January 24, 2017

What Trump's TPP Withdrawal Means For India

The following article originally appeared in NDTV on January 24, 2017. 

In one of his first acts upon assuming office, Donald Trump signed a presidential memorandum confirming the U.S. withdrawal from the Trans-Pacific Partnership (TPP). This move did not come as a surprise. As a presidential candidate, Trump had vociferously campaigned against what he described as bad or unfair trade agreements that the United States had signed onto, claiming that they had led to the loss of American jobs. Among his targets of criticism were the North American Free Trade Agreement (NAFTA) of 1994 and the United States accepting China into the World Trade Organisation in 2001. But Trump had reserved particular opprobrium for TPP, which was successfully agreed only last February and was awaiting ratification.

TPP is a weighty and complex agreement negotiated painstakingly by 12 countries: the United States, Canada, Mexico, Peru, and Chile in the Americas, and Japan, Australia, Vietnam, Malaysia, Singapore, Brunei, and New Zealand in the Asia-Pacific. Together, they comprise almost 40 percent of the world's gross domestic product. The rationale for many negotiating members was to re-engage the United States as a trading partner and - by collectively raising standards - balance what were sometimes one-sided trade relationships with China. A TPP minus America, even if that were possible (ratification by the United States was necessary for its entry into force), makes it far less attractive for most members.

There are several common misconceptions about TPP. One is that it is simply a trade agreement, when it is actually much more than that. Not only does TPP slash tariffs, it contains anti-corruption measures, intellectual property obligations, human rights and child labour conditions, and environmental commitments. As a result, neither India nor China would have been ready to sign on. Comparisons that are often drawn in India with the proposed Regional Comprehensive Economic Partnership (RCEP) - which includes China and India, but excludes the United States - are not entirely apt. Countries that are party to both negotiations - Japan, Australia, Malaysia, Singapore, Brunei, Vietnam, and New Zealand - do not see one as a replacement for the other.

A second misconception is that TPP is directed against China and India. This is only partly true. Officials from TPP countries would often reiterate that China and India were hypothetically welcome to join TPP at a later stage, as long as they met its conditions, knowing full well that this could not happen in the short-term, if ever. China's entry would offset many of its comparative advantages, while India's would probably have required (among other things) a much higher stage of development. While TPP is anti-China only in that it made the United States and Japan much more competitive with fellow members, it was anti-India only in that it reflected a frustration with New Delhi's obduracy on trade negotiations at the WTO. While many in New Delhi portrayed TPP as a punitive measure, India's exclusion was, at most, collateral damage.

That said, both China and India would have been disadvantaged by TPP's entry into force, although not significantly. According to projections made in a working paper by the Petersen Institute for International Economics, the impact of TPP for both China ($9-20 billion) and India ($2-6 billion) would have been about 0.1% of GDP by 2030. South Korea and Thailand, by contrast, would have been much more significantly affected, by as much as 0.4% and 0.8% of GDP, respectively.

A third misconception, and one that Trump exploited, is that TPP would lead to a loss of U.S. jobs. The rationale Trump has given for withdrawing from TPP is that it disadvantaged American industry, workers, and wages, and that he believes in dealing "directly with individual countries on a one-on-one (bilateral) basis in negotiating future trade deals."

This is not entirely convincing. American industry has disagreed with Trump's assessment, calling TPP  "America's best chance to ensure the United States isn't stuck on the outside - looking in - as Asia-Pacific nations pursue new trade accords among themselves." Moreover, according to the Petersen Institute study, TPP would have led to only a 0.1% increase in U.S. labour market churn and added 9% to U.S. exports by 2030. But rather than try to sell the economic benefits in a less-than-conducive American political environment, the administration of Barack Obama tried to project it as a national security imperative, with  U.S. Secretary of Defense Ashton Carter saying that "passing TPP is as important to me as another aircraft carrier." Trump's advisors argued, convincingly, that TPP did nothing to curb China's assertiveness in the Asia-Pacific.

It is hard to see who exactly benefits from the United States' withdrawal from TPP. Certainly, U.S. industry and other TPP members will be disappointed. Indeed, this could be seen as a massive self-goal for the United States. Trump's decision has already been criticized by some American political leaders, including fellow members of the Republican Party. Trump will gain credibility with some of his base by actually fulfilling one of his more contentious campaign promises, but that base is weak to begin with, and unless there are tangible gains in manufacturing jobs (due to other factors), the electoral impact is likely to be negligible.

Nor will China or India derive significant benefits from the demise of TPP, other than a short-term respite. The urgency to complete RCEP will now diminish, and it is possible that greater complacency will set in regarding the need to rethink trade in a more protectionist global environment. TPP - while no boon for India - offered the best hope for a more openly competitive international trade order from which India, with its competitive wages and underutilized potential, still has possibly the most to gain. This sentiment was echoed by Prime Minister Narendra Modi in New Delhi only last week. "Walls within nations, a sentiment against trade and migration, and rising parochial and protectionist attitudes across the globe are...in stark evidence," he said. "The result: globalization gains are at risk and economic gains are no longer easy to come by." All in all, Trump's withdrawal from TPP will likely be remembered as a significant step in the slide towards a more protectionist world. 

January 20, 2017

Passing the Baton

The following article originally appeared in Mint on January 20, 2017.

With Donald Trump taking over as US President from Barack Obama, what legacy does he inherit? How could the change in administration in Washington affect India, directly or indirectly?

