Apart from the US immigration blockade, there is a lot cooking on the diplomacy and strategy fronts as well as the energy security front.
New Delhi: The world has turned upside down due to the novel coronavirus pandemic for which there is no end in sight and Indo-US relations has not been an exception to the crisis, and has taken a hit. The 60-day immigration blockade announced by US President Donald Trump and the two governments’ putting mutual trade relations on the backburner during this outbreak are evident.
But as the two democracies do not know the end out of this pandemic, they still haven’t stopped working together in some key areas. Top South Asia watchers and diplomacy experts have kept a tab on what’s happening on the diplomacy and strategy fronts. Many said the new immigration policy enforced by the US President may not be India-friendly, but it is a “temporary setback” as a lot is churning on other fronts to engage India as a vital partner in America’s fightback against the pandemic.
Aparna Pande, Director, Hudson Institute in Washington DC, said, “Immigration, like trade, was and will remain a problematic area between India and the US, but the relations between the two remain strong as ever, in all arenas–economic, strategic and people to people.”
Pande asserted her point by citing what’s been going on in the background on Indo-US strategic fronts. She told The Sunday Guardian: “The Indo-Pacific arena has witnessed a lot of activity in the midst of Covid-19. There have been Quad and Quad Plus meetings and discussions. India is collaborating with allies both bilaterally, regionally as well as in multilateral fora: UN, G-20 and others. This pandemic has only boosted India’s relations with the US, its European allies as well as Asian friends like Australia and Japan.”
Michael Kugelman, a South Asia expert at the US top thinktank Woodrow Wilson Center, told TSG: “One of the silver linings of the pandemic is that it has presented new opportunities for cooperation. We know all about the hydroxychloroquine story, but there’s potential well beyond drugs on this count. India and the US each have top-class physicians, epidemiologists, and medical researchers in universities and the public and private sector. This can all be leveraged for information sharing and new partnerships to help fight not just the current pandemic, but future ones too.”
Pande listed more room for the partnership to grow.
• Indian industries in the US–Mahindra Industries is part of the “Arsenal of Health” network in Michigan along with General Motors and Ford Motor Co. to manufacture personal protection equipment (PPE) for healthcare workers.
• US industries in India: Walmart has joined other US companies in donating PPE for Indian healthcare workers and is also contributing to funds set up to provide essential relief to farmers and small businesses.
• Vaccine production: Apart from efforts within India and the US, there is also an international collaboration of virologists at the University of Wisconsin–Madison with vaccine companies FluGen and Bharat Biotech to develop and test a unique vaccine against Covid-19 called CoroFlu.
Walter Andersen, a former State Department official and a keen India watcher, looks at the Covid-19 developments with an advice to maintain balance and restraint for a while. He put it frankly, “Trade with India could be adversely affected, at least in the short run.”
Andersen told TSG: “Our two governments over the past several years have established a broad range of agreements to work on energy, trade, health and agriculture–and security as well as several other areas (e.g. terrorism). The security angle is especially critical considering greater assertiveness of China in the South China Sea. In reaction to this, the US has just sent two warships (joined by another from Australia and rumours are that a Japanese ship will join them). Afghanistan is still another case of instability that could affect the security interests of both India and the US. Its domestic situation is yet to be resolved; the agreement with the Taliban is shaky at best. Then there is the uncertain nature of the post-virus revival of the world economies.”
He said: “There will be strong domestic pressures to cut back on any foreign dependencies in the rebuilding process. Fortunately, the Indian economy is driven, as in the US, by domestic spending and not trade, unlike China and Japan…But trade with India could be adversely affected, at least in the short run.”
However, Pande said India is in a unique position right now and it needs to be encashed. Many countries are asking their companies to leave China. Japan, a close Indian ally, is paying its companies to leave China. Many US and even European companies will pull out of China as well. “India, with its location, its massive labour pool and large consumer market, is the ideal country to attract these companies.”
But for that, India would need to reform its land acquisition policy, make it easier and cheaper to set up a business, undertake labour reforms, and institute a new industrial policy–something the economy will need post-Covid if India seeks to grow at 8-10% again.
Kugelman agrees, saying: “There’s still a lot of concern from the US business community about India’s investment climate, given issues with red tape and taxation among other issues. Certainly, the strength of the US-India partnership ensures that American financiers will keep trying to work around the problems, and to be sure there’s been much progress on this front, but this remains a problem area.”
Andersen added that India becoming the new business and investment hub for the US will largely depend on how robust India’s bounce-back will be–and whether it can take advantage of the US sourness at China–and what will be the effort to either bring jobs back to the US or flow to friendly countries like India.
