With Xi Jinping, Narendra Modi and Vladimir Putin displaying increasing bonhomie, the US has cause to reflect on its trade disputes with its ally New Delhi. Traditionally, America’s backing of India as a counterweight to China has been mutually advantageous. But for India, the equation may be changing. Kunal Purohit specially for the South China Morning Post.
The scene in Kyrgyzstan must have been quite an eye-opener for Washington.
Sharing a table at the Shanghai Cooperation Organisation summit in the landlocked nation this month were the leaders of various countries to have come into the crosshairs of US foreign policy recently: Iranian President Hassan Rowhani, Russian President Vladimir Putin, Chinese President Xi Jinping. The next day, Indian Prime Minister Narendra Modi and Xi were huddled in a bilateral meeting – the first of three planned gatherings between the pair over the next six months.
The response from Washington was swift. A day later, US Secretary of State Mike Pompeo invoked Modi’s campaign slogan, Modi hai toh Mumkin Hai (“Modi makes it possible”) in trying to inject hope into the troubled India-US relationship, after fears of turbulence over trade tensions.
On Wednesday this week, Pompeo was in India on a day-long visit, trying to soothe nerves left frayed by recent tensions over a host of issues, including India’s imports of Iranian crude oil, its acquisition of S-400 missile systems from Russia and US tariffs.
Observers say the timing is no coincidence.
Ahead of a meeting between Modi and US President Donald Trump in Osaka on the sidelines of the Group of 20 (G20) summit, both sides are working to ensure escalating bilateral tensions do not do permanent damage. That aim wasn’t helped by Trump, who just as Pompeo was wrapping up his India trip, tweeted that India’s retaliatory tariffs were “unacceptable” and said they “must be withdrawn”.
Even so, many analysts believe the two countries will be seeking to use the G20 meeting to smooth out their differences. These efforts are likely to be driven by what else is likely to happen on the sidelines of the G20 – a Russia-India-China trilateral summit that comes amid increasing bonhomie between the leaders of the three countries, fresh from their meeting in Kyrgyzstan.
Analysts believe the US will not want to overplay its differences with India, a strategic ally, at a time when two of its principal rivals are stepping up their engagement with it.
For the Indian establishment, Trump’s tweet notwithstanding, Pompeo’s visit could be reassuring. Over the past year, the India-US relationship has faced a bumpy ride.
Last year, in March, the US imposed tariffs on the import of Indian aluminium and steel products. Last month, the US announced it was withdrawing the preferential trade status that it had granted India, among a host of other developing countries, under its “Generalised System of Preferences” programme. Under this programme, duties are waived on the import of products from beneficiary countries. The timing of the decision raised eyebrows – it came on the same day Modi and his council of ministers were sworn in, having secured a bigger mandate in the country’s general elections. Soon after, India announced retaliatory tariffs on 29 US imports.
A senior functionary of Modi’s Bharatiya Janata Party (BJP) who plays a part in articulating the party’s foreign policy stances, points to Washington’s May 2 deadline for India to stop its oil imports from Iran, failing which India would have faced sanctions. The Indian government had asked for an extension. “But the US did not budge and failed to consider that India was in the middle of its general elections. This reflects poorly on the sensitivity that Washington attaches to India’s concerns,” said the functionary.
Days later, the US Commerce Secretary Wilbur Ross warned India against imposing retaliatory tariffs in response to the US move to withdraw India’s preferential trading status.
Some policy watchers believe that India must take heart in the fact that the trade turbulence with the US isn’t unique to India.
“President Trump has been saying since 2016 that he is going to prioritise American interests and has imposed new norms. India is not alone. Many other countries are facing a similar situation with the US on issues of trade, especially,” said C Uday Bhaskar, the director of the Society for Policy Studies, a New Delhi-based independent think tank focusing on public policy and international relations.
Bhaskar believes that the American establishment under Trump has articulated, repeatedly, its sentiment that America has been taken for a ride by many countries, including India. Trump himself repeated this claim while talking to reporters at the White House just before taking off for Osaka.
SPECTRE OF CHINA
Many, though, are convinced that America’s emphasis on consolidating its relationship with India, the recent hiccups aside, is part of a continuing post-cold war emphasis on trying to contain China’s ascent.
Anil Wadhwa, former Indian Ambassador to Italy and a retired secretary in the Ministry of External Affairs, said the China factor loomed large over growing India-US ties. “There is no doubt about this. It is very clear that the threat of China is the reason why there is such a major thrust in the priority given to India by the United States,” said Wadhwa.
Bhaskar agreed. “For the US, having a discordant relationship with both China and India would be strategically imprudent. But, the degree to which the US and India are actually going to arrive at a modus vivendi and stabilise the bilateral [relationship] is unclear.”
Traditionally, such an approach – of the US backing India as a counterweight to China – worked for New Delhi as well, with its own historical distrust of China, a decades-old border dispute and the baggage from the 1962 conflict with China over competing territorial claims. For years, frosty China-India ties have acted as an impetus for India and the US to shed their own historical baggage and improve relations.
PUSHING THEM CLOSER?
This might now be changing in the Trump era. While the US and India continue to call each other strategic partners – Pompeo called India a “great friend” during his India visit – there is a growing feeling in the Indian establishment that Indian interests might not be well-protected under Trump, say experts.
This fear is forcing India to build better ties with China, especially on the trade and economic front. “There has been an expectation in New Delhi that the US would be lenient towards it on issues like trade, the import of crude oil from Tehran and on its acquisition of the Russian S-400 missiles. However, these hopes have been dashed multiple times,” said a New Delhi-based China watcher, not wishing to be named.
The China watcher believes that it is this realisation that is driving India’s outreach to China. “India is now safeguarding its interests by embracing closer ties with China. What is crucial to underline is that India’s ties with China are purely economic, not geopolitical in nature,” the New Delhi-based China expert adds.
Modi hinted at India’s concerns over protectionist policies under Trump when he hit out at unilateralism and trade protectionism, without naming the US, after having what he termed an “extremely fruitful” bilateral meeting with Xi, who was in the audience during this speech at the SCO summit this month.
According to the BJP functionary, the Modi government is trying to balance its leaning towards both China and the US. “We don’t want to antagonise China at a time when the US policy towards us is so unpredictable. Hence, for now, the government is keen on trying to optimise its gains from its relationships with both countries.”
The surest sign of this emerged on Wednesday. The US and India’s divergent views on the Indo-Pacific came to the fore. Jaishankar, underlining India’s intent at not wanting to be seen as adversarial by China on the issue, said that for India, the Indo-Pacific was not “against somebody”.
“I made the point that Indo-Pacific is for something, not against somebody and that something is peace, security, stability, and prosperity. We are looking at a landscape where a number of independent players work together for what they believe to be the global good,” he said, in the press conference.
For now, with both Modi and Trump fashioning themselves as strong leaders, there is unlikely to be a major climbdown by either of them when they meet in Osaka. “Both leaders are very conscious of their public images and both are strong leaders who do not want to be seen as giving in to the other.
Policymakers in the US have to decide whether it is strategically prudent for the US to take on both China and India at the same time,” said Bhaskar.