Bilateral Issues

Immigration: Trump campaigned on anti-immigration sentiment, but sometimes tried to make an exception for high-skilled immigration, which includes the H-1B visa programme that benefits Indian IT professionals. There is also considerable hostility to H-1Bs in the US Congress, among both Republicans and Democrats. On the other hand, Indian companies and Silicon Valley will continue to lobby in favour of the programme at the current level. We might see a moderate scaling back of high-skilled immigration under Trump.

Investment: Trump’s ‘America First’ economic approach, which has included using social media to call out major US multinationals that were planning on taking manufacturing abroad, will conflict directly with Modi’s ‘Make in India’ campaign. We may see some companies becoming reluctant to move operations overseas, particularly manufacturing. But several multinationals, particularly in services, have already made plans to expand their Indian operations significantly. We can expect this to become a sore point, but not necessarily an unmanageable one.

Defence trade: This is an area that has seen a significant expansion over the past few years. While defence technology transfers may become more difficult, or at least a lower priority with the departure of secretary of defence Ashton Carter, the new administration should have no problem with India buying American arms off the shelf. While potentially useful in some areas, this will complicate India’s quest for defence technological self-sufficiency.

Regional issues

Afghanistan and Pakistan: Afghanistan received surprisingly little attention during Trump’s campaign and his Pakistan policy remains somewhat uncertain. While Trump and his advisors have promised to take a tougher approach to terrorism and have been critical of Pakistan’s double-dealing, the amount of attention and resources they would be willing to devote to the continuing Afghan War is uncertain.

China: Trump has promised a more confrontational diplomatic and military approach to China, while scaling back economic involvement in the region, including the Trans-Pacific Partnership that excluded both China and India. These steps will not be wholly unwelcome in New Delhi, but an unmanageable military or economic conflict between Beijing and Washington would benefit no one, and certainly not India.

The Indian Ocean: The Indian Ocean is becoming more contested, and while the US does have a permanent presence, there remain opportunities for India to play a bigger role. If India is able to sell itself as a country willing to share the burden of maritime security, that should resonate well with the new White House, just as it did with the old one.

Iran: The Iran nuclear agreement was one of Obama’s biggest breakthroughs, and one New Delhi welcomed. It enabled the lifting of international sanctions against Tehran, allowing India to access Iran’s energy resources and resume its investments in the Chabahar port project.

While Trump has spoken of walking back on the Iran deal, it is unlikely to make much of a difference for India. Other actors—notably Europe—will probably not follow suit in imposing sanctions on Iran if Tehran has not violated the deal. This would alleviate pressure on India to follow suit.

Global affairs

Climate Change: In contrast with the Obama administration, climate change is unlikely to be a high American priority under Trump. But a decrease in government-to-government cooperation does not necessarily prevent India from securing cooperation and technology transfers from the US private sector on renewables.

Terrorism: Trump has talked tough on terror. One of the biggest developments in India-US relations since the 2008 Mumbai attacks has been deeper counter-terrorism cooperation. We can expect this to continue, and intensify.

Global governance: Multilateral affairs and changes to global governance, whether at the UN or non-proliferation regimes, are unlikely to be high priorities under Trump. India had a window of opportunity to gain membership to the Nuclear Suppliers Group at the tail end of the Obama years, but it will now have to wait a few years more.

January 15, 2017

Barack Obama Leaves a Mixed Legacy

The following article appeared in the Economic Times on January 15, 2017.

Eight years ago, on a freezing January morning, I stood with over a million people on the National Mall in Washington DC to watch a 47-year-old African-American senator become the 44th US president. There was a pervasive sense at the time, particularly among young, highly educated and urban Americans, that Barack Obama could do no wrong. He campaigned on the lofty themes of hope and unity and in opposition to the economic and foreign policy overreach of the George W Bush years. He would fix the economy, heal deep societal wounds once and for all and burnish America’s image around the world. Yes, he could.

Today, as Obama’s tenure comes to an end, one can’t help but wonder the extent to which his legacy will be shaped by the election of his successor, Donald Trump. Trump campaigned on fear, outrage and grievances, and he successfully exploited fissures in American society. Even critics will accept that Obama brought a certain dignity to his office, something Trump has tarnished even before his inauguration. But however much supporters of both men will bristle at the notion, there is also a considerable degree of commonality between the two. It is possible to see Trump not just as a counterpoise but also a continuation of Obama.

It is helpful to look at Obama’s legacy along three dimensions. The first, and one he gets too little credit for, is in his handling of the economy. Obama inherited an America coming off its worst financial crisis in 70 years. The recovery has been gradual and steady; certainly not eye-catching but nonetheless impressive. The economy has grown 26% in dollar terms since 2008, it has experienced a second dotcom boom, and the US for the first time became a serious energy exporter with the shale revolution.

Unemployment, which peaked at about 10%, is now back to pre-crisis levels. This is not at all an accident or good fortune. Bailing out and restructuring the automotive industry was only one of the bolder, and more unpopular, decisions that had to be made. A lot of this gets overshadowed by the not-so-good news: growing inequality and a lower labour participation rate. Nonetheless, the foundational strength of the United States is immense; its latent power should not be underestimated.

