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India's best Friend

Published by The New York Sun on 2005-07-13

No American president has done more to strengthen relations with India than George W. Bush.

He has recognized the market potential of the world's biggest democracy. He has seen the value of India as part of a new strategic alliance in Asia to counter China's growing economic and political clout. He has cannily calculated that in 20 years, India's economy may be as strong as that of America - and that U.S. self-interest suggests that bridge building between the two countries should be accelerated.

Indeed, India represents quite possibly the most significant foreign-policy success of the Bush Presidency.

Mr. Bush's embrace of this rapidly modernizing nation of 1.1 billion people has boosted bilateral trade to a record high, nearly $25 billion in 2004. It has resulted in regular joint exercises by the armed forces of both countries, and a new 10-year defence pact that was signed just last week under which U.S. weapons will be produced in India. It has speeded technology transfers. It has featured visits to India by top administration officials such as Secretary of State Rice, Secretary of Defence Rumsfeld, and Colin Powell, when he held Ms. Rice's job during Mr. Bush's first term.

Mr. Bush's positive view of India has opened up new investment opportunities for American companies that, not so long ago, despaired of cracking a growing middle class market of 400 million, the world's largest such cohort.

Unlike in other parts of the world where he's mostly reviled because of the Iraq war, Mr. Bush is generally popular in India, a country in which American culture has traditionally resonated well. Indians, who are characteristically given to conviviality and optimism, can identify with Mr. Bush's sunny disposition - even if, at the same time, some in the intelligentsia question his Iraq adventure and commitment to combating terrorism, a phenomenon that Indians know all too well on account of several historical insurgencies such as in Kashmir and Punjab states.

As the domestic economy gathers steam - last year it grew at a respectable 6.2% -- more jobs and purchasing power are being created for everyday people. Indians covet the consumer goods that American companies are increasingly bringing to a land 9,500 miles away from the world's second biggest democracy.

That those companies are able to do so at all is largely because of one man. He is Manmohan Singh, a slight, mild-mannered Sikh who fits the caricature of the turbaned brown skinned third-world denizen that Western cartoonists typically portrayed since India won independence from the British Raj 58 years ago.

More than a decade ago, when he served as finance minister in an earlier administration, the one-time socialist and World Bank bureaucrat began untangling a complex system of licenses and permits that hampered industrial growth and discouraged foreign investors.

Those investors are looking afresh at India, whose left-leaning governance had also long been viewed with wariness by policy makers in Washington. American presidents, and particularly their secretaries of state, were distrustful of the favoritism toward the erstwhile Soviet Union shown by Indian icons such as Prime Minister Jawaharlal Nehru and his daughter, Indira Gandhi, who also served as prime minister until her assassination by Sikh bodyguards in her New Delhi garden in 1984.

Mr. Singh is now India's prime minister, and next week he's coming to Washington at President Bush's invitation. The visit, which includes an address before a joint session of Congress by Mr. Singh, will be symbolic as well as substantive.

The symbolism lies in the fact that this is Mr. Singh's first state visit to America since he became prime minister in May 2004, after his Indian national Congress succeeded in cobbling together a tenuous coalition of 14 parties and groupings. It also lies in the fact that the visit is the first part of a two-part mutual agreement worked out between him and Mr. Bush. The second part will come to fruition when the president goes to India toward the end of the year, making that his first trip to the Subcontinent.

There is also a symbolism that ranges beyond diplomacy. More than a dozen Americans of Indian origin serve in high positions in the Bush Administration. Their selection reflects the growing influence of the Indian-American community in America, now believed to be 2.5 million. An Indian, Bobby Jindal, Republican of Louisiana, is a member of the House of Representatives. Mr. Bush is certain to say that Indians are no longer just physicians, engineers and computer whizzes; they have reached the upper echelons of policy making in America.

What he's unlikely to say - but certainly appreciates - is the fact that Indians have been among Mr. Bush's biggest campaign contributors since he first ran for governor of Texas. And this reflects the fact that, according to the U.S. Census Bureau, Indians now have the highest average annual income of any ethnic group - more than $75,000. They are not only entrepreneurs but also top executives at major American corporations. They are not only voters but also mostly Republicans.

The substantive part of the Singh-Bush discussions is likely to be more sober.

India is annoyed that Washington is supplying its bitter rival Pakistan a new contingent of sophisticated F-16 fighter jets. It is perturbed that many American policy makers still push the concept of parity between India - whose gross domestic product is $650 billion - and longtime U.S. ally Pakistan, whose GDP is barely a sixth of that. It is irritated that America is still hesitant about transferring nuclear know-how for civilian use on the grounds that India, which already possesses nuclear weapons, may use that technology for less than peaceful purposes.

And India is irritated that American investment in India is still little more than a trickle - barely 50% of the $4 billion foreign direct investment (FDI) that India receives each year. In contrast, three-fifths of the $54 billion that China receives in FDI is from American sources.

Mr. Bush may or may not say it, but the main barriers to more American investment in largely English-speaking India are its relatively poor infrastructure and its extensive corruption. He may or may not say it, but the outsourcing of some 100,000 jobs to India by American companies is starting to become a political issue in the U.S.

He may or may not say it, but many American policy makers question the durability of the Singh government, whose survival depends on the parliamentary support of India's two Communist parties, which vehemently oppose any American involvement in India's economy.

Still, whatever is said or not said between President Bush and Prime Minister Singh, at least they will know what's on each other's mind. And that may augur well for bilateral relations between America and India.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist


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