the joint statement would say more about the nature of discussions and the concrete outcomes would have not been better enlightened. The joint statement expresses positive intentions and decisions to set up committees or other mechanisms to deal with issues on the agenda, but without announcing any breakthroughs. Some are arguing that this vision statement has a longer-term perspective and not immediate deliverables. This begs the question why it was not possible to have immediate deliverables if the relationship is otherwise so fecund in prospects. Is there nothing achievable with the US in the short term? If not, what is the guarantee that the medium to longer-term prospects would be better?

The joint statement says that both sides “will facilitate” actions to increase trade five-fold, meaning that the figure will almost reach US-China levels. This might be a desirable objective but it is simply not achievable in any realistic time frame. India needs to modernize its poor infrastructure. Can the US realistically help build India’s physical infrastructure on the scale of India’s requirements? The two sides have “pledged” to establish an Indo-US Investment Initiative and an Infrastructure Collaboration Platform to develop and finance infrastructure. Is the US ready to develop industrial corridors like Japan is doing? Can it compete with more cost-efficient competitors in building highways, ports and airports etc? India has “offered” U.S. industry lead partnership in developing three smart cities, but then we have offered cooperation in this area to Japan, Singapore and even China. US technology in Indian railway networks is mentioned, but can the US compete in this area with Japan, France, Germany and now China? It is certain that some homework has been done by both sides about commercial possibilities in all the areas mentioned above, but details are lacking. The US no doubt has strengths in the education and health sectors, in biotechnologies, digital technologies, or what is generally called innovative technologies. Clean technologies is another area of its strength. One could have expected a big announcement during the Modi visit in the R&D sector- in solar energy, for example, for meeting India’s needs and those of other countries too. That would be relevant to climate change concerns too.

On the bitter WTO wrangle, the officials were “directed to consult urgently” along with other WTO members on the next steps. With India now believing that unlike at Bali where it got limited support on food subsidies, the number of countries now supporting India’s position has swelled. Would this make an India-US understanding on the subject easier? The two leaders “committed to work” through the Trade Policy Forum to promote an attractive business environment (how and what are the metrics?) and to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of this Forum (will this bridge real differences, especially when the US is too demanding and India insists that our policies are TRIPS compliant?). Already “officials” on our side have made it known that India will not budge from its position and that the Working Group agreed to is not for making concessions to the US.

On civilian nuclear cooperation, the two sides have reaffirmed their commitment to implement fully the U.S-India civilian nuclear deal and establish a Contact Group to advance it. This poses the question whether we are willing to revise our liability act, and if not, is the US willing to work within it and find a mutually acceptable solution that limits the liability in time and in financial terms. On defence cooperation they “stated their intention” to expand it to bolster national, regional, and global security- which in effect would raise such cooperation to an unprecedentedly high level. Defence cooperation to bolster “global security” has far reaching implications, and because of this the scope of such cooperation is difficult to grasp under the present circumstances. What does expanded defence cooperation mean in terms of “regional security”? Is the US ready to change its accommodative policies towards Pakistan, deny it military aid and take steps to curb its nuclear programme. How does its talks with the Taliban fit into this scenario?

The decision to renew for ten more years the 2005 Framework for the U.S.-India Defence Relations is to be welcomed, but directing the defence teams of the two countries “to develop plans” for more ambitious programs and activities means that specific proposals are lacking at this stage. Nonetheless, the intention to be more ambitious in the sector is significant politically, and other partners of India will watch carefully progress in this area. Enhancing technology partnerships for India's Navy, including assessing possible areas of technology co-operation, will be considered, which is important if it can be accomplished. The agreement to upgrade the existing bilateral exercise MALABAR is important in terms of the two sides working closely together in the Indian Ocean to safeguard the sea-lanes of communication. Surprisingly though, there is no mention of the 10 projects US has offered for co-development and co-production.

On terrorism, which is a prime issue for both India and the US and on which there is much convergence in theory but less in terms of priorities and required action, the two leaders reaffirmed “their deep concern over the continued threat posed by terrorism, most recently highlighted by the dangers presented by the ISIL, and underlined the need for continued comprehensive global efforts to combat and defeat terrorism”. This is the only joint public reference to ISIL during the Modi visit. It can be taken for granted that India is strongly opposed to the kind of ideology that animates groups like ISIL. It is not the nature of the ISIL but the forces that have spawned it and allowed it by design or default to rise that account for India’s reticence in joining the US in its fight against it. The mere mention of ISIL in the joint statement is being cited by those pushing for Indian support for the latest version of the Coalition of the Willing, unheedful of the disaster of a similar coalition in West Asia in the past, as a welcome step by India to discard its nonaligned baggage and assume its global responsibilities as a rising power- as advocated by the US. On the other hand, Modi did not mention ISIL in his speech at the UN as many hoped he would. Actually, he obliquely expressed reservations about the combat against terrorism in West Asia as not being inclusive, implying that Iran and Syria were being excluded, when in fact it was a problem for all countries, irrespective of geopolitics. He did not mention ISIL in his speech at the Council on Foreign Relations in a gesture to please Obama before their meeting. The joint statement stresses the need for joint efforts, including the dismantling of safe havens for terrorist and criminal networks, to disrupt all financial and tactical support for networks such as Al Qaeda, Lashkar-e Taiba, Jaish-e-Mohammad, the D-Company, and the Haqqanis. This is to be welcomed, but one must not see in this a new US determination to apply pressure on Pakistan. Notwithstanding a big bounty declared on his head by the US, Pakistan is not deterred from allowing Hafiz Saeed freedom to conduct his provocative activities. The omission of the Taliban from this list is noteworthy and exposes the limitation of what has been agreed to by both sides in combating terrorism.

Obama’s affirmation that India meets MTCR requirements and is ready for membership in the NSG, and his support for India’s early application and eventual membership in all four regimes, is a positive element in the joint statement, though it is not clear when this might happen. He essentially repeated the formulation he used in 2010 on India’s permanent membership of the UN Security Council, indicating no forward movement in the US position in the last four years, which is to be expected.