Not Much Hope and Change
If Obama gets insufficient credit for his handling of the economy, his domestic political and social legacy is much more mixed. His eight years were marked by a difficult relationship with a Republican-dominated Congress. Obama also had few friends and allies on the Democratic side of Congress, making it more difficult for him to push his domestic agenda. Healthcare reform, his cardinal domestic policy legacy, was watered down, becoming a messy behemoth that did not sufficiently address the central issue of rising healthcare costs. Obama himself admits his failure to do anything on other matters that were dear to him, such as gun control.

And certain African-American commentators wonder exactly what his presidency accomplished to improve the standing of minorities, particularly given the large number of police killings of African-Americans. Hope and change, it turned out, proved far better slogans than governing principles.

US and Them
Finally, foreign policy could well prove the area where we will look back upon the past eight years most critically. Obama often brought a professorial, Socratic approach to key meetings on foreign policy and national security, playing devil’s advocate and questioning truisms. But professors often make terrible decision-makers.

On Syria, Libya and Afghanistan, Obama adopted middle-path solutions, which turned out to combine the worst of every possible outcome rather than the best. The Afghanistan war — the “good fight” for Obama when he was a presidential candidate — is unresolved and likely to intensify. Syria could be the most costly conflict in lives and treasure since the end of the Cold War, a humanitarian crisis that the US both actively and passively fanned rather than dampened.

But those are only the most egregious examples. The administration waffled (not once, but twice) on its approach to China, the pivot or rebalance to Asia proving too little, too late. Osama bin Laden was killed in a risky, bold operation but the underlying reasons for his presence in Abbottabad were conveniently brushed aside. The Russia reset lies in tatters, as do the much vaunted outreach to the Muslim world and the nonproliferation spirit invoked in Prague. On India, after laying the groundwork for a transformed relationship, the administration stepped back — rather than stepped up — in its last six months, in contrast to both Bill Clinton and George W Bush. The prospects of a two-state solution in the Middle East seem bleaker than ever.

Even Obama’s signature foreign policy achievements — the Paris climate agreement, the Iran nuclear agreement, and the Trans-Pacific Partnership — all now face uncertain futures, given the opposition of Trump and the US Congress. If Franklin D Roosevelt and Harry Truman were, in the famous words of one of their top advisors, “present at the creation” of the post-World War II international order, we may look back upon the Obama-Trump years as being present at its destruction.

This is where the commonalities between Obama and Trump come into play. Both share a gift for storytelling, and a strong but sectional electoral appeal. Both have proved guilty of promising simple solutions when none necessarily exist. And both share an instinct of restraint, although motivated by very different impulses. “Don’t do stupid shit,” was Obama’s foreign policy mantra, and Trump might very well agree. But sometimes, that’s necessary. Presidential legacies take time to evolve.

Truman, John F Kennedy, Ronald Reagan and Clinton were incredibly unpopular and divisive in their times, but are now remembered more fondly. By contrast, Lyndon Johnson and Richard Nixon were far more popular than many now choose to remember. Obama leaves office with an approval rating of over 55%, comparable to both Reagan and Clinton. History, like with every other president, will judge him on subsequent events. 

January 10, 2017

Donald Trump’s team and its India policy

The following article originally appeared in Mint on January 10, 2017.

It’s a parlour game played in many capitals around the world: Who is to get what senior position in government? And what can the backgrounds and viewpoints of those appointed tell us about changes in policy? Nowhere is this more relevant than during a presidential transition in the US, a massive undertaking in which more than 2,000 senior government positions and many more subordinate ones change hands. The economic and military importance of the US naturally increases global interest and speculation about those elected or selected to senior leadership positions.

Indian interest in US president-elect Donald Trump and his team is therefore natural. India-US ties are never problem-free even at the best of times, but the US is nonetheless India’s most important global partner. Ever since Trump’s election to the presidency in November, US officials have been at pains to emphasize the bipartisan nature of recent American engagement with India, implying that individuals will matter little to the overall trajectory of bilateral relations. This is only partly true. If Trump’s election has shown one thing, it is that personalities matter.

The first one to consider will be Trump himself: He famously stated last year that on foreign policy he is his own top advisor. He has already shown himself to be unpredictable, voicing his views on social media without necessarily indicating whether these are reflective of his administration’s policies. He is also evidently a man of strong likes and dislikes. Thus, his initial interactions with Prime Minister Narendra Modi and their personal dynamic will be very important for the short-term relationship with India.

A second individual who matters is Mike Pence, who could very well turn out to be one of the most powerful vice-presidents in American history. Pence has already met with Indian officials following his election and in 2008 voted in favour of the India-US civilian nuclear agreement while a member of the House of Representatives. All this suggests that he is generally positively disposed to the relationship with India.

Trump’s expected national security advisor, retired lieutenant-general Mike Flynn, comes from an intelligence background, much like his Indian counterpart. While Flynn has made waves for his inflammatory rhetoric, there are hints of a natural meeting of minds with Indian officials. In his book The Field Of Fight: How We Can Win The Global War Against Radical Islam And Its Allies, Flynn critically details Pakistani perfidy on terrorism, an issue about which he had first-hand knowledge as head of intelligence for US forces in Afghanistan and later as director of the Defense Intelligence Agency.

The likely nominee for secretary of state, Rex Tillerson, is among the biggest surprises among Trump’s cabinet picks. Tillerson, till recently the head of energy giant ExxonMobil, forged his reputation on a successful deal with Russia’s state-owned Rosneft for the Sakhalin-I oil and gas project. India’s ONGC Videsh Ltd bought a 20% stake in the project, although not without some delays and complications. Tillerson has a good reputation as a manager, but how much sway he will have on policy at the top levels is uncertain.

