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India, the ‘New Asia’ and the American presidential elections

Obama met with Prime Minister Manmohan Singh in November 2009 in what was seen as a further sign of a strong emerging relationship between the two countries. EPA/Shawn Thew

Any American presidential election reverberates around global policy corners but, for India, the 2012 contest carries unusual significance.

With its economy slowing, national government under severe pressure, and competition with China over “new Asian power” status sharpening, India has a strong stake in the November result.

Superficially, India could be contented. A late 2011 Congressional Research Service report shows two-way trade totalling approximately $US50 billion.

The US is India’s largest direct investment partner at over $16 billion, and one of its largest trading partners. As India’s economic growth flourished, American interest and investment soared. The highpoint was America’s 2008-9 agreement on nuclear development and trade – as for Australia a few years later, that was the cost of doing business with India.

The US-India Strategic Dialogue, emerging from this interaction, has essayed further wide-ranging collaboration, especially in the “knowledge economy” – the development of stronger higher education partnerships, for example, carries significant implications for Australia with the US drawing over $3 billion from Indian international students.

Considered more closely, though, doubts surround the robustness of the India-US relationship. There was policy drift in the early Obama period, even if the President seemed positive. Many New Delhi authorities were puzzled, even alarmed by the apparent lack of direction. The Dialogue series restored some confidence, with Indian parliamentarian and poster-boy commentator Shashi Tharoor suggesting “relations are more or less on the right track”.

Barack Obama holds a reception in honor of Foreign Minister S.M. Krishna of India in June 2010. EPA/Ron Sachs

This despite ongoing concerns in Washington about India’s allegedly slow progress on matters like intellectual property protection, continuing corruption concerns, and differing views about relations with Iran. For India’s part, the US farm subsidy program gives American farmers undue trade advantages, the visa program restricts the free flow of Indian skilled labour, and moves towards a free trade agreement are too slow.

The presidential elections raise serious questions about what happens next, especially as Mitt Romney’s foreign policy forays have been so underwhelming. His position on India, its role and its region are under-elaborated, at best, even if his representatives agree the country is “important”.

Those foreign policy calls from any future president will have great significance for India in at least four key areas.

First, what happens in Afghanistan carries enormous weight in India, with Obama’s commitment to a withdrawal having already caused anxiety. Romney did not mention the war in his speech to the Republican convention, but has also committed to a late-2014 withdrawal. This is significant and uncomfortable, particularly as there are now suggestions that the troubled and troubling Afghan President Hamid Karzai will also step down that year. The question for India, obviously, is “what happens then?” India has a long-standing strategic interest in Afghanistan, and desperately wants Pakistan excluded from any resolution process there.

Pakistan is the second and directly connected challenge. Feasibly, Pakistan is now more of a problem for the US than is Afghanistan. The American administration’s relations with Pakistan have never been easy, and Osama bin Laden’s execution did not help. Nor have Obama’s attempts to “cool” on Pakistan in favour of its long standing neighbour and enemy. The “war against terror” is firmly based on dealing with what happens in Pakistan, the withdrawal from Afghanistan complicates that, and bothers India. Having faced its own terrorist outrages, most notably in Mumbai, India will be watching the candidates’ declarations on Pakistan, and by definition “the war on terror” most keenly.

That also applies to the third key factor, China. At the global, diplomatic level this might even be the most significant marker as India pursues a permanent UN Security Council seat, publicly supported by Obama. These rising “new powers in Asia” watch each other intently, and for signs of where the US is inclined between them. Neither Obama nor Romney has been definitive, but India considers the dialogue to suggest that the present administration, at least, takes India seriously.

Mitt Romney on the campaign trail in Florida: so far his position on India has been described as under-elaborated. EPA/Brian Blanco

The Indian Ocean is part of that, and the fourth key lever with further significance for Australia. India’s “Look East” policy presumes an increasingly dominant Indian Ocean and beyond role. As the Obama “pivot” policy evolves, this gives opportunity for further tension between India and China, with loop back into the China question and even the Russian one where India, again, has history. As with other foreign policy issues, Romney’s position is less well publicly delineated, causing further anxiety in New Delhi.

The present situation, then, has the current US attitude towards India substantially positive, with India well placed to capitalise despite some uncertainties. However, that might well be altered in 2014 when India faces a general election. The Manmohan Singh-led United Progressive Alliance (UPA) government seems unlikely to survive. That would elevate the Bharatiya Janata Party (BJP) whose website argues for foreign policy “driven by a nationalist agenda”, and all policies framed against “cultural nationalism.” The party now carefully distances itself from Hindu extremism, but Washington would be dealing with a very different India should the government there change.

For India now, it seems that the erratic present might be preferable to an erratic future.

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