It is on Asia-Pacific that the joint statement shows a more substantial convergence of interests. Significantly, it makes a subtle link between India’s "Act East” policy and the United States’ rebalance to Asia. The joint commitment to work more closely with other Asia Pacific countries, including through joint exercises, points towards more cooperation with Japan and potentially Australia. The joint concern expressed about rising tensions over maritime territorial disputes, and affirmation of the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea are significant in the context of China’s assertive policies in the western Pacific. Exhorting all parties to avoid the use, or threat of use, of force in advancing their claims is a clear allusion to China. In this connection, the importance of the trilateral dialogue with Japan and the decision to explore holding it at Foreign Minister’s level- a formulation used in the Tokyo Declaration during Modi’s Japan visit- assume significance. It is clear that on this subject, President Xi’s visit did not tie Modi’s hands in finding common ground with the US on the challenges China’s rise presents to neighbouring countries.

The scope of the India-US engagement is large and the stated intentions on both sides are always buoyant. The problem resides in the US expecting too much and too quickly, and India being unable to respond to the pace and scope of US demands because of sensitivities over issues of independence and sovereignty, disparity in power, non-identical world-views, different stages of economic development and policy and legislative changes required at the Indian end.

Overall though, despite the fact that the parsing of the joint statement brings out areas where the two sides are not on the same page, Modi’s visit to the US has been a huge publicity success, both for him and India. The rapturous welcome he got from the Indian American community in New York indicates the hopes he has raised about India amongst our people abroad, with his focused approach to making India strong. His appearance at the Central Park event was imaginative and dismissing such unorthodox initiatives as “event management” shows narrow-mindedness. His joint editorial with Obama was a coup as it equated the two politically and conveyed that there was enough convergence of their respective views on bilateral and international affairs to allow them to put their thoughts together in a public text.

The most important outcome of the visit was, in a sense, the self-assured and confident way Modi conducted himself, projecting in the process a new and confident India. He handled Obama as an equal and did not feel obliged to make any unilateral effort to establish the right chemistry with him and convince him of his own credentials and those of India as an eligible strategic partner of the US. This was contrary to the defensive advice proffered by many in the American and Indian strategic communities that Modi should assume the burden of responsibility in winning over Obama.

Resolving problems with the US will remain a challenge, but India should be wise to address that challenge as it needs good, stable relations with America for dealing with a very complex geopolitical chess board on which it must try to win advantageous positions.

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Published Date: 14^th October 2014, Image source: http://www.indiawrites.org/

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

India-US Relations – the Road Ahead

Dr Harinder Sekhon, 

Senior Fellow, VIF

The recently held Modi-Obama summit has been subjected to varied assessments both in India and the United States. Official communiqués describe the meeting as “extraordinarily successful,” one that has re-energised the strategic partnership between the two countries and set the stage for a ‘re-set’ of Indo-US relations. According to the Joint Statement, the two leaders have ‘endorsed’ the first ‘Vision Statement for the Strategic Partnership’ as a “guide to strengthen and deepen cooperation in every sector for the benefit of global stability and people’s livelihoods over the next ten years. They also reiterated their commitment to move forward together through a new mantra: ‘Chalein Saath Saath: Forward Together We Go.’

According to Phil Reiner, senior Director for India at the US National Security Council, Prime Minister Modi’s visit was “extraordinarily successful. It has provided a boost in terms of the vision and focus that we have for our bilateral relations." He further elaborated, "We’re excited to be moving forward with a re-energized strategic partnership. The US continues to strongly support a prosperous India that plays an important role in the global stage, and I think the Prime Minister's visit really provided the opportunity for the two leaders to discuss that vision that's necessary in order to set the framework under which we are going to operate going forward."

This in a nutshell sums up the importance of the Modi-Obama meeting despite a counter voice closer home where some analysts feel that the euphoria is a creation of media hype and that there has been more style and rhetoric rather than substance. India does figure high in US strategic calculus and according to Nicholas Burns, “In strategic terms, there are few countries more important to Washington than India, the dominant power in the Indian Ocean region and, with Japan, the most important U.S. partner in Asia seeking to limit Chinese assertiveness in the region.” Economically too, Indian and US interests are finding increasing convergence between the US search for investment opportunities and India’s need for foreign investments to meets its developmental goals.

This mutual dependence has turned Modi’s visit into one of the most remarkable visits by an Indian Prime Minister to the United States. PM Modi packed in a wide range of activities into a fast-paced schedule both in New York and Washington D.C. displaying great energy, oratorical skill and a remarkable flair for diplomacy that helped establish a strong connect with all the major stake holders – the Indian American community, business leaders and the US Congress. Whether it was his event at the Madison Square Garden or his stroll around the Martin Luther King Memorial in Washington D.C with President Barack Obama, all had a positive impact and there is optimism that under Modi’s decisive and pragmatic leadership, backed by a strong political mandate, India-US relations will move to a higher trajectory. The vision statement lays out a clear road map for bringing matters to fruition over the long term and in the coming months various bilateral meetings are slated to be held between stakeholders to “revitalize the existing partnership and find new areas for collaboration and mutual benefit.”

But much work remains to be done. Despite the positive synergy that the two leaders have created, there are many hurdles that linger from the past. American strategic thinkers and policy analysts see a lack of vision and commitment on both sides and while admitting that President Obama has been more preoccupied with other pressing matters, they are equally quick to remind that India would also need to “walk the talk” and take definite incremental steps to overcome the policy paralysis of the past couple of years. To India, the United States seems too transactional which leads to considerable mistrust towards its motives. This leads to utmost caution on moving the economic and strategic agenda forward, which in turn frustrates the US as this has delayed and even disrupted initiatives in the past – something that does not inspire confidence especially at a time when India is seeking US investments to revive India’s economy.

In the economic sphere, the Joint Statement observes that while US-India trade, at $100 billion, has increased five-fold since 2001, the two leaders have committed to “facilitate the actions necessary to increase trade another fivefold.” Investments in infrastructure development, clean energy and R&D – all critical to India’s developmental needs, have been listed as priority areas for joint ventures. India also aspires to emulate the US in preeminence in research and innovation, as also the manner in which it has leveraged the power of entrepreneurship to enhance the prosperity of its people. Therefore, it is in India’s interest to foster closer economic ties with the US, our second-largest trading partner and the largest customer base for the Indian software industry.