Then there is James Mattis, a legendary Marine commander and highly respected scholar-warrior, who is expected to be Trump’s secretary of defence. Mattis’ background has involved working in the North Atlantic Treaty Organization and overseeing the US Central Command, which covers Afghanistan and Pakistan but not India. As such, his exposure to Indian views has been limited. Compared to the outgoing Ashton Carter, Mattis is less likely to play a guiding role in India policy. But among other things, he will have to get up to speed on the maritime dynamics of the Indian and Pacific Oceans, where India is uniquely positioned to play a burden-sharing role.

Finally, Peter Navarro, an economist, is expected to help manage trade policy in the Trump administration. Navarro is the author of the book Death By China: Confronting The Dragon—A Global Call To Action, which describes the threat to US economic primacy posed by China. In this context, India—as an investor in the US economy and a net importer of goods from the US—is well placed to advocate an enhanced and balanced economic partnership.

Although no one—not even senior members of the US government—has a clear idea of the directions policy will take under Trump, we can already get glimpses of positives, negatives, and uncertainties from India’s point of view. On the positive side, an expected thawing of US relations with Russia under Trump and the likely withdrawal of the US from the Trans-Pacific Partnership will be welcomed in New Delhi. We can also expect counter-terrorism cooperation to increase. By contrast, Trump’s public criticism of overseas investments by US corporations will conflict with Modi’s campaign to attract US companies to “Make In India”, while the new administration’s anti-immigration rhetoric—including on H-1B visas—could hurt Indian information technology companies.

The uncertainties for India will concern four broad areas. One will involve the nature of US-China relations. India could leverage a more competitive relationship to its benefit, in terms of commercial opportunities and military technologies. But equally, a return to a notion of realms of influence or the exploration of a modus vivendi between Washington and Beijing could put India at a disadvantage. A second area of uncertainty concerns Afghanistan and Pakistan. Will Trump’s generals be persuaded, initially, by Rawalpindi? Or will a strong counter-terrorism instinct prevail? Third, can win-win economic and trade solutions be found in an increasingly protectionist political environment? And finally, what approach will the Trump administration take on multilateral affairs and global governance?

Whatever the outcomes, there will be growing pains, and those taking over at the helm of US government will have to be familiarized with Indian views on a wide range of issues, including on terrorism, trade, immigration, and military technologies. Like any new administration, it will take time to get settled. But in each area, and with each personality, there are clear opportunities for India to seize.

Australia-India relations: Poised for take off

The following post appeared originally in The Interpreter, the blog of the Lowy Institute, January 10, 2017. An excerpt is below and the full text can be accessed here.

In this context, Australia’s relations with India (along with Japan) have the potential to assume greater prominence. Australia-India relations have come a long way from a low point around six to eight years ago. In 2008, the Kevin Rudd government pulled out of the ‘Quad’ security partnership with India, Japan, and the United States, creating lasting doubts about Australia’s commitment to plurilateral security. Australia also had in place a uranium ban on India, which remains a non-signatory to the Nuclear Non-Proliferation Treaty. Between 2008 and 2010, attacks on Indian students and taxi drivers received considerable attention in the Indian media, colouring Indian public perceptions of Australian society. But today, Australia’s strategic orientation has been clarified by a series of defence white papers, the uranium ban has been lifted, and Australia remains a preferred destination for Indian university students looking to go overseas.  Prime Minister Narendra Modi’s 2014 visit also helped turn a new leaf on the relationship. The basis for improved ties is certainly stronger, and Australia – despite much self-criticism about not having invested enough in relations with India – has in fact done better than most in cultivating New Delhi.

January 9, 2017

It’s time to resuscitate the Asia-Pacific Quad

The following article appeared in Order from Chaos, the blog of the Brookings Institution. An excerpt is below and the full text can be accessed here.

[T]he rationale for a similar arrangement today is even greater and the political circumstances are also more favorable. Having returned to power, Abe has radically reformed Japan’s national security structures. India’s Prime Minister Narendra Modi has been diplomatically active and has prioritized a closer partnership in the Indo-Pacific with the United States and Abe’s Japan. For many years, questions remained about Australia’s commitment and inclination, colored by Rudd’s unilateral decision to withdraw from the Quad. But while the Australian economy remains heavily reliant on resource exports to China, Canberra is not under any illusions about its strategic orientation. In fact, developments in the South China Sea and Indian Ocean seem to have hardened the resolve of Australia’s security establishment. There is also a case for including more countries into an emerging soft security architecture for the region, including possibly Indonesia and the Philippines.

