Book Release: “Black Money and Tax Havens”, authored by Professor R Vaidyanathan

On 3 November 2017, the Vivekananda International Foundation (VIF), New Delhi, hosted the launch of Professor Ramachandran Vaidyanathan’s latest book titled ‘Black Money and Tax Havens’. Professor Vaidyanathan is Dean of Centre for Economic Studies at the VIF and a former professor of Finance at the Indian Institute of Management, Bangalore. He is well known for his extensive works on finance, especially in banking, insurance and capital markets. The Book Release saw an intensive discussion among learned panellists including Shri Swaminathan Gurumurthy (a renowned economist and a political analyst), Dr. Bibek Debroy (Chairman, Prime Minister’s Economic Advisory Council) and Shri Mahesh Jethmalani (Senior Advocate).

Shri Gurumurthy correlated the mutually reinforcing relationship between black money and corruption that ails the political and economic sphere in India. He mentioned that the first committee to study black money in India was formed under Shri Ajit Doval (National Security Advisor), Professor Vaiyanathan and him. He outlined how the 2008 global financial crisis had led the G-20 countries to consider black money as a serious global threat. Dr. Bibek Debroy noted that Indian economy is largely informal and thus cash transactions are obvious. However, despite considerable digitization, the cash to GDP ratio had shot to 13 percent in 2016 from 9 percent in 2000, making it larger than some of other South Asian countries. He also asserted that post demonetization; India saw a marked rise in foreign travel. Dr. Debroy mentioned that Indian government would mark November 8, 2017 as ‘Black Money Day’.

Shri Jethmalani emphasized that lack of legal tools had led to a growing modus operandi in money laundering, especially to tax havens abroad. He stated that demonetization had prominently affected black money inside India, but large amount of the money stashed abroad remained unaudited. He proposed there was great need to pursue stronger international cooperation to get full list of foreign accounts with black money and also at large publish names of tax evaders. Professor Vaidyathan stressed the need for effective judicial reforms to deal with black money and discharge swift and effective justice. He underscored the need for severe punishment and the urgent priority of re-establishing confidence in Indian economy.

Event Date: November 3, 2017

Some Bold Ideas from Mr. Purno Sangma

A. Surya Prakash

The former Lok Sabha Speaker Mr. Purno Sangma has recently flagged some weighty issues which are extremely pertinent in the context of the crisis of governance in India, the declining influence of national parties, the decay of institutions, the fractious nature of coalitions and the precipitous fall in the prestige of the office of prime minister.

Some of these issues figure in his book A Life in Politics, which was released by the Vice-President Mr. Hamid Ansari on April 10. They have also been dealt with in a more elaborate manner in a lecture he delivered a fortnight ago at the VIF on ‘The Functioning of Parliamentary Democracy in India’. All these issues are inter-related. With the people opting for diverse political choices across the country, the two national parties that are at the core of the two main coalitions have got weakened. They are now facing greater pressure from regional players within their coalitions and outside. This in turn has injected instability into the coalitions and produced a crisis of governance. The ruling United Progressive Alliance at the Centre is now a pale shadow of the sturdy coalition that ruled this country between 2004-09 and the prime minister no longer exercises the power and authority that he did some years ago. For a politician like Mr. Sangma who has a strong nationalist streak and a desire to pool political and intellectual resources available in the country to try and stem the rot, this is the time to speak up and to press for action. He also offers some out-of-the-box prescriptions that could, especially in a deteriorating social and political environment, gain ground.

The weakening of the office of prime minister is on top of Mr. Sangma’s agenda. He is very clear that the prime minister must be a member of the Lok Sabha – a person who is directly elected by the people to the House. He does not favour Rajya Sabha members becoming prime ministers, because when that happens the authority and legitimacy of the office stands weakened and the prime minister remains beholden either to the leader of his party or to the leaders of a coalition who have together chosen to install him. Mr. Sangma says that under the Constitution, the Union Cabinet headed by the prime minister can survive in office only so long as it commands the support of the majority in the Lok Sabha. Therefore, it makes sense to have a prime minister who is a member of that House. Also, is it not absurd to have a prime minister who cannot vote on behalf of his government in the Lok Sabha!

In the preface to his book A Life in Politics, which is a collection of his speeches, Mr. Sangma dwells on the decline of institutions. He says: “Our institutions are in a state of decay. I am particularly worried about the institution of prime minister. I strongly feel that the prime minister being subjugated by an extra-constitutional `super’ authority is a dangerous precedent. Without any personal bias, I also feel that since India is the largest democracy, it would be in the fitness of things if the prime minister is elected by the House from members of the Lok Sabha. We should also start thinking and debating the desirability and possibility of electing the prime minister directly by the people. With a population of more than 1.2 billion people, India is capable enough of producing an able prime minister”.

Mr. Sangma elaborated on this theme at the VIF lecture on March 31. Over the last 16 years, there have been several instances when the Lok Sabha has failed to throw up a prime minister, he said. In 1996, a chief minister (Mr. Deve Gowda) was chosen for that office. In 1997, it was a member of the Upper House (Mr. Gurjal) and again from 2004 onwards (Mr. Manmohan Singh). During these periods, no member of the Lok Sabha was considered to be qualified for the job. He feels so strongly about it that he says the Constitution should be amended to achieve this objective.

As regards no-confidence motions, Mr. Sangma suggests that we adopt the German system of a constructive vote of no-confidence, meaning that the Lok Sabha can vote out a prime minister only when it has a successor in place. “We can perhaps consider the feasibility of adopting the German model of constitutional/legal provisions for constructive Votes of No Confidence. Under this model, the parliament may express its lack of confidence in the head of government only by electing a successor by the vote of a majority of Members and requesting the President for the appointment of the successor”.

Next, Mr .Sangma talks of coalition politics and federalism. In his view, the functional efficiency of a coalition government will largely depend on whether or not the coalition has put in place coordination mechanisms to “manage” contradictions. He says governance through coalition arrangements has more or less become the order of the day in the multi party system. “In the current (15th) Lok Sabha, forty political parties have their presence. As of now, the present UPA II coalition consists of 11 parties and is supported from outside by 9 parties. Running the government by coalition formations like this is like running a handicapped race. The government gets to be hamstrung in taking effective policy/reform measures”.

Mr. Sangma says coalition partners have their regional, local and ideological agendas which they are often unable to harmonize with the overall coalition programme. While the Government tries to ventilate its helplessness by referring to "coalition compulsions," the constituent partners complain of violation of "coalition dharma" by the government. The success of a coalition will therefore depend on what late Prime Minister V.P. Singh characterized as "management of contradictions". This is feasible only if coordination mechanisms are perfected and made functional within a ruling coalition.

Following the recent elections to five state assemblies, which saw a further fall in the vote share of the Congress and the Bharatiya Janata Party, especially in Uttar Pradesh, the regional parties have got further emboldened. The mushroom growth of regional parties has inflicted considerable damage on governance and encouraged the politics of blackmail. How does one resolve this? Mr. Sangma says that the idea that only national political parties should be allowed to contest parliamentary elections, could be explored.