While the PM has re-ignited excitement about India amongst major US business houses and the Indian American business community, asking them to “Come, make in India,” policy makers would have to be realistic and recognize that no investments will come if a venture will not bring benefits to the investor as well. For all stake holders to gain equally from any business collaboration, there will have to be immediate structural reforms to create an amiable business environment and assure the American business community that Indian red tape would be weeded out and simpler business and tax procedures established.

Both leaders “discussed their concerns about the current impasse in the World Trade Organization (WTO) and its effect on the multilateral trading system.” Officials in both countries have been directed to hold consultations with other WTO members and find a way out of this stalemate. Since India’s recent stand at WTO has caused ‘frustration’ and ‘despondence’ in the US, India must be seen as a resolute power committed to upholding the global trading system and should find a solution that would safeguard its food security concerns without isolating it from the global trading regime. Such a settlement would benefit Indian business leaders too and they are in favour of India negotiating its inclusion into APEC, show its commitment to find a way out of the WTO impasse and look for ways to move forward on the BIT.

The fact that the D-Company and South China Sea were mentioned for the first time in the Joint statement shows greater acceptance and a meeting of minds on common threats and challenges. Both leaders “reaffirmed their deep concern over the continued threat posed by terrorism, most recently highlighted by the dangers presented by the ISIL,…and underlined the need for joint and concerted efforts …to disrupt all financial and tactical support for networks such as Al Qaeda, Lashkar-e-Taiba, Jaish-e-Mohammad, the D-Company, and the Haqqanis.” This is a positive signal and counter-terror cooperation will be stepped up.

The two leaders have also agreed to intensify cooperation in maritime security to tackle the challenges posed by maritime disputes, especially in the South China Sea. Cooperation in East Asia is to be stepped up “through consultations, dialogues and joint exercises” amongst the countries of the Asia-Pacific. It is heartening to see that India seems to have shed off its reticence and is assuming a more robust strategic role in East Asia.

To facilitate deeper defence cooperation, the Framework for US-India Defence Relationship of 2005 has been renewed for another ten years. While not much headway was made in the first ten years as India has not agreed to US proposals for a Logistics Support Agreement (LSA), Communication Interoperability and Security Memorandum of Agreement (CISMOA), and End-User Verification Agreements (EUVA) on military sales because of the physical inspections built into military sales and transfer of technology issues, there is optimism that both India and the US would be more accommodating as India embarks on the process to acquire more weaponry to meet its defense shortfall, something that the US military-industrial complex cannot ignore.

The first meeting of the Defence Trade and Technology Initiative (DTTI), in September 2014, has decided to establish a Task Force to “evaluate and decide on unique projects and technologies which would have a transformative impact on bilateral defence relations and enhance India’s defense industry and capabilities.” This follows from US Defence Secretary, Chuck Hagel’s assurance in New Delhi in August 2014 to revitalize the DTTI that had been announced by the earlier Defence Secretary Leon Panetta in 2013. The aim of the DTTI was to shift US-India defence relations from a buyer-seller relationship to one involving co-production and co-development. It said the "closest partners" would collaborate in "defence technology transfer, trade, research, co-development and co-production for defence articles and services, including the most advanced and sophisticated technology." Focused working groups to move this initiative forward need to be set up as such collaborations have the potential to impart India greater strategic autonomy and prestige in a changing global scenario.

India-US relations have without doubt received a positive boost from the Modi-Obama summit meeting. The two countries are bound by common values, people to people interactions, soft power linkages and a basic understanding of each other that brings a special dynamism into this partnership. But the challenge in creating a durable strategic relationship will be for the US to treat India as an equal partner and for India to make itself sufficiently useful to Washington to ‘justify the political costs’ needed to implement policies that strengthen Indian power. Can Modi and Obama establish a definitive road map and sustain the momentum?

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Published Date: 13^th October 2014, Image source: http://im.rediff.com

Let’s not Get too Relaxed on China

Kanwal Sibal, Dean, 

Centre for International Relations and Diplomacy, VIF

Reports of Chinese soldiers intruding 10 kilometres into Ladakh challenge once again our assumptions about the stability of the situation on the unsettled India-China border. Our expanding relationship with China has encouraged thinking that the border issue is no longer central to the future of the relationship and can await resolution as and when possible. We have adjusted ourselves to China’s India strategy. We downplay such incursions.

Hopeless

The low priority attached by the Chinese leadership to the resolution of the border dispute is ignored by us. President Xi Jinping has lost no time in telling us that the border issue is not easy to resolve, reiterating former Chinese premier Wen Jiabao’s remarks in Delhi in 2010. He has scotched any hope of changed thinking in Beijing on an issue that generates distrust and apprehensions about China’s longer term intentions. In effect, President Xi has closed the doors to a settlement for the next ten years when he will be in power. We have not reacted.

President Xi’s five point proposal for conducting relations with India is self-serving, as it is calculated to play to China’s strenghts and side step India’s concerns.

After ruling out a border settlement, the Chinese President proposes that the two countries cooperate to maintain peace and tranquillity. This is singularly unimaginative as the two are maintaining peace and tranquillity for the last two decades, following the relevant agreements of 1993 and 1996.

When President Xi proposes that border differences shoud not affect the overall relationship, he is only nodding at existing realities. The bilateral relationship has progressed tremendously despite Chinese periodic provocations, such as those laying claim to Arunachal Pradesh and describing it as “South Tibet”, protesting the visits of our political leaders there, shortening the length of the Sino-Indian border in a bid to question India’s territorial sovereignty in the eastern and western sectors, giving Kashmir-linked stapled visas etc.

These provocations have been one-sided. Notwithstanding them, our Prime Minister has met China’s leaders oftener than others; we have a strategic dialogue with China at political, economic and defence levels; our armed forces now conduct joint exercises, albeit limited. The two countries engage with each other in the Russia-India-China format, that of BRICS and G-20, apart from collaborating in WTO and climate change negotiations. Now China has proposed a dialogue with us on Afghanistan, which we have welcomed.

In proposing that differences over the border should not affect the overall relationship, President Xi wants to preserve the freedom to continue provoking us and undermining our interests in our neighbourhood, as the latest strategic decision to take over Gwadar demonstrates. His proposal that India should maintain close strategic communication in order to keep bilateral relations on the right track excludes any explanation from China about its strategic ties with Pakistan, its continuing assistance in building Pakistan’s nuclear capability, its opposition to our joining the Nuclear Suppliers Group and our permanent membership of the Security Council, etc.