January 7, 2017

भारत की सैन्य कूटनीति के सामने चुनौतियां

The following article on India's military diplomacy, appeared in Hindi on the Observer Research Foundation web site. An excerpt is below, and the full text can be found here.
इस बात से इंकार नहीं किया जा सकता कि भारत की आजादी के बाद के इन सात दशकों के दौरान अंतर्राष्ट्रीय मामलों में सैन्य बलों की प्रकृति में बदलाव आया है। भारत को बड़ा परम्परागत युद्ध लड़े लगभग 45 साल बीत चुके हैं और उसके बाद भारत द्वारा परमाणु हथियार बनाने, भारत और उसके पड़ोसियों के बीच बदलते वाणिज्यिक, राजनीतिक और सामाजिक रिश्ते और श्रीलंका में आतंकवाद-विरोधी कार्रवाई में भारत के भाग लेने सहित घटनाओं ने बड़े पैमाने पर युद्ध की संभावनाओं को और घटा दिया है। हालांकि भारतीय सशस्त्र बलों की संरचना और तैयारियों को अब तक इन बदलती परिस्थितियों के अनुरूप नहीं ढाला जा सका है।
सैन्य कूटनीति मानी जा सकने वाली गतिविधियों में से एक व्यापक फ्रीक्वेंसी और विजिबिलिटी — और उसके परिणाम के व्यापक महत्व को अपेक्षाकृत नजरंदाज किया गया। शांतिकाल में और एक ऐसे अंतर्राष्ट्रीय वातावरण में, जहां भारत के कुछ घोर विरोधी और अनेक साझेदार हैं, ऐसा होना स्वाभाविक है। वैसे सैन्य कूटनीति अथवा रक्षा कूटनीति की कोई सार्वभौमिक परिभाषा तो नहीं है, लेकिन कहा जा सकता है कि यह स्पष्ट तौर पर कूटनीतिक उद्देश्य से की जाने वाली कोई भी सैन्य गतिविधि है, या दूसरे शब्दों में कहें कि ये ऐसी गतिविधियां हैं, जिनका प्रमुख उद्देश्य अन्य देशों में भारत के प्रति सदभावना को बढ़ावा देना है।
भारत ने ब्रिटिश राज से विरासत में मिले विशाल, पेशेवर सैन्य बल, अपने आकार और खुद को उपनिवेशवादी युग के बाद की दुनिया के नेता के रूप में प्रस्तुत करने के गुणों की बदौलत, लगभग आजादी के बाद से ही विदेशों के साथ अपने संबंधों में सैन्य कूटनीति का उपयोग किया है। लेकिन हाल के वर्षों में सैन्य कूटनीति की बढ़ती मांग और आकर्षण की वजह से उसे अनेक गतिविधियों के लिए बड़े पैमाने पर संसाधन, कर्मियों और उपकरणों की आवश्यकता होगी। इनमें विदेशी अधिकारियों को प्रशिक्षण और शिक्षा देना, दूसरे देशों में बड़े पैमाने पर ध्यान आकर्षित करने वाले सैन्य दौरे और विदेश में मानवीय सहायता एवं आपदा राहत के प्रयास (एचएडीआर) शामिल हैं। बेहतर सैन्य कूटनीति के लिए संसाधनों से कहीं ज्यादा बढ़कर, सेनाओं के बीच, भारत के सैन्य और नागरिक नेतृत्व के बीच और रक्षा मंत्रालय और विदेश मंत्रालय के बीच ज्यादा निकट सहयोग की आवश्यकता है।

November 29, 2016

How to Tame a Dragon

The following article originally appeared in The Times of India on November 29, 2016.

To deal with Chinese muscle in a post-American world, India must think asymmetrically

The election of Donald Trump as US president has unleashed further uncertainty on a world already in considerable flux. Trump has promised economic protectionism, reversals on immigration and militarism against terrorists, but has outlined few concrete policies. Much will depend on his cabinet appointments and his ability to work with US Congress and bureaucracy.

Whatever path the US takes going forward, the actions and orientations of China and India – and the relationship between the two – will have even greater implications for the international system. China and India have two of the world’s four largest militaries, both of which are modernising. They also remain among the fastest growing major economies: China’s is second behind the United States and India could well be the third largest by 2030.

All countries have a grand strategy, whether or not they know it. But the Chinese government under Xi Jinping and the Indian government under Narendra Modi have been clearer and bolder than many of their predecessors in articulating what they would like to achieve nationally, regionally and globally.

China’s current leadership has adopted three big concepts. The first is the Chinese Dream (or China Dream), which aims to make China a “fully developed nation” by 2049 as part of the “great rejuvenation of the Chinese nation”. The second is the Belt and Road Initiative (also known as One Belt, One Road), an ambitious effort to export excess industrial capacity and thereby extend Chinese strategic influence to Central and Southeast Asia, Pakistan and West Asia, and on to Africa and Europe. The third is a ‘New Type of Great Power Relationship’, the idea that China and the United States can recognise one another as peers and respect each other’s spheres of influence.

India has its own equivalents. Make in India is a campaign to accelerate India’s economic development through increases in manufacturing, large-scale employment and boosts in exports. ‘Neighbourhood First’ attempts to preserve India’s regional primacy through diplomatic attention, connectivity and assistance, while Act East is meant to improve India’s connectivity eastwards while deepening security and institutional partnerships. Finally, the notion of ‘India as a Leading Power’ outlines India’s ambition to become a great power in a multipolar world.

Make in India finds some natural complementarities with the economic dimensions of the Chinese Dream. Should China evolve into an advanced consumer- and services-driven economy, an India that boosts manufacturing and exports is necessary and should (from Beijing’s point of view) be desirable. But for now, both China and India appear to be struggling with their internal economic transformations. There is less overlap between China’s One Belt, One Road and India’s Neighbourhood First and Act East policies. Security competition between China and India in South Asia is intensifying, although Southeast Asia offers some avenues for mutually beneficial economic cooperation. Finally, a ‘New Type of Great Power Relationship’ is at complete odds with India as a Leading Power: a world run by two countries leaves little space for others.