Even more significant is his view on what the national parties should do in the present circumstances. The biggest problem right now is that there is a crisis of leadership. India no longer has an acceptable national leader and the two main national parties are on the decline. The plight of the Congress and the BJP is a matter of concern from a national point of view; he says and hopes that they will become stronger. Meanwhile, there could be a “temporary solution” – the Congress and BJP agreeing to share power and to provide a national government.

Mr. Sangma also focuses on two other issues which are generic in nature. The present electoral system – the-First-Past-the-Post system - has its flaws. In many instances, because of the multiplicity of parties and low voting, candidates who have polled the highest votes but have lost their deposits are declared elected. This system needs a fresh look. Compulsory voting may resolve this problem, but this must be implemented alongside the demand for voters to have the right to reject all candidates, if they wish to.

A clutch of bold ideas from a former Speaker of the Lok Sabha, among them: a power sharing arrangement between the Congress and the BJP to shake off “political blackmailers” and whimsical coalition partners; a prime minister who is directly elected by the Lok Sabha or the people; a constructive vote of no-confidence; institutionalised arrangements for coalition management; compulsory voting alongside the right to reject all candidates. Any takers?

Author is Senior Fellow in Vivekananda International Foundation

Setting up a Central University: Vision, Issues and Debates

Anirban Ganguly

Though the setting up of a Central University is the prerogative of the Union Ministry of Human Resources Development (MHRD) it shall be in the right spirit of adherence to the Constitution and to our federal structure if it is done in consultation with the state in which the university is proposed to be set up by trying to appreciate the special needs and perceptions of the state administration, the elected representatives, leading academics and intellectuals. A unilateral imposition without taking into consideration the actual ground reality or expectation is bound to generate an atmosphere of distrust and bickering and invariably dilute the larger vision and goal of the effort.While it is a more fundamental debate as to why a large number of central universities have to be created without adequate resources, space and manpower and more importantly without a distinct goal for excellence, it would perhaps be in the best interest of the entire project if the selection of a location for the Central University of Bihar (CUB) is best left to the people of the state to deliberate and decide upon. The Bihar Legislature has already adopted unanimous resolutions asking the Centre to establish the CUB at Motihari in East Champaran district and there is a debate going on within Bihar itself on the proposed location of the new university with a group pitching in for Gaya, which was the initial proposal of the MHRD and another voting for Motihari which has been the favourite spot for the Chief Minister, Nitish Kumar. By appearing to be intransigent on its choice of Gaya, the MHRD is only further widening the divide and generating adverse reaction at a time when it can well do without such a furor. In fact our national tendency of parachuting a central institution of higher learning by disregarding the ethos of the people and the ground realities has nearly always prevented such institutions from evolving into centres of academic excellence. It is true that regional aspirations are growing and it is legitimate that the young in the states and in the districts aspire for national institutions that can bring them en par with the youth in the metros but it does not seem to serve the purpose if such initiatives are divorced from the actual needs and possibilities of the region. Therefore passing an act that declares the setting up of 14 central universities all over the country is one thing, but to formulate a unique vision and aim for each one of them needs a different approach altogether.

Historically; the setting up of institutions of higher learning had been a vibrant part of the Indian civilisational experience. The ancient Indian universities of Takshaśilā, Nālandā, Valabhī and Vikramaśilā were some of the leading knowledge-lighthouses of the ancient world and were unique in their growth and in their approach to knowledge and in their method of imparting it. The ancient Indians were adept at creating these institutions which grew in an organic manner over a period of time. The process of this growth seems to have been so steady and so rooted to the ethos and demands of the age that the institutions thrived for centuries providing intellectual direction to the evolution of civilisations and more importantly also served to facilitate – in those days of intimidating distances – interactions between world civilisations. They lived dynamically and grew and only saw decadence and destruction at the hands of invading hordes. It has been rightly pointed out that the centres of higher learning in ancient India ‘were unique in their organisation and scholarship during those distant times when elsewhere in the world very few had thought of organised education at the university level.’ Most of these universities were international as well as inter-provincial in nature and maintained a high standard with well laid down and meticulously conceived stipulations and criteria for admission. In Nālandā, it is well known that, ‘streams of pilgrim-students wended their way in search of knowledge’ from Tibet, Korea and China and in India from the central regions, from distant provinces such as the North-West, ‘Kāñchipura in the South, Purusapura (modern Peshawar) in the North and Samatata in the East.’ The university of Takshaśilā is said to have had such a vibrant and erudite faculty that they ‘could attract hundreds of students from distant parts of the sub-continent, in-spite of the long and dangerous journey which they had to undergo.’ It was then believed that the ‘knowledge of these teachers put together represented everything that was worth knowing in those days’ and the institution developed a great reputation in the field of medicine. History says that ‘the royal physician Jivaka who had cured the king Bimbisara of Magadha and also the great Buddha himself of some painful diseases, had studied medicine’ at Takshaśilā. This hoary tradition of developing seats of higher learning was eventually broken; a long interregnum followed and came to an end when British administrators decided to form universities on the British model in the Indian presidencies. The civilisational memory of past indigenous institutions of higher learning was lost or at best became opaque and the British pattern of the university was upheld as the one to be emulated and replicated countrywide. Such a perception was briefly challenged in the first decade of the last century by a dynamic nationalist group of Indian scholars and opinion-leaders who advocated the need of creating national education institutions modelled on the spirit of past Indian educational institutions. The movement, though short-lived, did generate much debate and saw efforts made at building some such representative institutions. Satish Chandra Mukherjee (1865-1948), Aurobindo Ghose (Sri Aurobindo) (1872-1950), Benoy Kumar Sarkar (1887-1949), Lokmanya Tilak (1856-1920) were some of the pioneers of this movement. The much deeper issue, however, is that post-independence, a wide debate on the need to develop a system of national education, or to evolve models of higher education institutions in tune with the Indian civilisational spirit never took off. Even those models of education developed by some of our leading national figures – the Basic Education, or the Nai Talim model, or the Visva-Bharati model – were not sufficiently explored or experimented with in the early years after independence when it was possible to chart out a wholly new and refreshing direction for Indian education. The various dimensions of education and perceptions of knowledge-imparting within the classical Indian paradigm were not considered and a serious and wide-ranging effort of re-discovering some unique facets of the Indian educational past was never undertaken in right earnest allowing – with some modifications – the continuation, replication and perpetuation of the British presidency model of universities. And in our present zeal for creating such institutions we seem to have ignored again our civilisational memory of this past experience and appear to have omitted deriving inspiration from the collective spirit that inspired such landmark creations of the ancient world.