Telecom

President Xi calls for harnessing each other’s comparative strengths and expand mutually beneficial cooperation in infrastructure, investment etc. India has comparative strength in Information Technology and pharmaceuticals for instance, but it faces hurdles in accessing the Chinese domestic market. China, on the other hand, has become India’s largest trading partner in goods despite our unsustainable trade deficit with it. Chinese telecommunication and power companies have bagged huge contracts in India despite serious cybersecurity concerns. China would like to have a share of the $1 trillion we intend investing in upgrading our infrastructure in the next 5 years, especially when it has huge unutilized capacities in this sector and opportunities abroad are declining because of a global slow down. It can use its financial strength to advantage in countries like India if the politics can be managed. Unsurprisingly with the border issue “effectively controlled”, the People’s Daily advocates more focus on trade and multilateral issues with India.

President Xi’s emphasis on strenghtening cultural ties is unobjectionable. Enhancing cooperation in multilateral forums to safeguard the legitimate rights and interests of developing countries in tackling global challenges- another point that President Xi makes- is desirable although China has hardly championed the rights of developing countries in the past, though today its hunger for natural resources and markets accounts for a different stance.

Concerns

When the Chinese President says that the two countries should accommodate each other’s core concerns, the hard kernel of his message becomes evident. India has never identified its core concerns to the international community or to China bilaterally. Consequently, President Xi is not talking about China accommodating India’s stated core concerns. In any case, whether in the case of transferring nuclear and missile technologies to Pakistan, undermining our position in our neighbourhood, whether in Nepal, Sri Lanka, Maldives or Bangladesh, China disregards our obvious core concerns.

The Chinese leader is expecting India, in a one-sided proposition, to accommodate China’s core concerns, evidently in South China Sea and Tibet, as Taiwan and Sinkiang are not contentious issues with us. China wants its sovereignty over these areas to be respected, while using Tibet to claim Indian territory and expanding its presence in territory under Pakistan’s illegal occupation in J&K.

We have chosen to interpret President Xi’s remarks positively. We possibly believe that we are in control of our relations with China, that China is reaching out to us and we must therefore seize this opportunity to explore the potential of the bilateral relationship. We are disregarding hard realities and confusing China’s tactical moves with its strategic intent. President Xi has signalled that China will not compromise on territorial issues, whether today in the east with others and tomorrow in the west with us.

Importance of India

Kanwal Sibal 

(Member, VIF Advisory Board)

The back to back visits of French President Francois Hollande and British Prime Minister David Cameron to India in February call attention to the European dimension of our foreign policy. many in our establishment have a tendency to dismiss the importance of Europe.

It is argued that Europe is trapped in low growth structurally, its population is ageing, its welfare syatem is becoming unsustainable, its products are not sufficiently competitive, it has reached a alevel of comfort that makes reforms difficult, it has lost its edge in innovation, its defence capacities have got eroded with the decline in defence budgets and peace in the continent. The Eurozone crisis has strengthened the already negative perceptions.

Such thinking is fed by the conviction that global economic power is shifting from the West to Asia, and along with that political and military equations are also changing. Sooner or later, it is believed, the US/European hold over international political and economic institutions will be loosened. On the issue of “values”- those of democracy, pluralism, human rights and the like- both the aggressive manner in which US/Europe propagate them and the double standards adopted in this exercise has eroded their appeal, not to mention that China’s economic success in moving hundred of millions out of poverty under an authoritarian regime offers a competing model for numerous countries that have no tradition of democracy and no attachment to it.

India’s own high growth rates in the last few years, the transformation of its image from a poverty stricken country to an engine of growth for the global economy hit by recession, the bracketing of India with China in economic discussions in the perspective of these two countries steadily recovering their share of the global economy which was lost to Europe after the 16th century, the projections that India will become the third largest economy in the world by 2030, has led to the development of a certain world view in which Europe no longer looms as large as before. The US still retains its hold on the mind of those looking at India’s future.

Despite its current financial and economic troubles, it is believed that the US is still capable of innovation and that its recovery will be quicker than that of Europe. US military strength and its presence in all regions of the world also gives assurance that through good understanding with it many of the challenges India faces can be met or alleviated, whether that of terrorism or the threats posed by the rise of China. Europe, militarily dependent on the US, is not considered as a potent enough partner in this and hence a certain amount of disdain for the value of the strategic relationship with it.

Some commentators are presumptuous in arguing that for France, for instance, “to become a partner more in synch with a new post-liberalisation India, the key would be to make itself meaner and leaner at home”, a reference to hard decisions it needs to take on welfare costs and government spending. It is not clear whether with some 300 millions below the poverty line, urban decay, inadequate sanitation and the anguish in the country about poor governance we can smugly refer to the “new post-liberalisation India”.

Our declining growth rates, large fiscal deficit, expanding current account deficit, the fall in the value of the rupee, are problems we need to address urgently before we are in a position to give lessons on economic management to Europe. Sniping at the French economic model that is ceaselessly attacked by the Anglo-Saxons who believe in less government, less regulation and weak trade unions hardly clarifies the debate on the Indian situation and the economic and social policies we should pursue. It is not clear where calls for “inclusive growth” in India figure in the thinking of those who find continental Europe’s welfare model incompatible with the new Indian economy.

Europe, in which France and the UK are key countries, is our biggest trade and investment partner as a whole. It is for this reason that the crisis in the Eurozone has affected us, whereas we were able to weather better the impact of the 2008 financial crisis in the US. France and the UK are the world’s fifth and sixth largest economies. To believe that our economic ties with them can be neglected is being myopic. Both countries have much to offer us by way of high and advanced technologies, both civil and military; they provide markets for our products; two-way investment flows are important for our growth and for Indian companies to acquire assets that would strengthen their international profile and make them more competitive globally. In the WTO negotiations and those on Climate Change and the linked issue of green and carbon technologies, both countries are undeniably important. In the India-EU negotiations on a Free Trade Agreement, the role of these countries cannot be under-estimated, which is why during both visits India has called for a broad-based and balanced agreement in 2013.