Roadblocks apart, there is still unanimity in saying that Trump’s visit to New Delhi earlier this year positioned the bilateral relationship for ample growth beyond the security sphere. Energy is an area with ample potential for growth. Kugelman said, “A strategic energy partnership provides a nice platform to expand energy cooperation involving the private sector. Certainly, the major shock to energy markets during the coronavirus outbreak has injected ample volatility into this dynamic, but I do see the two sides coming out of the pandemic with continued momentum to push forward on energy collaborations.”
Andersen also feels that in boosting cooperation between the two democracies, there is ample scope. “The coronavirus issue has provided space in some areas, like the supply of drugs like hydroxychloroquine tablets. But some other areas should be addressed, such as Indian manufacturers being allowed to export fabric items for medical use, including masks. That would benefit Indian manufacturers now blocked by lockdown from markets as well as insatiable US demand for such items.”
But experts beg to differ from the Indian rhetoric against China building on in national media debates in New Delhi. Kugelman said, “I don’t think it will want to go overboard here. New Delhi has been very careful in its outreach to China, which one would expect with such a complex relationship. It’s easy to forget that each side has provided medical supplies to the other to combat the coronavirus, and diplomatic relations have been quite friendly over the last few years. India will want to focus on getting the pandemic under control at home, and not on picking fights with China in the way the US is recklessly doing.”
Andersen explained the logic behind it. He says: “Much depends on whether China threatens Indian interests in the South China Sea. I doubt if India even then will agree to any confrontational stance. However, it did so when China tried to block India’s construction on the Bhutanese/Indian/Chinese border tri-junction. So the degree of India’s response will depend on whether China’s action represented a security threat.”
Also, a point not to forget that even as a strong anti-China sentiment rules our minds and thoughts, experts are sceptical if a formal anti-China bloc would be a post-corona product. Business is on top of our minds, said Andersen, adding, “I doubt it as countries, even those in blocs like the EU, are focused on improving the well-being of their own economies.”
Kugelman added: “Multilateralism, with some fleeting exceptions, is more or less dead in the water right now. It’s each nation for itself, trying to fend off the pandemic within its borders. The test will be what happens post-pandemic, when economies are shattered and global trade is struggling, to try to revitalize multilateralism. At that point, the core great power dynamics will remain the same as before the pandemic: US-China rivalry will remain fierce.”
Kugelman signs off, saying, “The question will be how India and the rest of the world, battered and bruised from the pandemic, seek to position themselves in relation to that rivalry.”
But as the two democracies do not know the end out of this pandemic, they still haven’t stopped working together in some key areas. Top South Asia watchers and diplomacy experts have kept a tab on what’s happening on the diplomacy and strategy fronts. Many said the new immigration policy enforced by the US President may not be India-friendly, but it is a “temporary setback” as a lot is churning on other fronts to engage India as a vital partner in America’s fightback against the pandemic.
Aparna Pande, Director, Hudson Institute in Washington DC, said, “Immigration, like trade, was and will remain a problematic area between India and the US, but the relations between the two remain strong as ever, in all arenas–economic, strategic and people to people.”
Pande asserted her point by citing what’s been going on in the background on Indo-US strategic fronts. She told The Sunday Guardian: “The Indo-Pacific arena has witnessed a lot of activity in the midst of Covid-19. There have been Quad and Quad Plus meetings and discussions. India is collaborating with allies both bilaterally, regionally as well as in multilateral fora: UN, G-20 and others. This pandemic has only boosted India’s relations with the US, its European allies as well as Asian friends like Australia and Japan.”
Michael Kugelman, a South Asia expert at the US top thinktank Woodrow Wilson Center, told TSG: “One of the silver linings of the pandemic is that it has presented new opportunities for cooperation. We know all about the hydroxychloroquine story, but there’s potential well beyond drugs on this count. India and the US each have top-class physicians, epidemiologists, and medical researchers in universities and the public and private sector. This can all be leveraged for information sharing and new partnerships to help fight not just the current pandemic, but future ones too.”
Pande listed more room for the partnership to grow.
• Indian industries in the US–Mahindra Industries is part of the “Arsenal of Health” network in Michigan along with General Motors and Ford Motor Co. to manufacture personal protection equipment (PPE) for healthcare workers.
• US industries in India: Walmart has joined other US companies in donating PPE for Indian healthcare workers and is also contributing to funds set up to provide essential relief to farmers and small businesses.
• Vaccine production: Apart from efforts within India and the US, there is also an international collaboration of virologists at the University of Wisconsin–Madison with vaccine companies FluGen and Bharat Biotech to develop and test a unique vaccine against Covid-19 called CoroFlu.