Without entering into the politics of the current debate on setting up the CUB one can very well point out that the reasons for setting it up in Gaya, as proffered by the Union HRD minister does not appear to be very original, innovative or justified. One of the reasons cited is that Gaya has better infrastructure, is well connected and is a ‘historical and cultural centre of international importance’ while Motihari is 200 km from the state capital Patna, and does not have proper support infrastructure and has hardly more than half a dozen good hotels.’ Connectivity, support infrastructure, quality of life in the surrounding and faculty quality does not seem to have been taken into serious consideration when deciding to reconstruct the Nalanda ‘International’ University in the same state. The area then was designated and the university was allowed to take shape and it was thought that infrastructure and the surrounding area would grow with the growth of the university. Why is this precedence being overlooked by the MHRD in the current debate is difficult to explain. The backwardness of an area cannot in real earnest be the major deciding factor for setting up an institution of higher learning. By depriving the area of such an institution one shall simply relegate it to the realm of perpetual underdevelopment and isolation. Universities in ancient India never functioned in isolation; they were an organic part of the surrounding and did initiate great efforts to develop these areas through a number of public service initiatives. The surrounding localities, villages and towns were never allowed to stagnate while the university achieved academic excellence and fame. Similarly, today central universities that come up in remote locations in the states could try and develop such a vision of community growth and development, such an approach is in tune with the past Indian educational experience. A number of leading Indian educationists had given thought to this aspect of the functioning of a university. In fact, there were some formidable educationists who had undertaken such an approach in the early years and had called for its serious consideration. In his paper on ‘The Quest of Academic Values in the University’ veteran philosopher of history, scholar of culture and civilisation and former Vice Chancellor of the Lucknow University Professor Radhakamal Mukherjee (1889-1968) who had himself actively participated in the national education movement brought notice to this vital aspect. It would be worthwhile, for the sake of broadening the discussion, to cite Mukherjee’s views in some detail. Recalling the initiatives he had taken on trying to integrate the university with the surrounding community, Mukherjee wrote:

During my term of Vice-Chancellorship I set up the University Council of Social Work for a wide minded programme of adult education, Community Centre, Children’s play movement, sramdan for the common people. Constructive social work undertaken by the student community in the slums and villages can not only harness its best energies and aspirations in constructive channels but also abridge the present cleavage between the classes and the masses that thwarts social progress in so many directions. A full-fledged Department of Extramural and Welfare under the Dean of Students’ Welfare is a necessary adjunct of a modern University that must recognise its obligation to the region, the neighbourhood and the common people around it…

There has been no concerted effort at developing such a broader goal of social responsibility. Just because Motihari does not have more than half a dozen good hotels does not mean that no new development initiative can come up there! A central university could very well be the starting point of greater development in the area. A central university in Motihari can work wonders for the development and growth of the whole of northern Bihar and may even go a long way in arresting the rising tide of naxalism in the entire belt. If remoteness is indeed a criteria what explains the setting up of an IIT in then remote Kharagpur in 1950. The historic Hijli detention camp which detained some of our most valiant young freedom fighters was converted into housing the IIT which rose to become one of the premier institutions of technical education in the country. In fact, like Hijli Motihari and East Champaran too are intrinsically linked to our freedom struggle and to the memory of Gandhi launching his Satyagraha. In this context one can also recall that when the Pondicherry Central University was set up in 1985 in the outskirts of Pondicherry no major infrastructure support, except for the town itself, existed in the area with the nearest airport, Chennai, a good 150 km away. Today after two odd decades of the University’s functioning the area has grown significantly and has seen major infrastructure development. A number of central universities founded in the states – in Tamil Nadu, Odisha for example – are located in remote areas. Their failure, for the moment, to attract the requisite number of faculties for effective functioning – the Central University of Odisha at Koraput has been able to fill ten out the sanctioned strength of 48 faculty members, and the Central University of Tamil Nadu located at Thiruvarur has been able to recruit six of a sanctioned strength of 24 – reflects on the MHRD’s attitude towards these newly spawned institutions and not on their location or other local factors. Adequate publicity, attractive incentives and guarantees for research and education growth or even special recruitment drives with special provisions bypassing some of the more tedious bureaucratic procedures could have attracted a greater number of academics – especially the young – to these institutions. The MHRD seems to have failed to effectively undertake such a drive. The Central University of Karnataka, for example, located at Kadaganchi, 30 km from Gulbarga and 250 km from Hyderabad the nearest airport, has succeeded in attracting a good number of faculty members demonstrating that academic scope and teaching opportunities evolved by those laying the foundation of the new institution can and actually does determine the responses to these far-flung institutions. In a country like ours, with massive disparities at all levels especially at the educational, it is only with such initiatives of setting up universities at remote locations that one can really hope to bring about greater educational parity. Therefore remoteness of location cannot, in all fairness, be the principal criteria for rejecting the proposal.

The MHRD appointed Site Selection Committee comprising experts have also stated that Motihari falls in the seismic zone and a 1000 acres fertile land would go non-productive if the CUB comes up in the area. Shedding the blinkers, one could think of turning these factors into some of the most unique features of the proposed university – make it a new age model earth-quake resistance edifice with a special focus on agricultural and high-yield paddy research. In any case the people of the area are for the initiative and do not appear to be resisting any move at developing the university. It is a skewed view of things which says that seismically active zones be relegated to the national periphery when it comes to implementing development schemes. Under that logic, large tracts of northern India, including some of the leading corporate hubs, which fall within a high seismic zone, should perhaps be abandoned. What is urgently required is the revamping of our national understanding and vision of a university with the entire nomenclature and our understanding of it requiring massive revision and rethinking. Moreover, from an international outreach point of view, a university in Motihari, which is close to the border with Nepal, - with Birgunj, the gateway to Nepal being roughly 55 km away – can very well be developed with an international outlook and invite students from the neighbouring country, grow into a pre-eminent knowledge hub in the area and work towards developing that segment of the border region important for both the countries. Famed author of the Animal Farm, George Orwell (1903-1950), linked by birth to Motihari, has in any case already given the place an international profile! Gaya should have had long back a global education institution in keeping with its international spirit and its spiritual message, that such an institution has not been thought of in the past six decades reflects our attitude towards the preservation of our spiritual-cultural heritage and the dissemination of their perennial message.

Instead of making it an opportunity for jointly working out a grand educational vision between the centre and the state the effort at developing the CUB is fast degenerating into an avoidable blame game and a false show of strength. An effort at evolving a consensus by setting up a joint committee comprising of experts from the state and the centre and with the centre being sensitive to the needs and demands of the state can at least start making things move. In fact a high-level national committee can be formed with leading educationists, intellectuals and education administrators to examine in great detail the entire exercise and vision of setting up central universities in the country. Such periodic scrutiny shall avoid ad-hocism in this very vital sector of our national life and perhaps aid in developing a broad educational vision for higher learning in India in consonance with our civilisational legacy of education and learning.

Meanwhile the CUB must come up and come up with a grand vision and programme fulfilling the aspirations of the people of that region!

Sources

• Apte D.G., Universities in Ancient India, Baroda: Maharaja Sayaji Rao University, [date not stated]

• Mazumder Nogendra Nath, A History of Education in Ancient India, Calcutta: Macmillan & Co., 1916.

• Mukherjee Radhakamal, India: the Dawn of a New Era, New Delhi: Radha Publications, 1997.