French President Hollande chose India as his first destination in Asia and arranged to come early into his tenure. He wanted to signal that France attached high importance to its relations with India, more so the upsurge in the relations at the strategic level occurred during the presidency of his two predecessors belonging to the Gaullist tradition. As a Socialist president he wished to signal continuity in the relationship. There is good reason for France to focus on India as opportunities are immense for French equipment and products in an emerging market like India, with a growing middle class avid for consumer goods, with an industry in need of modernization and technological upgradation and an infrastructure desperately requiring improvement for which the government plans 1 trillion $ of investment in the next five years.

French economic presence in India is already considerable. The level of two-way trade at Euros 8 billion is not high. The target set in 2008 to double the trade then to Euros 12 billion by 2012 has not been met. French economic troubles and lower growth in India will not make it easy to increase trade volumes dramatically. On the investment side, while official figures show $3.5 billion French investments in India and $300 million Indian investments in France, the real figure of French investment, if investment from all sources by its global compnaies- from Mauritius, Singapore etc- is taken into account and not only mainland France, the figure is an impressive 17 billion.

A similar study of Indian investments in France would show a different figure, though it can be said that French regulatory requirements and labour laws discourage Indian investments in France as compared to the UK, for instance. The problems faced by Laxmi Mittal’s steel business in France could not but have dampened enthusiasm, though the fall-out from the issue seems to have been contained. Some 750 French companies are impanted in India, employing around 240,000 skilled workers. Much R&D work is being done by companies like Lafarge, Alsthom, L’Oreal, Cap Gemini, STMicroelectronics etc. France has strengths in the areas of urban development including infrastructure, water and waste management, transport and urban planning, apart from railways, and the president’s visit focused on them.

The civil nuclear dimension in Indo-French relations is of particular importance. The Jaitapur Nuclear Power Project, when finalized, will crown the constructive policy France has pursued on the nuclear issue involving India within the constraints imposed by the western policy of sanctioning India for non-adherence to the NPT, cultivating the ground for the eventual NSG exception for which the US palyed the most critical role. The new 1650 French EPR reactors, six of which will be located at Jaitapur, have undergone an intensive safety review after Fukushima, to India’s satisfaction. The issue of cost remains and so far there is no closure. Ways to reduce costs by manufacturing some components in India have been explored. Our effort is to bring the tariff figure as close as possible to the Kudankulam 3 and 4 tariff; there is also the issue of periodic escalation of cost of French supplies whereas the Russian deal is on a fixed price basis.

Hollande would have ideally wanted some demonstrable progress in negotiations in the context of his visit. The positive language of the joint statement would have given some satisfaction to the French, as it states that the status in regard to the first two EPR units was reviewed and the hope expressed for an expeditious conclusion of the negotiations. The Prime Minister in his joint press briefing stated reassuringly that “both leaders reviewed progress on the Jaitapur Nuclear Power Project and reiterated their commitment to its early implementation as soon as the commercial and technical negotiations, which have made good progress, are completed”.

Indo-French defence cooperation has been long-standing, with France supplying over the last almost 60 years a whole range of defence equipment. Our relationship with France in this sensitive domain has been time-tested, with France proving a reliable defence partner. France nevertheless has to contend with strong competition, not only from fellow Europeans, but also the Israelis and the Americans. Winning the 126 fighter aircraft contract against the Eurofighter has been a remarkable French success. Resistance from the British has not ended though, as they still look for an opportunity for re-entry should neogiations with Dassault falter.

It is believed that Cameron had intended to flag Eurofighter’s case to the Prime Minister, but statements during Hollande’s visit that contract negotiations were proceeding smoothly may have deterred him. The French had been told in advance of Hollande’s visit though that the Rafale contract would not be ready for signature. The French president would have wanted some statement from our side during the visit that would give him assurance of progress towards finalization, which he got in the joint statement that mentions that “both sides noted the progress of ongoing negotiations on the MMRCA programme and look forward to their conclusion”. PM’s statement to the effect that “discussions on the MMRCA contract are progressing well” would have added to the satisfaction.

The French could have legitimately hoped that at least the finalization of the much delayed SR-SAM project would be announced during Hollande’s visit. Here too the French had to live with disappointment, though the positive language in the joint statement- “steps are being taken for early finalization of the SRSAM Project”- would have been re-assuring, as would have been PM’s statement that “we have also concluded negotiations on the Short Range Surface to Air Missile, which, once approved by the Government, will be co-developed and co-produced in India”. The PM noted addditionally that “there is a welcome shift from defence trade to co-development and co-production of advanced defence items in India, which will help expand our domestic production base and strengthen the India-France strategic partnership”.

In the domain of space, another significant area of Indo-French cooperation, the next step after the successful launch of the SARAL satellite is the ambitious follow-on space cooperation proposals drawn up the respective space agencies in early February, which the Indian side expects should open up prospects for exchanges in satellite technology. Hollande’s visit focused considerably on education and scientific and technology cooperation. About 16 agreements were signed in these areas. France will be the partner country for the 2013 Global Technology Summit to be held in New Delhi. The French are keen to increase the number of Indian students in France and vice versa as the economical/commercial advantages of this is recognized, by Hollande himself in his public remarks.

Cameron’s visit followed closely on the heels of that of Hollande and therefore invited comparison. The UK possesses a wide range of defence technologies and cooperation in this area is considerable. However, unlike France which is building submarines in India and huge aircraft and missile programes are under discussion, besides being a contendor for a major helicopter contract, the UK is not involved in such big ticket programmes. It does not have nuclear reactors to offer, nor is it involved in space cooperation with India.

The “strategic” content of its ties with India is therefore less substantial. During Cameron’s visit it was decided to begin negotiations on a civil nuclear agreement. It was also agreed to step up cooperation between DRDO and the UK Defence Science and Technology Organisation, already agreed in september 2011, but it would seem visas have been denied to DRDO scientists because of the work DRDO does on strategic programmes.

Unlike France, which is relatively more liberal in technology transfers, the UK has been restrictive and this has to change to boost technological coopertion. Cameron committed the UK to make available to India the cutting edge British technology, civil and military, that the UK currently shares with its top international partners, but it remains to be seen how much this gets translated into reality.