Given China’s overall trajectory and the concerns shared by many of its neighbours, the onus today is on Beijing to ensure a more cooperative international environment. Should China make efforts to move from a territorially revisionist to a status quo power, from a mercantilist to a market economy, from an opaque to a more transparent political system, and from a violator to an abider of norms on non-proliferation and freedom of navigation, India (and indeed most others) should have every reason to celebrate and facilitate its rise and deepen cooperation. But there are few indications to date that China is moving in these directions. For now, an opaque, mercantilist, revisionist, and delinquent China is here with us to stay and, more importantly, is primed for ascendancy.

In the absence of positive signs, India must be prepared for a more competitive approach to China. It must double down on its efforts at improving connectivity with South and Southeast Asia, including infrastructure projects, facilitation agreements and institutional cooperation. India must also clearly delineate behaviour that fundamentally threatens its interests in its immediate vicinity and act decisively to advance those regional interests. It will have to deepen its security and commercial partnerships with like-minded countries in the region, including the United States, Japan, Australia, Singapore, Indonesia and South Korea.

And India may even have to start thinking asymmetrically about China. This might involve engaging more with Chinese civil society, being more mindful of overseas Chinese facilities, reviewing aspects of market access, developing offensive capabilities with respect to new technologies, and contrasting itself with China at global governance forums. All the while, New Delhi must constantly remind Beijing that the successful rebalancing of the Chinese economy can be win-win for both countries.

The United States will not disappear as a global power overnight. But it would be a mistake to respond to Trump’s election with business as usual. Few priorities will be as important as rethinking Sino-Indian relations in a transformed international environment.

November 27, 2016

‘India should be less worried about trade with US than others’

The following interview originally appeared in The Business Standard on November 27, 2016. 

After a long hiatus, a Republican has become the President of the United States. And it is not just any old Republican but Donald Trump, who is above all, a man who understands business and finance. What does his becoming US President mean for South Asia as a region and India in particular?

Since the end of the Cold War, India has largely preferred working with Republicans or even centrist Democrats, as they have been more open to trade and immigration and generally hawkish on foreign policy matters, and consequently more supportive of India’s rise. Republicans in the U.S. Congress were among the biggest advocates for lifting sanctions against India after the 1998 nuclear tests, and of course George W. Bush played a major role in the transformation of bilateral ties. But in his successful presidential campaign, Trump has thrown out many elements of the traditional Republican platform on social, economic, and foreign policies. I would, in addition, question his business acumen. By his own count, Trump has declared bankruptcy four times, and he still mostly reaps the benefits of a large inheritance.

So Trump and his administration come into power as somewhat blank slates on India and our neighbourhood. A few key elements of Trump’s broader policies are already discernible, especially on trade, where he has reiterated his promised to withdraw from the Trans-Pacific Partnership. However, many other issues of importance to India will depend on the team that Trump surrounds himself with, including on terrorism, immigration, non-proliferation, and climate change. A more managerial Secretary of State or a Secretary of Defense with greater experience to India’s west may mean a bumpier ride for India, at least at the beginning. And of course a career bureaucracy and large U.S. military will ensure an element of continuity in U.S. policy, for better or worse. While no one – not even Trump himself – knows exactly what policies he’ll be able to implement, there is a big opportunity right now for India to shape a favourable outcome from his election. New Delhi needs to seize it, and there are signs that it already is doing so.

A lot has been said about his views on immigration. Do you consider this a matter of crucial importance in Indo-US ties?

Immigration to the United States is a big issue for India. There are over three million Indian-Americans, and they comprise the wealthiest and highest-educated ethnic group in the United States. Many Indian-Americans have maintained close ties with India, and are among the most important foreign investors. Through ups and downs, Indian-Americans have provided a natural bridge between the two countries, ensuring that India’s relations with the United States are on a fundamentally different plane from India’s relations with other large and powerful countries such as China, Japan, or those of continental Europe. U.S. efforts at stemming immigration could, therefore, have a negative effect for bilateral relations, making the United States a more “normal” country from India’s point of view: just another partner with which to do business.

It is at present unclear whether a Trump administration will be willing and able to distinguish between low-skilled and high-skilled immigration, or between permanent and temporary migrants. Indian industry, in particular, will be paying a lot of attention to the future of the H-1B visa regime, which has benefited both countries significantly. Additionally, many Indians – and I include myself here – have benefited from studying and working in the U.S. before returning to India. Consider Indian industrialists such as Ratan Tata or the Ambanis or Anand Mahindra, or political leaders like Piyush Goyal or Jayant Sinha or Shashi Tharoor, or any number of prominent Indian academics, intellectuals, and activists.

Should New Delhi be concerned about his position on trade?

India should be less worried about trade with the U.S. than others – notably, China, Japan, Southeast Asia, and Europe. That’s because the Indian economy simply isn’t as dependent on trade with America as most others. In fact, more often than not, trade issues were proving an irritant in bilateral relations. The Trans-Pacific Partnership, for example, would have put India at a short-term disadvantage. Trump’s promise of imminent withdrawal from the TPP will therefore give India some breathing room and respite. That said, trade in services could possibly suffer from a more protectionist United States, and the Modi government may find it slightly harder to fulfil its promise of boosting Indian exports.