• Sankalia H.D., The University of Nalanda, Madras: B.G.Paul & Co., 1934.

• Abdul Qadir, ‘CUB issue: CM’s stand puts Sibal in a bind’, The Times of India, April 2, 2012.

• Abdul Qadir, ‘CM remains firm on Central University of Bihar location’, The Times of India, 31 March, 2012.

• Santosh Singh, ‘This Round to Sibal, but Nitish not done yet’, The Indian Express, 30 March, 2012.

• ‘Agitation for CUB gathers momentum as PM supports Gaya, not Motihari’,

The Bihar Times, 19 March, 2012.

• ‘Nitish Kumar Urges Kapil Sibal to shed bias against

Motihari’, The Times of India, March 12, 2012.

• Basanta Kumar Mohanty, ‘Varsity in Limbo over Strife’, The Telegraph, Calcutta, 3 March, 2012.

• ‘Himanshi Dhawan, ‘Centre-state site tussle to deprive Bihar of central University’, The Times of India, 3 March, 2012.

• ‘Bihar Houses adopt resolution on Central University’, The Economic Times, March 1, 2012.

News Reports/Analysis

Author is Research Associate in Vivekananda International Foundation

Asif Zardari’s Visit: India Should Avoid The Old Mistakes

Sushant Sareen

Quite clearly, between two countries which share an adversarial relationship, there is nothing that can ever be called a ‘personal’ visit by one head of state to the other country. And between India and Pakistan, this is quite simply impossible because in this era of 24x7 TV, a media circus will inevitably surround such a visit giving it saturation coverage and analysing every turn of the head, every wink, nudge, shrug, nod and what have you. At the political level, such a ‘personal’ or even a ‘non-official’ visit (for instance a cricket match) serves as a convenient excuse for the leaderships of the two countries to touch base and use the occasion to confabulate with each other. Thus it is that the moment it became known that Pakistan's President Asif Zardari wanted to go on a pilgrimage to Ajmer, the Indian leadership not only extended all due protocol to him but also graciously invited the Pakistani president to stop over in New Delhi en route to Ajmer for a meeting followed by a lunch with the Indian Prime Minister.

The official line in both Islamabad and New Delhi is that Mr Zardari’s visit is purely personal and the Indian PM is hosting a lunch for him only to extend courtesy to a visiting head of state. There is really nothing on the ground to suggest that the officials are burning the midnight oil to prepare for some kind of intense dialogue. And yet, hardly anyone in the two countries is taking the official line on face value. Notwithstanding denials by officials who are going blue in the face trying to dispel any notion that the meeting between the Pakistani President and Indian PM has been elaborately choreographed, most analysts are convinced that the pilgrimage is actually a smokescreen for holding direct high level talks between Mr Zardari and Prime Minister Manmohan Singh.

Asides the fact that political leaders of India and Pakistan are notorious for entering into a dialogue without adequate preparations – Agra 2001 is a prime example – the speculation that the meeting between Zardari and Manmohan Singh will give some sort of a push to the dialogue process between the two countries is also fuelled by the recent breakthrough in trade relations with Pakistan moving to a negative list of trade items pending the grant of MFN status to India. This was a long standing demand of India and is being seen (quite wrongly, it must be said) as a concession made by Pakistan. What is more, ever since the obnoxious Shah Mehmood Qureshi was removed as foreign minister and was replaced by Hina Rabbani Khar, Pakistan has been making all the right noises towards India, sending signals that it is genuinely interested in normalising relations with its eastern neighbour. Although the Indian permanent establishment is rather sceptical about genuineness of Pakistan's professed intentions for good relations, at the political level the Indian leadership appears to be falling over itself in trying to reach out to Pakistan and clasp the extended hand. Not surprisingly then, observers are waiting to see what, if anything, comes out of the meeting between Zardari and Manmohan Singh. And it is precisely this expectation, rather anticipation, that India needs to guard against.

To some extent, there is recognition in India that Zardari probably doesn't have the political capital to effect any major breakthrough with India and therefore it would be unrealistic to expect him to deliver on anything substantial on issues of critical importance to India. Many in India would also argue that any assurances that Zardari gives to India on the issue of terrorism cannot be taken seriously because he just doesn't have the power to fulfil these assurances. After all, the terror machine in Pakistan is controlled by the military establishment of that country and given the frailty of the political system, and his own precarious position, it is unlikely that Zardari can or will take on the powerful Pakistan army in order to live up to any commitment he makes to India. As a result, no one should be surprised if the issue of terrorism is raised in only a very pro forma manner by the Indian side.

Paradoxically, it is this palpable weakness of successive Pakistani leaders that serves as a trump card for them in their dealings with India. Chances are that Zardari will play up on both his sincere desire for good relations with India as well as his weak position within his own country to try and extract some major concession from his Indian interlocutors, without of course conceding anything in return. In other words, what Zardari will do is that when pressed on the issue of terrorism, he will explain his difficulties and constraints in addressing this issue immediately. He will in all likelihood play the ‘Mullah-Military card’. His pitch will be: “help me by giving me something that I can take back with me to my country and marginalise the military-mullah alliance on the back foot; without such a grand gesture from India the mullahs and the military will destabilise my government, depose me and take over power and then India will have to contend with a radical or at least a very hard line government in Pakistan, dominated, if not run, by the military-mullah alliance”. He will wave the trade deal as a sign of his commitment and in turn seek concessions on what some ignorant analysts, commentators and other sundry peaceniks call ‘low hanging fruit’, namely Sir Creek and Siachen, on which there is a false propaganda that a deal is all set to be inked if only the Indian leadership summons the political courage and displays the political will to do so. This is exactly the tactic used by successive Pakistani leaders with their Indian counterparts and this has always been successful in extracting concessions from India – Ayub Khan used this after the 1965 war, Bhutto after 1971, Benazir Bhutto and Nawaz Sharif when they were at the helm of affairs.

Having fallen for the same beguiling Pakistani logic time and time again, India now needs to put a stop to this Pakistani version of ‘Apres moi le deluge’ and no better occasion to do this than Zardari’s forthcoming visit. While India should wish Zardari well – he is probably the most visionary leader Pakistan has got in a long, long time and his policies, domestic and external, hold the potential for making Pakistan a ‘normal’ state – his survival is neither India’s responsibility nor is it India’s primary interest vis-a-vis Pakistan, and most certainly not if this has to be achieved at the cost of surrendering India’s vital security interests or compromising on India’s sovereignty.

The big problem however is the obsessive quest of the current Indian dispensation to settle all the problems with Pakistan even if it means sacrificing India’s interests in the process. No one should therefore be surprised if India once again makes the same old mistake of trying to rescue a Pakistani leader by making concessions and ending up with the worst of both worlds – not only giving the Pakistanis what they wanted at India’s cost, but also failing to save the person for saving whom these concessions were made in the first place.