On a more positive side, the co-investment made by both countries in supporting joint research activities has risen from £1m in 2009 to over £100m today with advanced manufacturing, bio-energy, smart grids, energy storage, next generation wireless systems and applied mathematics as areas of collaboration. The energy sector including oil and gas, renewable energy, energy efficiency, the power sector, low carbon technologies are areas identified for fruitful exchanges, with India welcoming the substantial British investment in its energy sector.

On the economic side, while preparing for Cameron’s visit, it was thought that a signature project such as the Mumbai-Bangalore industrial corridor for British investment was needed for creating a real impact. India has been interested in British investment in its infrastructure, for which a joint Infrastructure Committee set up in 2011 has not produced much result so far.

Sceptics in India have felt that the economic crisis in the UK hardly gave hope of any major UK investment. Cameron actually spoke of British architects, planners and designers for the project, not the kind of financing made by the Japanese in the DMIC. In the event this signature project was treated in highly non-committal language in the joint statement as well as our PM’s statement, which said, repectively, that both leaders “noted the UK’s interest in cooperating with India for the development of a new Bengaluru-Mumbai Economic Corridor (BMEC). The leaders agreed to examine and evolve the modalities and content of a feasibility study of this project concept through mutual discussions and to work out a roadmap for a possible partnership in this area” and that “ we have asked our officials to explore British participation in India’s National Manufacturing and Investment Zones and in a possible industrial corridor in the Mumbai-Bangalore sector”. This is verbiage indeed.

The UK has strength in services and Cameron’s accent was on them as a driver for enhancing India-UK exchanges. While he promised to further reduce barriers for Indian investment in the UK, he wanted India to reduce barriers for British architecural, legal, accountancy, financial and banking services. He emphasized UK’s interest in the education and health sectors ( an over-arching MOU at the government-to-government level was concluded to strengthen cooperation in this sector), noting that India’s 500 million people under the age of 25 had to be educated and British educational institutions were open to them.

To set at rest concerns about UK’s immigration and visa policies, he emphasized that there was no limit to the number of Indian students going to Britain and doing graduate jobs. He also promised same day visa services for Indian businessmen to attract more Indian investment in the UK, noting that 50% of Indian investment in Europe was in Britain. In the field of investment, UK is India’s 3rd largest FDI investor country with over $ 8 billion of investment in the last six years. India is the 5th largest investor in the UK, with Cameron pushing them to invest more and signalling that the British did not believe in “economic nationalism”. About 700 Indian companies are operating in the UK, with the Tata group being the largest employer. The UK is the largest market in Europe for Indian IT services.

On political and security issues there was considerable parrallelism in the documents issued at the end of the two visits. Both leaders reiterated support for India’s candidature for permanent membership of the UN Security Council as well membership of the NSG, the MTCR, the Australia Group and the Wassenar Arrangement, the four export control bodies. With both countries enhanced cooperation in cybersecurity and counter-terrorism was underlined. Terrorism was deplored strongly and Pakistan asked to expeditiously try those guilty of the Mumbai terrorist attacks. The constitutional principles on which the inter-Afghan dialogue should be conducted was stressed during both visits. This was important for India in the case of the British who are seen as pushing for accommodating the Taliban in the power structure in Kabul and being insufficiently transparent with the Indian side. It is in this context that with the UK it was agreed to established a new Joint Working Group for a regular bilateral dialogue on peace, security and development in Afghanistan.

Where there wasn’t parallelism was in India and the UK expressing their commitment to working towards a world free of nuclear weapons and holding regular consultations on disarmament and non-proliferation issues. The French haven’t joined the bandwagon of Global Zero and hence this subject did not figure in the documents issued during Hollande’s visit. Surprisingly, the joint document with France did not speak of Syria and Iran, whereas in the case of the one with the UK, called, significantly, for a peaceful resolution of the Iranian nuclear issue.

In the case of Mali, India supported action against terrorists there, earning Hollande’s public appreciation of this support for French military action. It is not surprising that India and France reaffirmed their independence and strategic autonomy, a language understandably missing in the joint India-UK statement given UK’s strong commitment to Nato and its trans-Atlantic ties. India and France agreed to establish an annual bilateral dialogue between the two Finance Ministries on economic and financial issues, but no such dialogue was instituted with the UK. Finally, our PM conveyed his very serious concern to Cameron regarding allegations about unethical means used in securing the 2010 contract for Agusta Westland helicopters. The eruption of this scandal was untimely for the Cameron visit.

All said and done, both visits were successful. No major agreements were announced during these visits and to that extent they lacked dramatic outcomes. The visits were more an expression by both leaders of a their desire to invest in the India relationship in a longer term perspective. Cameron exuded a lot of goodwill for India, rather earnestly, and so did Hollande in his own style. France has no history to live down in India, unlike the UK, which makes the relationship with France easier to handle psychologically. India has been offered political and economic space by both countries to capitalize on. We should play our hand intelligently and derive the maximum benefit from these important bilateral relationships with two of the world’s leading powers. However important the US may be, the importance of Europe should not be minimized, especially at a time when India is in transition and needs as many partners as possible for securing a bright future.

Giving Delhi Some Parisian Delight

Kanwal Sibal 

(Member, VIF Advisory Board)

France was first to offer a strategic dialogue after our 1998 nuclear tests, forswear sanctions and announce a “business as usual” policy towards India. This remarkably pragmatic position, surpassing the acute international anxieties of the moment, demonstrated its longer term strategic view of India’s role in the world. It is this solid investment in a strategic relationship with India that gives particular value to president Hollande’s visit that begins today.

India is the first Asian country that he is visiting and he wishes to maintain the momentum imparted to bilateral ties by his predecessors from a different political camp, more so as global economic and political power is steadily shifting towards Asia. India, despite the current slump in its growth, remains a choice partner because of the size of its economy, future growth projections, entrepreneurial talent and opportunities materializing from external capital, technology and flow of know-how.

