| Sitting in India, it is hard to imagine the warmth of the American bear-hug. As a visitor to Washington, however, you get the message loud and clear: India is the flavour of the season""and not for short-term tactical reasons either. From Delhi, what one sees is a Bush administration that is irritatingly soft on President Musharraf for Pakistan's continuing cross-border terrorism. In Washington, though, everyone in the administration and in Congress sees American relations with India as the most improved in recent years. |
| This may not be a huge claim to make on behalf of an administration that sees foreign policy nettles in almost any direction that it looks: all of West Asia, North Korea and most of Europe. As if to underline the general estrangement, there is the disappointing presidential tour through East Asia (including China) recently and cooling relations with both Russia and South Korea. But even without reference to that backdrop, it is a refreshing change now to engage (with the help of the CII and the Aspen Strategy Group) in Washington with policy-makers and analysts who have usually viewed India through the wrong end of a telescope, and who now talk with enthusiasm about a new strategic relationship. Indeed, Atal Bihari Vajpayee's somewhat over-the-top formulation of 2000, that India is America's "natural ally", is now the phrase you keep hearing in Washington. |
| So what is the strategic insight that has brought about this change? To begin with, there is the long-term contest with China for influence in East Asia. Even if India is not going to be a cat's paw for the US in a containment game, it is the only natural counterweight to China that exists. Then there is the sense of instability everywhere in West Asia""and not just Iraq and Iran. In South and Central Asia, Pakistan is always a worry, Bangladesh increasingly looks like a mess, there are problems in Afghanistan, and tensions in the "stans" of Central Asia. The sole island of stability in the continent (not counting Japan), which also happens to be a functioning democracy with an open society, with a large Muslim population that is not breeding terrorists, and which possesses a business culture and judicial and regulatory systems that the US easily understands, is India. |
| From the economic perspective, too, India looks increasingly like a great bet to take. American companies may have invested more in China, but they make more money in India. While the figures are not publicly available (since so many leading American firms are not listed on India's stock markets), these companies know that their profitability ratios in China are no match for the numbers in India. And after the Goldman Sachs forecast that India will be the third-largest economy in the world a generation from now, there is no question that India is seen in a new light""especially when it clocks sustained economic growth of 7.5 per cent. This is buttressed by the successful offshoring that American companies are doing in India, the sense that India may now be a manufacturing success story as well, and of course the links that are fostered by the presence of a strong Indian diaspora in the US. |
| How does the new love affair with India manifest itself? For a start (hard as it may be for the deal's critics in New Delhi to understand), there is the nuclear deal. For it means that the US has fundamentally altered its 30-year-old nuclear stance with regard to India, committed itself to using its influence in the Nuclear Suppliers Group to make a special case of India and just India, and is also willing to rewrite its laws to give substance to the deal. The traditional non-proliferationists in the US Congress are not pleased, and the administration is going to have to do some hard nudging to get a positive vote. American business meanwhile is increasingly making a bee-line for India""with Intel, Microsoft and numerous other companies committing more funds. There will be more on the table in preparation for President Bush's scheduled visit to India in February-March. If that visit goes well, expect a full-blown romance to develop. |
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