Author is Senior Fellow in Vivekananda International Foundation

Voting against Sri Lanka

PP Shukla

Fighting an insurgency is dirty business. We in India know that. In the west, this is understood with the cold-blooded acceptance that is typical of them. And they have never hesitated to draw blood when their interests required it. It is only when their plans are thwarted by the other side successfully applying force that we hear the cry of human rights and war crimes. These are obvious points, and we have been – still are in some areas - at the receiving of the double standards. It would be reasonable to expect that the Government would appreciate this reality and frame its policies accordingly. Evidently not, as the recent vote on Sri Lanka at the UN Human Rights Council shows.

On the draft Resolution naming Sri Lanka, we began with the eminently sensible assertion that we have never supported country-specific resolutions on human rights. The logic is that we have ourselves been the target of such attempts in the past, and have drawn the right lesson – never support the condemnation of any country by name. In large measure, this is because we all know that such resolutions are really political in nature, and the human rights issue is just a thin veneer to make the adoption of such resolutions more palatable in multilateral settings. It is, for example, highly unlikely that we shall see any resolution naming Bahrain for human rights violations – or Pakistan, where Hindus and other minorities literally live in terror.

In addition, Sri Lanka is an area of vital interest to us, and one of the better bilateral relationships among our South Asian neighbours. Not just that, the LTTE – as distinct from the Tamil population of Sri Lanka – has given us nothing but grief since the days of the IPKF. In short, there were many reasons for GOI to adhere the time-tested policy of not supporting country-specific resolutions.

But the Prime Minister reversed that stand under pressure from the Dravida parties, even though it is difficult to understand what kind of pressure these two parties were able to bring; one is weak and needs the Congress, rather than the other way around; the other is not a supporter at all and is not likely to be one any time soon.

The Resolution itself is straightforward enough. Its demands are, however, such that we would not countenance any such demand being placed on us. It requests the Government of Sri Lanka, inter alia, “to present, as expeditiously as possible, a comprehensive action plan detailing the steps that the Government has taken and will take to implement the recommendations made in the [Lessons Learned and Reconciliation] Commission’s report, and also to address alleged violations of international law”. Not many Governments in the world would like to be at the receiving end of such a demand, no matter that it is couched in polite language.

The proceedings themselves are also revealing: China and Cuba spoke in defence of the Sri Lankan position. The Americans, supported by the EU countries, expressed support for the Draft Resolution. Sri Lanka thanked China and Cuba for their support. Many countries gave explanations of vote, including the above countries, as well as Russia. India did not speak in the debate, or provide an explanation of vote. Russia, China, Bangladesh, Maldives all voted against the Resolution. Malaysia was among the eight countries that abstained. India voted in favour, and was also the only Asian country that did so.

There is a Tamil problem in Sri Lanka. And India alone has the knowledge, the standing, and the commitment to both the Sri Lankans and the Tamils to play a fair and effective role in righting this situation. But not for the first time, we are flunking our role and our destiny. This is a pity, for we have covered the hard yards over the last three decades. The framework for a solution has been worked out, largely under Indian prodding. It only needs to be implemented in good faith now. India is in a position to contribute to this process too, and ensure a positive outcome. We have made some efforts, but obviously not serious enough to make the critical difference. Events such as the vote will only complicate our task; fortunately, the Prime Minister is reported to have written to the Sri Lankan President after the vote, so it is to be hoped that that will smooth things over. It would also be wise for Sri Lanka also not to make a long-term grievance of this matter, and agree to put it behind us.

However, the Tamil problem should not be allowed to become an LTTE problem. This was the mistake we made in the 1980’s, when the LTTE physically eliminated all rival groups, and we acquiesced in this. The bitter experience of the later years, including the assassination of Rajiv Gandhi, should serve as a reminder against allowing the LTTE – and its western supporters, lay and ecclesiastical – to become the sole voice of Tamil aspirations again. Their agenda is not in our interest. Eelam is not in our interest in today’s circumstances.

Further, we have serious challenges emerging afresh in the neighbourhood. China is making steady progress in Sri Lanka. Some of it is a result of our incompetence, some of it is the Sri Lankan attitude of trying to outsmart us – a common affliction in South Asia. But we have vital stakes in the country, and cannot fashion our responses out of pique, or because of pressure from within and without. Pakistan is similarly fishing in the troubled waters. If standing up to domestic and external pressure was needed, it was here, not over Iran.

And that is the second point worth making. Just as we should have resisted all kinds of pressures over the Sri Lanka vote, we need to be more pragmatic, and less perverse, over Iran. There are important interests in Iran, no doubt, but there is less substance to them than our current policy would seem to suggest. Oil imports are undoubtedly important, but that about sums it all up. All the rest, particularly the route to Afghanistan and beyond to Central Asia, is a very remote possibility. This is because Iran is itself not quite clear where it stands – with the Taliban and Pakistan, or against this alliance. It is an active participant in all the regional summits hosted by Pakistan. This is because it is driven basically by a visceral opposition to America, even though it is far from clear that this represents the popular view of America within Iran. It is also worth remembering that the regime itself is unpopular and devoid of legitimacy.

Equally important, it is far from clear that India has the will to pursue any serious interest or stake in this region. There are legitimate grounds to doubt whether we have the stamina for any long-term commitment even to Afghanistan. The test of all this is to be found in the willingness - or otherwise – of GOI to stand up to Pakistan’s bare-knuckles policies in Afghanistan. For instance, Pakistan will not allow Indian goods to transit to Afghanistan; and yet, we have unilaterally given Pakistani goods MFN treatment, when they have not done so for Indian goods, as they are required to do under the WTO rules. We are also now planning, if press reports are to be believed, to allow for easier Pakistani investments – investments from Pakistan! – in India even though they have not yet finalised their position on MFN status for India.

Moreover, the investigations by the Delhi Police into the bombing of the Israeli diplomat’s car make it clear that there was Iranian involvement. This is a serious breach of all diplomatic norms and even by the standards of the special agencies, this is an unfriendly act. Iran must be called to account for this. We have approached the country for help in bringing the accused to justice; their willingness to cooperate will be the litmus test of their true intent vis-à-vis India.

As against this, we have real, immediate, and substantive interests in the west and Israel and the west, as has been set out in an earlier piece in this space. For far too long, we have neglected our national interests while pursuing mistaken policies. High time to set things right.

Author is Joint Director in Vivekananda International Foundation

The Arc of the India-US Partnership

Kanwal Sibal

US-India Geo-political Convergence?

Is there a geo-political coherence in the India-US partnership that can be delineated on the ground by tracing a curving line across the globe or a sizable part of it that connects points of convergence? Where will this arc begin? In what we call West Asia? Will it begin in Afghanistan and go eastwards? Or will it begin in Thailand and go right through South-East Asia and end up in Japan? Does the arc begin in the Indian Ocean and go right up to the South China Sea? Such a line would confine the scope of the India-US relationship to the Asia-Pacific region largely, now the focal point of US geo-strategic interest in the wake of China’s rise.

What about the so-called global issues? Can they be connected coherently with an arc of partnership? Issues connected with climate change concerns, environmental issues, democracy, human rights, non-proliferation, terrorism and religious extremism. Is there enough convergence between the two countries on these issues?