Indo-French bilateral trade at almost Euros 8 billion remains considerably short of the targeted figure of Euros 12 billion by 2012, but the overall economic relationship appears larger than what official statistics indicate. If the total investments of French companies from all sources are calculated, the figure jumps from $3.5 billion to an impressive $ 17 billion. French companies employ 250,000 Indians, with several doing extensive R&D in India, a fact insufficiently known. Infrastructure, energy, food-processing, urban development, hi-tech and green technologies provide untapped business opportunities, as do cooperative ventures with French companies that are global private public partnership leaders in the field of highways, water and waste water, ports, airports and power, which are areas of focus for the Indo-French CEOs Forum.

All such high level visits raise expectations about “deliverables”- in this case the finalization of the contracts for 126 Rafale aircraft and for French-supplied nuclear power reactors at Jaitapur. Commercial negotiations in both cases will take time, but not inordinately, so the president would hope. The Rafale contract tops 60 years of a prolific bilateral defence relationship, with supplies of aircraft, tanks, helicopters and missiles in the past, a current submarine project, and joint development and manufacture of the surface to air missile Maitri in the offing, all proving that France is considered a reliable partner.

France’s willingness to work within the rules framed under our nuclear liability act is important as an inducement to other suppliers. France has confirmed publicly its readiness to transfer enrichment and reprocessing technologies, underlining that amongst western countries France is the least restrictive in terms of transfer of sensitive technologies. In space, an area in which we have benefited from French cooperation, an agreement has been reached to launch another jointly developed satellite, “Saral”.

India values its friction free relationship with France that raises no concerns about being dominated or clapped into unequal obligations. Remarkably, India’s relations with France have higher comfort levels than those with other western powers despite its strong support for the controversial doctrines of humanitarian intervention that was demonstrated by its activism in Libya and now Syria. On these countries and Iran, India’s views and interests differ, but without any contentiousness. A strategic partnership does not, of course, mean a commonality of views and interests across the board, more so between a developing country like India and a highly developed, industrialized country like France which has enjoyed great power status for long and is a permanent member of the UN Security Council, a Nato member and a pillar of the European Union. On climate change and WTO issues Indian and French positions, understandably, differ.

Watching Islamic extremism in Libya, with spill-over into Mali, and polarization in Egypt caused by the Muslim Brotherhood, India doubts the wisdom of encouraging extremist religious forces to overthrow Syria’s secular regime. The strategic vision of India and France in this regard has developed a gap which needs closing as the epicenter of such forces, backed by nuclear capability, is still in our region, and the gravity of the threat can escalate all round with efforts to accommodate the Taliban in Afghanistan, an enterprise that France too is discreetly encouraging. All these issues, along with the implications of China’s rise and the situation in Pakistan, would undoubtedly get discussed usefully during the president’s timely visit.

Dealing with the Neighbour from Hell - The Prime Minister Must Not Visit Pakistan

PP Shukla (Joint Director, VIF)

To the insistent clamour that Prime Minister Manmohan Singh must visit Pakistan in the near future, this is a rejoinder, and a plea not to be emotional in our approach to relations with Pakistan. An analysis of the argument in favour of a visit shows that there are really three arguments being advanced in favour of the visit.

The first is that the time is now for an outreach to the people of Pakistan, for it is up to India to strengthen the forces of moderation at a time when that country is wracked by extremist sentiment. The second argument, closely related to the first, is that the decision makers in Pakistan are becoming aware of the dangers their country faces, and are ready to move forward and improve relations with India. Some erudite commentators add a third argument in the form of a history lesson: Europe overcame its problems through economic cooperation, and that is how the two countries should overcome their problems. It worked there, it will work again here.

The idea of an outreach to the “moderates” inside Pakistan is not new. This is exactly what guided Indira Gandhi at Simla, and it was not long before she realised that she had misjudged badly. Within a few months, Bhutto was back to the earlier rhetoric, and denying that any understanding had been reached over Kashmir. Even then, he was also thrust aside, and the proxy war in Punjab started shortly after Gen Zia took over. All our efforts at strengthening the “moderates” were unavailing.

Prime Minister Gujral – may his soul rest in peace – took this further when he became first Foreign, then Prime, Minister. The Gujral Doctrine was specifically aimed at strengthening these “moderates”, and it did not do much for the relations, as Pakistani sponsorship of terrorism continued unabated. It did nothing the “moderates” either, who were again thrust aside as another military dictator took over in 1999.

This time round, the ground reality of Pakistan is even more adverse for such woolly-headed overtures. The military may be somewhat weaker, but that proposition has not been tested. After the removal of Gen Karamat, there was a sense in India again, that the army had been brought under control, an assessment that was buttressed by the weakening of the army after the Kargil fiasco. But more important, even if the army is reluctant to take over formal power, it remains strong, and continues its role in upholding the terror infrastructure. The infiltration of terrorists into India also continues at higher levels than before. Further, the growing radicalisation of Pakistani society, and the growing power of the jihadi network, calls into serious question the notion that the “moderates” are now in a position to make a difference. The fact that the judges who sentenced some of the high-profile killers in recent months had to go into hiding, and sometimes leave the country, tells a very different story from the narrative of those who want the visit to take place. The plight of the Hindus, Sikhs, Christians, and even the Shias is further compelling evidence of the real changes that are taking place inside Pakistan.

Finally, even the so-called moderates are not the kind that are willing to let the Kashmir issue drop. No, the difference is that they want to talk and settle the Kashmir issue on their terms; their only difference is that they are willing to criticise the use of terrorism for this political end. But their end is the same as that of the hard-line elements. Nobody is even willing to countenance any kind of territorial settlement that would stand a chance of acceptance in India.

The second argument is that there is a change in Pakistani thinking and policies towards India. This boils down to two developments in recent months. The first is a statement made by the Pakistani Army Chief on Siachen. It is worth emphasising that he made these remarks while visiting – not Siachen, for the Pakistan Army is nowhere in Siachen, but west of Saltoro – where an avalanche had led to the death of some 130 soldiers. Pakistanis were asking why the soldiers were there and why they could not be pulled back to safer distances. Here are the actual words he spoke: “…we’d like to resolve this [Siachen], but there is a method of resolution and of course, we’ve talked about it, there have been a number of rounds of negotiations and hopefully we should be able to resolve it, and I think we should resolve it.”