Walter Andersen, a former State Department official and a keen India watcher, looks at the Covid-19 developments with an advice to maintain balance and restraint for a while. He put it frankly, “Trade with India could be adversely affected, at least in the short run.”
Andersen told TSG: “Our two governments over the past several years have established a broad range of agreements to work on energy, trade, health and agriculture–and security as well as several other areas (e.g. terrorism). The security angle is especially critical considering greater assertiveness of China in the South China Sea. In reaction to this, the US has just sent two warships (joined by another from Australia and rumours are that a Japanese ship will join them). Afghanistan is still another case of instability that could affect the security interests of both India and the US. Its domestic situation is yet to be resolved; the agreement with the Taliban is shaky at best. Then there is the uncertain nature of the post-virus revival of the world economies.”
He said: “There will be strong domestic pressures to cut back on any foreign dependencies in the rebuilding process. Fortunately, the Indian economy is driven, as in the US, by domestic spending and not trade, unlike China and Japan…But trade with India could be adversely affected, at least in the short run.”
However, Pande said India is in a unique position right now and it needs to be encashed. Many countries are asking their companies to leave China. Japan, a close Indian ally, is paying its companies to leave China. Many US and even European companies will pull out of China as well. “India, with its location, its massive labour pool and large consumer market, is the ideal country to attract these companies.”
But for that, India would need to reform its land acquisition policy, make it easier and cheaper to set up a business, undertake labour reforms, and institute a new industrial policy–something the economy will need post-Covid if India seeks to grow at 8-10% again.
Kugelman agrees, saying: “There’s still a lot of concern from the US business community about India’s investment climate, given issues with red tape and taxation among other issues. Certainly, the strength of the US-India partnership ensures that American financiers will keep trying to work around the problems, and to be sure there’s been much progress on this front, but this remains a problem area.”
Andersen added that India becoming the new business and investment hub for the US will largely depend on how robust India’s bounce-back will be–and whether it can take advantage of the US sourness at China–and what will be the effort to either bring jobs back to the US or flow to friendly countries like India.
Roadblocks apart, there is still unanimity in saying that Trump’s visit to New Delhi earlier this year positioned the bilateral relationship for ample growth beyond the security sphere. Energy is an area with ample potential for growth. Kugelman said, “A strategic energy partnership provides a nice platform to expand energy cooperation involving the private sector. Certainly, the major shock to energy markets during the coronavirus outbreak has injected ample volatility into this dynamic, but I do see the two sides coming out of the pandemic with continued momentum to push forward on energy collaborations.”
Andersen also feels that in boosting cooperation between the two democracies, there is ample scope. “The coronavirus issue has provided space in some areas, like the supply of drugs like hydroxychloroquine tablets. But some other areas should be addressed, such as Indian manufacturers being allowed to export fabric items for medical use, including masks. That would benefit Indian manufacturers now blocked by lockdown from markets as well as insatiable US demand for such items.”
But experts beg to differ from the Indian rhetoric against China building on in national media debates in New Delhi. Kugelman said, “I don’t think it will want to go overboard here. New Delhi has been very careful in its outreach to China, which one would expect with such a complex relationship. It’s easy to forget that each side has provided medical supplies to the other to combat the coronavirus, and diplomatic relations have been quite friendly over the last few years. India will want to focus on getting the pandemic under control at home, and not on picking fights with China in the way the US is recklessly doing.”
Andersen explained the logic behind it. He says: “Much depends on whether China threatens Indian interests in the South China Sea. I doubt if India even then will agree to any confrontational stance. However, it did so when China tried to block India’s construction on the Bhutanese/Indian/Chinese border tri-junction. So the degree of India’s response will depend on whether China’s action represented a security threat.”
Also, a point not to forget that even as a strong anti-China sentiment rules our minds and thoughts, experts are sceptical if a formal anti-China bloc would be a post-corona product. Business is on top of our minds, said Andersen, adding, “I doubt it as countries, even those in blocs like the EU, are focused on improving the well-being of their own economies.”
Kugelman added: “Multilateralism, with some fleeting exceptions, is more or less dead in the water right now. It’s each nation for itself, trying to fend off the pandemic within its borders. The test will be what happens post-pandemic, when economies are shattered and global trade is struggling, to try to revitalize multilateralism. At that point, the core great power dynamics will remain the same as before the pandemic: US-China rivalry will remain fierce.”
Kugelman signs off, saying, “The question will be how India and the rest of the world, battered and bruised from the pandemic, seek to position themselves in relation to that rivalry.”
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