In many ways, India’s most difficult relationship with any country has been with the US, the foremost global political, economic and military power. Over decades the US has curbed India strategically by imposing sanctions in the critical areas of nuclear and space technologies, and high-technology in general. India has felt US pressure on the issue of human rights. Our democracy may have shielded us from the worst, but on the positive side it has brought no particular bonus.

The US has bolstered Pakistan. Its strategic outreach to China from the 1970s added to our problems by exposing us to joint pressure from Pakistan and China, with the US overlooking some of the worst proliferation activity by the two that today puts constraints on US efforts to restrain Pakistan’s conduct on issues of terrorism and religious extremism.

The US approach to terrorism and religious extremism had been ambivalent until 9/11, at India’s cost because the US has, over the years, ignored Pakistan’s use of terrorism as an instrument of state policy because India, not the US, was principally the victim. India’s view, that terrorism had to be viewed and fought against as a global phenomenon, obtained no support.

Shift in US-India Perceptions

Today, the India-US relationship is a transformed one with the change in Indian thinking about America being the most important element. Being ‘pro-American’ is not a stigma any longer whether in politics or business. The wider public accepts that establishing good relations with America is a desirable objective. Pragmatic thinking in India supports the inclination of the government to bring India and the US closer, though not at the cost of becoming subservient to the latter.

The urbanised Indian middle class is very positively oriented towards the US, and so is the entrepreneurial class, especially that section involved in the knowledge economy. The business community as a whole, that today wields far more influence on policy making because of the liberalisation of the Indian economy and the declining role of the state sector, is an engine for the growth of Indo-US ties. The media devotes a lot of attention to the US. In any report card of the relationship over the last decade this change in attitude is not only very important, it is key to a progressively enhanced relationship with the US in the years ahead.

The evolving defence relationship with the US reflects this change in attitude. The US continues to arm Pakistan, and India, though unhappy, is willing to take a broader view of shared interests. Currently, the US has bagged the largest number of arms contracts - about $8 billion worth in the last five years - despite the stringent and intrusive end-use monitoring requirements. India is likely to order more C-17s and P-8I aircraft. The contract for attack helicopters and light howitzers could well go to the US too. India no longer allows fears of a cut-off of US arms supplies in the event of regional tensions to stand in the way of enhanced defence ties.

The elimination of US fighters from the competition for the MMRCA contract, which continues to rankle feelings in the US, is not a defining decision. The US expected a political decision in its favour, whereas India wanted to insulate the decision from politics and base it primarily on technical and financial considerations. Despite our exceptionally close ties with Russia historically, the Russians too were eliminated from the MMRCA competition. In the area of military-to-military cooperation India and the US have organised numerous exercises, over 50 in the last seven years. With no other country have the Indian armed forces engaged in so many joint exercises. This is an important building block of mutual confidence. In the larger security related context, the US decision to liberalise export controls for India and lifting sanctions on some of our entities are important steps towards building a partnership.

India’s Stand on India-US Congruence

Despite these positive trends India, however, remains cautious about developing operational cooperation with the US because of its political implications, both in terms of domestic politics and India’s external ties. India wants to develop broad-based mutually beneficial relations with various global power centres rather than being seen as excessively leaning towards one power centre. No doubt there are many values that draw India and the US together such as the spread of democracy, pluralism, respect for human rights and entrepreneurial freedom.

The problem lies in the methods used to promote these positive values. The West, led by the US, is prone to use military means to promote or even impose these and often selectively. Authoritarian friends are protected and authoritarian adversaries targeted. India does not want to be caught in a situation in which it becomes party to a selective application by the US of principles that are, in themselves, positive. As it happens, it is Russia and China that are the principal hurdles in the United Nations Security Council in denying the US and her allies a free hand to change regimes they dislike for geo-political reasons.

Often these regimes are unsavoury but the issue is not that they might be disreputable, it is the management of international relations in a consensual and equitable manner, with due respect accorded to sovereignty and the principle of non-interference in the internal affairs of countries. If governments should not have total immunity for heinous crimes against their own populations because of the sovereignty principle, neither should such crimes be exaggerated and amplified by the West-controlled international media to justify intervention, nor should other reasons be trumped up for mobilising support for regime change.

India is therefore unwilling at this juncture to sign some pending defence agreements with the US that might be construed as opening the door for operational cooperation. The LSA for logistics, CISMOA for inter-operability and BECA for geo-spatial cooperation have been shelved for the time being. India does not perceive any particular advantage in these agreements.

Recent Developments in Iran

Developments relating to Iran illustrate the kind of problems India can be confronted with if certain expectations of India-US congruence in policies are raised with an expanded defence relationship. India has no reason to support either US military action against Iran or steps at economic strangulation. Even on the central issue of Iran’s nuclear programme, India can hardly view the situation in as catastrophic as the US would want us to. US hands on the nuclear issue with India have not been clean. Worse, it has deliberately overlooked Pakistan’s nuclear activity in connivance with China in the past and continues to do so even today.

However reprehensible Iran’s conduct, Pakistan’s has been far worse from our point of view as it directly affects our security, which the Iranian programme does not. Already our efforts to preserve our energy relationship with Iran have become a contentious issue with the US. So long as the strategic visions of India and the US in our region in particular are not sufficiently aligned, our defence relationship will be subject to political limits.

Impediments in Indo-US Nuclear Cooperation

The Indo-US nuclear deal has been at the fulcrum of the changed India-US relationship, though the process was politically painful. Despite the non-proliferation caveats it contained and the sharp controversy they provoked at that time, that criticism has subsided. Now the attention is on realising actual commercial benefits from the nuclear agreement.

Here, the Indian Nuclear Liability Act has put a spoke in the wheel for US nuclear suppliers. India believes its act is compliant with the Convention on Supplementary Compensation, whereas the US does not. The US has been pressing India to ratify the CSC which India has committed to doing by the end of the year but the US demand that this be done in active consultation with the IAEA has not been acceptable to India. It is by no means clear that with such ratification India’s international obligations will override its domestic law. In any case, India has failed to ratify the CSC as promised. On the other hand, India has drafted the regulations under the Liability Act and placed them before the Parliament.

These regulations limit supplier liability financially and in duration, but their finalisation awaits the disposal of an amendment that has been proposed. It appears that the US is still not satisfied with the effective dilution of the liability provisions of the Act in the regulations that have been framed and would want India to still conform to the so-called international practice of placing all liability on the operator. Meanwhile, an ‘early works agreement’ between US companies and NPCIL is being proposed but substantial progress on setting up US supplied plants can only be made after commercial negotiations are completed on a viable tariff for the power produced.

The problem of liability has been compounded politically by the Fukushima disaster and anti-nuclear protests in India that threaten even to delay the commissioning of the almost ready Russian-built nuclear power plant at Kudankulam. The French site at Jaitapur has run into problems with local communities. Another Russian site at Haripur in West Bengal has been abandoned. The India-Japan nuclear negotiations too have suffered because of Fukushima. All this does not augur well for US companies.