Will Trump’s election mean a recalibration of Sino-US relations, and as a result, some instability in Asia?

There will certainly be changes in Sino-U.S. relations, but there are wildly different indications about the nature of that change. Some of Trump’s advisors have articulated an Asia policy that involves a major U.S. naval build-up in Asia coupled with more barriers on trade. Militarily and politically, this might mean a closer relationship with India, Japan, and others who share concerns about China’s rise and military modernization. It may also lead to a rethink in Beijing about its own military ambitions. Alternatively, an unwillingness or inability to see through a military build-up by the United States or a dilution of U.S. alliance structures in the Asia-Pacific could lead to greater Chinese adventurism, which India would clearly not welcome.

There are equally contradictory signals on the economic side. If a decision to stop facilitating China’s economic rise is coupled with a shift towards deeper economic and commercial cooperation with India, it would obviously be a great benefit. The argument in favour of such an approach would be that India’s economy is not state run, even if it is overregulated, unlike China’s where business is still dominated by state-owned enterprises. At the same time, India should be concerned about a potential trade or currency war between the U.S. and China leading to a race to the bottom.  A still fragile Indian economy could be collateral damage.

What does his election tell us about American society?

While Trump’s presidency may in fact prove beneficial for India in certain ways, I’m not sure it reflects particularly well on the United States as a country or as a society. Most of the 62 million Americans who voted for Trump may not share the views that he has articulated or tolerated regarding minority groups and women. But equally, those who voted for Trump evidently felt that his condemnable and divisive rhetoric did not disqualify him from the presidency. Trump has already tried to distance himself from some of his white supremacist supporters, but there is no question that some will now feel empowered.

The United States has long distinguished itself as a country open to immigrants from many countries. Today, more than 13 percent of Americans were born abroad. The United States has also been quite successful in dealing with issues of multiculturalism, particularly relative to the nation states of Europe, including the UK, France, and Germany. Trump’s election is, in that sense, a setback for the United States, and will undoubtedly affect America’s international appeal or soft power. Of course, this could all be a temporary blip, much as Barack Obama’s election seems in hindsight. The United States has exhibited an ability to self-correct under much more adverse circumstances in the past. Nonetheless, we should expect a period of much more open fissures in American society, between rural and urban America, Republicans and Democrats, men and women, rich and poor, and whites and non-whites.

November 13, 2016

Donald Trump as US President: For India, it's opportunistic, but concerns remain over his Asian policy

The following article originally appeared in The Economic Times magazine on November 13, 2016.

With the election of Donald Trump, we have seen the biggest shock to US politics in 70 years. Trump was given only a slim chance of victory. He had no previous experience as a public servant and few detailed policy positions. His nomination by the Republican Party came against the preferences of American big business. He alienated most leaders of his own party by making outrageous statements about minorities and women. And he had paid little attention to political organisation and had not performed particularly well in the presidential debates.

And yet, somehow, he pulled off an improbable victory, with wins in the states of Pennsylvania, Wisconsin and Michigan proving decisive. His victory has exposed deep divisions in American society, galvanised anti-establishment sentiments and injected a great deal of policy uncertainty at home and abroad. But Trump was remarkably consistent in his message. On the campaign trail, he focused primarily on domestic issues: jobs, healthcare, immigration and terrorism. Anti-globalisation feelings — a general retreat of America from international affairs — may be here to stay. So will strains of xenophobia, which should not be overlooked.

What does this now mean for India and the rest of the world? Trump has actually been consistent on a few points of foreign policy, including well before his run for the presidency. He believes, for example, that US allies — including in Western Europe and East Asia — need to pay more to preserve a US military presence in their regions.  "It is time for us to end our vast deficits by making Japan and others who can afford it pay," he wrote as far back as 1987.

He has promised to defeat the Islamic State, but has also talked tough about China. "Despite all the happy talk in Washington, the Chinese leaders are not our friends," he wrote in 2011. "I’ve been criticised for calling them our enemy. But what else do you call the people who are destroying your children’s and grandchildren’s future?"

More recently, some of his foreign policy advisors have promised a stronger military presence in Asia but a drawdown in US trade with the region. There are questions about a Trump administration’s ability to see such policies through, given budgetary and bureaucratic constraints.

Much will also depend on who occupies the relevant positions in the US government in his administration. For India, there are naturally opportunities in Trump’s election. On the plus side, India would benefit from a possible thaw in relations between Washington and Moscow. A continued commitment to a US military presence in Asia would also be welcome. A strong US counter-terrorism policy, should it be tied to a crackdown on global networks, could also advance India’s objectives.

And the likely suspension of the recently concluded mega-trade agreement — the Trans-Pacific Partnership (TPP) — offers India breathing room on trade.

But there are also possible downsides. There is some concern that a Trump administration may become embroiled in a trade and currency war with China — a race to the bottom that will also severely affect India. As long as there is uncertainty, India will have to move quickly to further diversify its military partnerships in the region, including with Japan and Australia. A Trump administration may also be unwilling or unable to distinguish between low- and high-skilled immigration to the US, which may have important consequences for the Indian services sector.

Much has been made of Trump’s possible Pakistan policy, but on this front he has articulated mixed messages. He has said that he would keep aid to Pakistan steady, and that countries like India should pitch in (presumably to help stabilise Pakistan). Rather surprisingly, Afghanistan barely featured in the election campaign. On both countries, Trump’s policies will probably clarify further upon receiving intelligence briefings over the coming weeks, much as Barack Obama’s did when he first assumed office in 2008. Ultimately, India is perhaps the major country that will be least affected by a Trump presidency.