Our response at the media level was inexplicable: not only did the General say nothing new, his own words indicated as much. He said clearly that there was a method, and it should be used to resolve the issue. This is precisely what we were doing, in the resumed dialogue. There has been a solution in the works for more than two decades, and it has foundered each time on the Pakistani insistence that it will not reflect the actual position held by the troops at present. This itself reflects and suggests bad faith on their part, especially bearing in mind that as early as 1989, then-Foreign Minister Yakub Ali Khan had agreed that, as a military man, he recognised that any troop withdrawal must indicate where from the withdrawal was to take place.

The other issue that has had excessive play has been that of Most Favoured Nation [MFN] treatment for Indian exports to Pakistan. Since the beginning of the year, there has been a clamour in India that this has been done by Pakistan. Of course, nothing of the sort has happened yet, and the promise is that it will happen at the end of the year. Meanwhile, a Pakistan parliamentary panel, headed by a ruling Party MP, has recently recommended against such a move by Pakistan. True, the two countries have moved from a positive list to a negative list, but there is nothing in this that allows Indian goods entry into the country on terms equal to those for other trading partners. In any case, Pakistan is obliged, under WTO rules, to treat Indian exports on MFN terms, but has refused to do so for close to two decades, even though we have given Pakistani exports MFN treatment since the mid-1990’s. This actually shows the scant regard it has for its obligations under even international treaties. It is entirely characteristic of us that we find this a major step forward. Firstly, it has not happened; moreover, it is not a major step anyway.

So much for the signs of change in Pakistan; the other two matters are easily disposed of too. The idea of reaching out to the so-called moderates inside Pakistan is not new. Foreign Minister [later Prime Minister] Gujral, whose sad passing away we have just marked, had just this idea behind the Gujral Doctrine. He did occasionally say that the Doctrine did not apply to Pakistan, but this was only with regard to the principle of non-reciprocity; but in his words and actions, he was always mindful of the possible constituency in favour of better ties with India within Pakistan. Since then, we have maintained a steady posture of nurturing this constituency, through the Vajpayee and the Singh Governments. Under the latter, we even signed some incomprehensible joint statements on setting up a joint terror mechanism, and allowing a gratuitous reference to Baluchistan – all to no avail. If there is a “moderate” group in Pakistan, it is unable to affect policy. From the days of the Gujral Doctrine, right through to the present, we have had terrorist attacks to contend with without cease: from the Kandahar hijacking through the attack on Parliament, attacks in various cities [Bangalore, Delhi and Mumbai], and finally, the carnage in 2008. And on all of these, the Pakistanis have stonewalled any move to bring the terrorists to book. All told, one would be well advised to question whether there is any relevance to this thesis today, given that the extremist elements are much stronger than before, as we saw in the killing of Governor Taseer and Minister Bhatti – their killers were regarded as heroes even among educated middle-class sections of Pakistani society. We are also witnessing the growing terror attacks on the minorities in Pakistan.

The proponents of the outreach to the “moderates”, therefore, owe it to Indian society to explain why they still persist in this failed enterprise, and when the rest of us will see any results of the Sisyphean undertaking. They owe it to the skeptics, who have historical evidence on their side, to tell us when their efforts will bear fruit, and what the milestones are that will tell us we are on the right track.

Finally, we have to address the European parallel. It is true, of course, that economic cooperation has transformed relations on the Continent, making war unthinkable. But there was a pre-history to this. The Nazi regime was first defeated, Germany dismembered, and the leaders brought to rough justice. A new Government arose in place of the Nazi regime, which disavowed, and negated on the ground, Nazism and all its works. Equally important, it renounced its claim to Alsace-Lorraine, the territorial dispute with France. It was only after all this that the economic cooperation was launched successfully.

There were earlier efforts at sweet-talking and making territorial concessions to the Nazi regime, in the 1930’s, but they came to naught. This policy of appeasement has been properly consigned to the litter of failed strategies, and has served as a warning to all future Governments that this is a very unwise policy course. This is the true lesson of European history. Those who forget it, would do well to remember how the West reacted to the election of Kurt Waldheim as President of Austria in the mid-1980’s: there was a whiff of suspicion – never conclusively proved – that he had a Nazi past, and that was enough for him to be boycotted by many western countries, and he was declared an undesirable alien in the US.

This author had made some of these points in a letter to the editor of the Indian Express, in response to a particularly fatuous article urging the Prime Minister to visit Pakistan, but the paper chose not to publish it – though it did carry much more abusive letters against the suggestion. Obviously, the idea is to paint the objectors as extremist and unthinking opponents of better ties with Pakistan.

The reality is that Pakistan is growing increasingly isolated as US disenchantment with their duplicitous ways grows. The fear in that country is that India and America might find it in their interest to coordinate policies on Pakistan, especially as the ISAF moves to pull out from Afghanistan. It would be rich irony if, after decades of asking the Americans to take a hard look at the reality of Pakistan, we were to hold out a lifeline to that country now. It would also be a betrayal of the assurances given to the people of India that the terrorist masterminds of the Mumbai attack would be brought to justice, and there would be no normal contacts until then.

Instead, we are advised by the Pakistan Foreign Minister not to be emotional and to move on beyond one issue. It occurred to no one, then or later, to point out that it was Pakistan that was being emotional about Kashmir, and was fixated on an issue that has been left behind by history, despite every terrorist trick in the trade adopted by Pakistan.

The ultimate irony is that, despite all the efforts by successive Governments – NDA not excepted – to reassure Pakistan that India does not mean any harm, few in the former believe our protestations. Here is a sample from an article in Nation, the Pakistani newspaper:

“The Indian leaders have on many occasions predicted and wished for Pakistan’s collapse. We keep hearing across the border voices demanding the re-inclusion of Pakistan into India. It is no secret that India has not only engineered trouble in Pakistan, but also instigated USA to hurt us whenever possible. Right after the Osama incident, the Indian leaders also aired their desire to take unilateral actions into Pakistan. India’s intentions are not a secret.” [Nation 23 Oct 2011].

Indian leaders have consistently maintained that we have a vested interest in a strong, stable, united Pakistan, and have repeated this sentiment in season and out. But it obviously does not make any impression on some of important media outlets in Pakistan.

It must be clear to all unbiased and uncommitted observers that there is nothing for the Prime Minister to do in Pakistan, and nothing to go for.