The lack of progress on the nuclear power front has raised the issue of deliverables by Indian in return for US leadership in bringing India out of the nuclear cold. To some extent, this is regrettable because if the nuclear deal was strategic in intent, it should not be reduced to a transactional one. In other words, it should not be seen that the deal was primarily intended to open doors for US companies to secure lucrative Indian contracts, even though this would have been a natural outcome. While it is legitimate for US companies to actively push their commercial interests, to assume that India is obliged to reward the US through its companies and failure to do so in time is grounds for grievance, would be a mistaken notion. Lack of progress should not, hopefully, cause the US to slow down in the implementation of the other steps envisaged to normalise as far as possible India’s status as a responsible non-NPT nuclear power by making it a member of the NSG, MTCR, the Australia Group and the Wassenaar Arrangement.

The US attitude towards China’s decision to supply two additional nuclear reactors to Pakistan, is troubling for us. India has refrained from making an issue of it to avoid differences on nuclear issues with the US when after decades of contention both countries have resolved their bilateral differences over India’s nuclear programme. India has also wanted to avoid a diplomatic dispute with Pakistan as well as China on this issue for its own reasons, namely, to avoid disrupting the on-going dialogue with Pakistan and in recognition of the futility of raising the issue with China. With the US/West showing complacency over this China-Pakistan agreement, India, as a non-member of the NSG, had additional reason to avoid inviting a diplomatic rebuff in agitating the issue.

In view of US concerns about the safety of nuclear materials and the world-wide initiative it has taken to galvanise action on this front globally, one should have expected the US to have shown more concern than it has about the security of the fast expanding Pakistani nuclear arsenal, particularly as the country is falling prey to religious extremism and terrorism. The US should be fearful of the danger of nuclear material falling into the hands of extremist elements not necessarily from outside the system. The powerful anti-US wave sweeping Pakistan should intensify these concerns. The US could have, therefore, done more to oppose this inopportune China-Pakistan deal. Critics construe the relatively complacent attitude of the US as intended to allow Pakistan some satisfaction through China to balance the nuclear deal with India in the face of persistent Pakistani demands for a similar deal from the US for itself.

US and India-Pakistan-Afghanistan

The set of issues involving terrorism, religious extremism and Afghanistan, which are vital for Indian and US security, could delineate the arc of the India-US partnership more sharply but here too, while concerns are shared, the way to deal with them reveals serious gaps in thinking. The US has travelled a long way from ignoring Pakistan’s use of terrorism as an instrument of state policy - despite India clamouring against this for years - to Admiral Mullen acknowledging this in his Congressional testimony before retirement. India has been charging Pakistan with duplicity, an accusation that the US now makes liberally against Pakistan. India has long called Pakistan an epicentre of terrorism and now the US recognises Pakistan as such. Yet the US has continued to arm Pakistan and this even when General Kayani, who is now regarded with less admiration by the Pentagon, insists on his India-centric strategy. The US has just announced a $2.4 billion aid package for Pakistan that includes a sizeable chunk as military aid.

India and the US have successfully overcome some early differences of opinion about India’s role in Afghanistan. The US now supports India’s development assistance to Afghanistan to the point that the two countries are discussing joint projects there. The US has not viewed negatively the declaration of a strategic partnership between India and Afghanistan and the provisions relating to India providing training the Afghan security forces and contributing to the enhancement of their combat capability. This implies acceptance by the US of India’s legitimate long term interests in Afghanistan and reduced concern about Pakistan’s India-related sensitivities about that country.

The problem area is US’s exit strategy axed on reconciliation with the obscurantist Taliban leadership so long as it breaks links with Al Qaida and confines its Islamist agenda to Afghan territory. The decision to allow the Taliban to open an office in Qatar gives respectability to this retrograde movement as a political interlocutor. To begin to obfuscate the reality of what the Taliban represents, as Vice-President Biden’s recent statements suggest, in order to have some kind of an orderly exit from Afghanistan may serve US political needs but it does not serve India’s interests. India cannot be comfortable with such a US strategy. Our problems arise from the strength of Islamist ideology in our region, embodied all along by Pakistan and now set to gain strategic depth in Afghanistan. It is this Islamist ideology that has given nourishment to political confrontation with non-Islamic India with its large Muslim population. Whatever the likelihood of potential problems between the Taliban Pashtuns and Pakistan, India cannot manoeuvre in a Taliban-influenced political dispensation in Afghanistan. A ‘Talibanised’ Afghanistan will also obstruct India’s efforts to build any meaningful relationship with Central Asia. Afghanistan’s membership of SAARC will also become problematic from India’s point of view as this membership is predicated on a constructive Afghan role, not a disruptive one.

India needs a moderate Islamic government in Kabul with no religious bias against India and not vulnerable to manipulation to serve Pakistan’s anti-Indian obsessions. What India would worry about is a US-Pakistan deal that gives the Taliban a role in the Afghan political structure as a guarantee for its self-defined interests as against fuller Pakistani cooperation to help in the US/NATO exit from Afghanistan without the Afghan house crumbling in its wake.

India-US bilateral cooperation in combating terrorism is now acknowledged as being helpful. It appeared earlier that this was more in the nature of enhancing India’s technical capabilities rather than joining hands to curb Pakistan as a source of terror directed at India. But now it seems actionable intelligence is being shared, though the Hadley episode has created a trust deficit. In the area of homeland security, India can gain much from US expertise, systems and equipment.

The China Factor

The US has been exhorting India to move from a “Look East” policy to an “Engage East” policy. Now the call is for an “Act East” policy, in consonance with the presumed wishes of the South-East and East Asian countries. In actual fact, India does not need such exhortation as its Look East policy has always meant engaging the East and acting in that direction. India’s trade and investment profile in South-East Asia has grown enormously; we have signed FTAs or CEPAs with ASEAN or individual countries such as Thailand, Singapore, Japan and South Korea. India plays an active role in the ARF. It is part of the East Asia Summit where it intends to work closely with the US and others. If India’s eastwards activity does not match China’s, it is balanced by the fact that we are not perceived as a threat either.

As part of its eastwards oriented concerns, India has been conducting numerous naval exercises with the US to ensure the security of the sea lanes of communication in the Indian Ocean through pass trade and energy supplies of China, Japan and South Korea. Naval exercises have been held in a larger format with Japan, Australia and Singapore. India has tried to engage the navies of South-East Asian countries to build goodwill in what are called the ‘Milan’ exercises. Now a decision has been taken to have tri-lateral exercises involving India, US and Japan, as well as a tri-lateral dialogue amongst these three countries at the foreign office level. These are signs of a developing a hedging strategy against the rise of a more economically and militarily muscled China that is already causing anxiety in the region with its claims in the South China Sea.

India supports the freedom of navigation in the South China Sea, a position aligned to that of the US. India would support enhanced US presence in the Asia-Pacific region as a factor of stability and therefore, the pivot towards Asia announced by President Obama would be viewed without any misgiving. The US alone is in a position to exert pressure to contain China’s ambitions even as the profound American economic linkages with China as well as US’s debilitating mistakes in West Asia feed these ambitions.