India is not economically or commercially dependent on the US, nor is it a military ally. However, India is certainly in a position to proactively shape the new administration’s policies. The Modi government had prudently reached out to members of Trump’s team over the course of the campaign during the past several months. India Inc will be keen to remind Washington of its contributions to the high-technology sector and the fact that Indian businesses actually create jobs in the US.

Similarly, the Indian government will be eager to remind a Trump administration about the common threat of transnational terrorism. Instability and uncertainty are never preferable in international affairs; but in every period of upheaval there are opportunities for progress. 

November 9, 2016

With Trump’s Victory, American Exceptionalism Came To An End

The following article originally appeared in BloombergQuint on November 9, 2016. 

Fifteen years ago, I came to the United States as an undergraduate student. A few weeks after my arrival, I watched the World Trade Center’s twin towers collapse live on television from my dormitory in Minnesota. Two years after that, stuck in a snowstorm in Colorado, I watched America plunge headfirst into a war in Iraq.

At the time, the U.S. and foreign media media gave the impression of a country riven by paranoia – a suspicious, xenophobic, and uneducated United States. The stereotype of the ugly American gained ground around the world. And certainly there were incidents – Guantanamo, Abu Ghraib, sporadic hate crimes – that seemed to justify such views.

But none of that characterised the America I experienced over many years in the 2000s. In small towns in Wisconsin and Iowa – in states that voted decisively for Donald Trump – I interacted with kind, industrious people, many of them genuinely curious about the world. These were people who learned foreign languages, who volunteered for the Peace Corps, who hosted overseas exchange students, or whose small businesses traded abroad. Many were proud of their immigrant heritage –German, Norwegian, Irish, Polish, and so forth. These were the kind of people who formed the bedrock of American civil society, modern analogues of those famously captured by the French visitor Alexis de Tocqueville 175 years ago.

A Not-So-Brave New World?
Over the subsequent years, America changed. And, at odds with larger narratives, it changed largely for the better. Despite a massive financial crisis in 2008, the economy recovered rather well. The United States remains at the forefront of the world’s cutting-edge industries. Its universities are still unrivalled. American society also became more tolerant. Despite the worst terrorist attack in its history, the United States remained open to immigration. The public appetite for blatant bigotry diminished. An African-American could, in fact, inhabit the White House. Homophobia, misogyny, and racism were no longer publicly excusable. And certainly, those who held such views were marginalised.

Or so we thought. It is impossible to capture all the ways in which the election of Donald Trump reverses these trends. But it would be wrong to lay all responsibility at Trump’s feet.
About 14 million voters were needed for him to win the Republican nomination. That could still be considered a fringe in a country of over 300 million. But almost 60 million people – one in five Americans – cast a ballot for him this week. That represents a clear public endorsement. It is also a firm repudiation of many things the United States has come to stand for over the last 71 years.

A Setback For America?
Forget for a moment that Trump is completely unpredictable in his statements, uncertain in his views, and unprepared on policy matters. Forget also that his personal credibility as a successful businessman and philanthropist does not survive basic scrutiny. Two big – indeed, yuge – concerns remain. Both strike at the heart of what has made America exceptional.

The first is Trump’s complete refutation of the broad and mostly bipartisan political consensus around capitalism, globalisation, and democratic internationalism. Each of these underlying principles of American policy should certainly be scrutinised and even criticised, and they have been. But equally, coherent and sound arguments could be found in their favour. Trump’s alternatives to this consensus are, however, dangerously simple. He has called for a trade war with China. He has threatened to abrogate U.S. alliances. He has promised to close the door to immigrants. And yet the details on every policy front remain hazy. That alone ought to concern markets and leaders, across the world and in the United States. You can’t Make America Great Again without a plan.

The second issue is equally concerning: Trump’s embrace or tolerance of blatant misogyny and racism. It is quite possible that a good many voters could not bring themselves to vote for Hillary Clinton because – horror of horrors – she was a woman (‘lack of personal appeal’ was, let’s face it, simply a poorly-disguised by-phrase). Many female voters, hoping that this would be their moment, are undoubtedly disappointed. But beyond that, we may now witness a period of true danger for American minorities – blacks, Latinos, even Asians. Some of Trump’s supporters – even if they remain a fringe – will certainly feel empowered, interpreting his mandate as a call for cultural revolution.

The very hate crimes that were once rare, episodic, and roundly condemned could now become frequent, widespread, and justified away. We can only hope that no Indians, neither non-resident Indian citizens nor Americans of Indian origin, find themselves at the receiving end.

Apologists may find ways to normalise Trump’s victory. His is an authentic voice of the people, they will argue. He will bring an end to many years of American adventurism and folly. But it will be hard to normalise a normal, unexceptional America. The world will be far worse for it.

Democracy has its critics. It can be slow and cumbersome, even in doing things that are unquestionably noble and beneficial. But it can also frustrate the worst impulses and worst ideas of a leader or electorate. American exceptionalism has faced the biggest setback of our lifetimes. But American institutions are too strong to ensure that that the end is irreversible.

'Bharat ke Samne Hoga Antarrashtriya Bhumika ka Mauka'

The following article originally appeared in Dainik Bhaskar on November 9, 2016.