Transformation in India Opens Door for U.S. Partnerships: View

As Secretary of State Hillary Clinton arrives in New Delhi today, her first order of business is to assure U.S. support for the Indian government and people as they deal with the aftermath of last week’s terrorist in Mumbai.

She then should get to work on broader objectives: affirming India’s prominent role as an oasis of democratic values and economic growth in a troubled region and fulfilling the promise of a long-lasting U.S.-Indian partnership.

Americans have too often viewed relations with India solely through the prism of the chaos in neighboring Afghanistan and Pakistan. That approach is short-sighted. President Barack Obama has rightly predicted that U.S. relations with India “will be one of the defining partnerships of the 21st century.” Or, as Prime Minister Manmohan Singh of India put it, “the sky is the limit.” This is no hyperbole. If the two governments focus on building a strategic partnership, the benefits to South Asia and the wider world will be substantial.

Historic Transformation

India is engaged in an epic economic and political transformation. Singh’s free-market reforms have allowed his nation to shed its socialist and statist past. The world’s largest democracy is now one of the most dynamic economies.

The country’s foreign policy has evolved too. During the Cold War, India was a close ally of the Soviet Union and saw itself as a leader of the nonaligned movement. Now, its leaders see the world in much the same way as their U.S. and Western counterparts.

The U.S. partnership with India reflects shared values as much as common economic and military interests. Although its record is far from perfect, India’s democratic government has ensured both stability and openness for its 1.2 billion citizens. The nation now serves as a model for the kind of vibrant and tolerant multiethnic democracy that the U.S. hopes to foster in Pakistan and Afghanistan. In addition, India’s democracy and balanced economy are far more in line with Western values and interests than the alternative model offered by China.

Some Indians, mostly among the intellectual elites and lower-level government officials, don’t share Singh’s enthusiasm for close ties with the U.S. They see their country as the inheritor of a great civilization and fear becoming subservient to the U.S. Given these countervailing pressures on Singh’s government, there may be limits on the scope of India’s transformation that could also restrict the terms of an alliance with the U.S. But Washington shouldn’t be deterred by these internal deliberations.

Defensive Cooperation

Perhaps one of the most important benefits to the U.S. of a partnership with India would be to address a rising and more assertive China. New Delhi views China, not Pakistan, as its foremost long-term security threat. The Beijing government has at times been assertive in its claim to Indian territories along the countries’ partially unmarked border.

The Asian giants also compete for influence in the “string of pearls,” as the Chinese call countries such as Bangladesh and Sri Lanka that lie along Beijing’s sea route to Africa. Preventing Chinese expansionism and ensuring freedom of navigation in the Indian Ocean is another reason U.S. and Indian defensive cooperation should grow.

Also, if it can be convinced to do so, India can help build international support for initiatives that would otherwise be seen as made in America. For example, India could be of enormous help in isolating Iran. India is friendly with countries in Africa and Asia that are suspicious of U.S. and European motives on Iran and other issues. New Delhi’s diplomats can therefore help in ways that Washington’s traditional allies cannot.

Remarkable Restraint

Clinton should go out of her way to praise Singh’s commitment to reconciliation with Pakistan as well as the remarkable restraint he has shown in recent days. Rather than blaming the Islamabad government for the Mumbai bombings, New Delhi has said that it does not know who was responsible, and has urged the Indian news media not to speculate or point the finger at Pakistan.

As the U.S. looks for areas to expand its partnership with India, trade is a good place to start. Previously, the American strategy was to make no distinction between small issues such as opening India’s market for dairy products and much more important restrictions by New Delhi in the telecommunications and retail sectors. This made no sense. Washington should identify one or two trade priorities and push them hard. Another step is for the U.S. to push the Indians to finish negotiations on a Bilateral Investment Treaty by the end of 2012. Such an accord would provide a framework for resolving investment disputes and would build momentum for the two sides to begin negotiations on a free-trade agreement.

Clinton should also push Singh to finish implementation of the 2008 U.S.-India civilian nuclear deal, which was supposed to open the door for American companies to sell nuclear power plants to India. Since then, the Indian Parliament has adopted legislation that seems to make the suppliers, not the local utility, liable for damage from nuclear accidents. This is at odds with international practice and unacceptable to U.S. companies. The Indians need to find a way around this problem.

Working with Defense Secretary Leon Panetta, Clinton should seek ways to broaden military cooperation, especially as a deterrent to China. An Indian relationship with NATO would provide a mechanism for military officers from both countries to get to know each other.

The world’s two largest free-market democracies have much in common, despite a history of prickly relations. If those shared interests and values can be used as a platform, Singh’s “sky’s the limit” declaration may turn out to be prescient.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at