Yet here again, India has question marks in its mind about America’s China policy. Some flow from the unhealthy mutual financial and economic inter-dependence that has developed between the two countries. Too much is at stake in China for the US to risk a confrontation with that country. China is playing a subtle, long-term game of extracting the maximum it can from the relationship with the US until it steadily builds up its capacity to counter US power in Asia and beyond. It, therefore, takes in its stride, US criticism of its human rights record and even while resorting to rhetoric, continues its systematic engagement of US political and economic circles.

US capacity to moderate China’s conduct is being steadily eroded and in time, as the power equations change in China’s favour, the US will have even less of a capacity to influence China’s behaviour. India will, therefore, have good reason not to allow its China relationship to deteriorate on account of some assumptions about US-China tensions, given the likelihood that US and China would work out mutual arrangements over the heads of others if the circumstances so warrant. If the US is obliged to engage China even as it develops hedging options as a precaution, India should be called upon to do likewise.

India must also take into account that its real problems with China are in South Asia, not in East Asia, with renewed strident Chinese claims on Indian territory, the lack of movement in border negotiations despite 15 rounds of talks at the level of Special Representatives, the questioning of India’s legal position in Jammu and Kashmir, the continued transfers of nuclear and missile technologies to Pakistan, Chinese presence in Pakistan Occupied Kashmir and its involvement in major infrastructural projects there even as China protests against the India-Vietnam agreement on oil exploration in the South China Sea and continues the militarisation of Tibet.

On these issues of strategic importance to India the US is silent. Not that India wants the US to intrude into these problems we have with China, though the US could have a clearer policy on the China-Pakistan nexus directed at India. On the contrary, the US seems to suggest that China is now behaving as a responsible nuclear power. In the past, the US has spoken of working together with China for peace and stability in South Asia, a thinking reiterated recently by Admiral Wilard. Xi Jinping, set to take over the reins from Hu Jintao, has noted in an interview in advance of his visit to the US in February that the China and the US have “actively coordinated” their policies in South Asia. India, on the other hand, sees China as a strategically disruptive power in South Asia. The US repeatedly endorses the principle of China’s territorial integrity, accepts Tibet as part of China, but does not support the principle of India’s territorial integrity or formally accepts J&K as part of India, in deference to the sensitivities of Pakistan and China. The US expresses no view on the militarisation of Tibet that not only suppresses the Tibetans but threatens India’s security. Here there is a serious strategic gap in the relationship and bridging it will not be easy.

The US, as the world’s most powerful nation, is used to shaping the international environment in conformity with its values and interests. India has to live in an international environment shaped by others; it seeks changes but does not have the capacity to enforce them. The political configurations it is involved in - the RIC, BRICS, IBSA, the Group of four for the permanent membership of the Security Council - give it room to politically manoeuvre outside a framework dominated by the US/West but without altering the current balance of power. The US and some other western countries criticise India for being a freeloader in benefitting from the efforts that western powers put in to make the global system work, without sharing responsibility.

If India, as a rising power, is now being accommodated in leading global groupings, the expectation is that it will endorse the broad thrust of western policies. The assumption is that India must change its thinking and approach, and contribute to enlarging the consensus behind these policies, not that India’s views will be taken into account in modifying them. It is this assumption that explains the ire at India for its voting in the Security Council on Libya and Syria that has goaded some to question the rationale of US support for India’s permanent membership of the Security Council. India’s latest positive vote on Syria has, of course, earned favourable notice.

If India is asked to assume greater responsibility for upholding the international system, then some genuine attempt has to be made to remove its present deficiencies. Military intervention and the right to protect are products of mindsets habituated to the use of military power to advance national or alliance interests.

India’s rise invites attention from the developed world, but the challenges of development are enormous. Its interests converge as well as collide with the West. We have difficulties over US polices towards Iran and earlier towards Myanmar, not the least because the US has enlarged the geo-political space for China around us. Similarly, the US enlarged the space for religious extremism and terrorism in our region by supporting the Islamists against the Soviets, adopting a soft posture towards the Taliban when they took over in Afghanistan and wanting to accommodate them even now, and overlooking Pakistan’s use of terror at the state level and its clandestine nuclear programme that today gives Pakistan the confidence and capacity to defy the US even when vital US stakes are involved.

On the economic side, US exports to India have increased rapidly; the US is India’s largest economic partner as an individual country, though purely in terms of trade in goods China has become our largest partner to some discomfiture of policy makers and specific sectors of the economy in view of the mounting trade deficit and commercial practices of Chinese companies. The US is pressing for further reforms of the Indian economy, especially in the financial, retail and labour sectors. India will move at its own pace because of the limitations of its system, coalition government, domestic distractions and slow decision-making in the government. On climate change and WTO-related issues, India and the US have differences but these are not bilateral issues and should not be allowed to become one.

To sum up, the report card of the Indo-US partnership is a mixed one. The strategic relationship has to be imparted greater content. The backlog of past misunderstandings is being steadily removed. Anti-US political opinion and instincts exist but they are now secondary. There is general goodwill for the US though some aspects of US policies continue to cast a shadow on the relationship. The main drivers of the relationship on the Indian side are the acceptance that the relationship is vital and that no other relationship can substitute for it in its entirety; the people-to-people relationship is unmatched; educational linkages are very important; the India-American community is a positive force; India has hopes for access to high technology. On the US side, India’s large market, its human potential, shared values and the China factor are driving elements, but India figures less prominently in US calculations than the US does in India’s external relations.

The major constraints are a mismatch between US interests and priorities as a global power and India’s as a regional power; outdated conditionalities linked to arms supplies, the negative activity of American non-proliferation die-hards, the complexity of export controls especially on dual technology items, US desire to shape the Indian system to suit the requirements of its companies, which is a long-term exercise. Others relate to policies towards Pakistan and on issues of terrorism and religious extremism as well as uncertainties about the end-game in Afghanistan, in particular a deal with the Taliban brokered by Pakistan.

The India-US relationship is supposedly strategic but it is being judged too much on a transactional basis especially as what India can now deliver to the US in return for the nuclear deal, forgetting that the deal was highly controversial in India. US limitations in conducting its China policy even when it pivots towards the Asia-Pacific keeping the future China threat in mind are factors India has to keep in mind. The declining US economic strength and its inward pre-occupations are other constraints on US policies.

In the next decade or beyond, much will depend on how the US reforms its economic and political functioning to give a new élan to the country; the general belief is that the reserves of US strength will surface even though the US will not be in a position to dictate as much as before. It is important that the liberal international order underpinned by the US remains intact with needed reforms; undiluted by the authoritarian Chinese model.

The eventual India-US model of partnership will neither be that of US-Britain, US-Japan or US-France. India is neither a historical ally like the UK nor is it a fractious one like France, and it is not security dependent as Japan. India will seek to maintain its independence in decision-making as much as possible but also seek convergence with the US. It will be a unique model as India is sui generis and US believes in its own exceptionalism.

Author is Member Advisory Board in Vivekananda International Foundation and Former Foreign Secretary