Cover Story

Deals and doubts

Print edition : February 20, 2015

In the same orbit: Prime Minister Narendra Modi and U.S. President Barack Obama watching the air show during the 66th Republic Day parade at Rajpath in New Delhi on January 26. Photo: Manvender Vashist/PTI

Barack Obama and Michelle Obama on board Air Force One at Palam Air Force Station in Delhi on January 27. Photo: PRAKASH SINGH/AFP

Barack Obama and Michelle Obama with Prime Minister Narendra Modi on their arrival at Palam Air Force Station in New Delhi on January 25. Photo: S. Subramanium

Barack Obama inspecting the guard of honour with Wing Commander Pooja Thakur, Parade Commander, during the ceremonial reception at the Rashtrapati Bhavan in New Delhi on January 25. Photo: V. Sudershan

Barack Obama and Michelle Obama before the state dinner hosted by President Pranab Mukherjee, at Rashtrapati Bhavan on January 25. Photo: STEPHEN CROWLEY/NYT

Boeing's Apache AH-64 helicopter. Photo: AP

Boeing's CH-47 Chinook helicopter. Photo: AFP

Boeing's C-17 Globemaster III aircraft. Photo: R.V. Moorthy

Boeing's P-8I reconnaisance aircraft. India is expected to place an order for these and other high-tech equipment worth $8 billion in the next two years. Photo: PTI

Narendra Modi and Barack Obama at the India-U.S. Business Summit in New Delhi on January 26. Photo: SAUL LOEB/AFP

It is the U.S. military-industrial complex that has gained the most from President Barack Obama’s visit. India is closer to becoming a member of a quadrilateral military axis involving the U.S., and a number of deals have been inked that may make India dependent on U.S. military technology in the long run.

United States President Barack Obama seems to be a man in a hurry in his final two years in office. His critics, on the other hand, say that lame-duck Presidents usually spend their last two years in office visiting foreign climes. Though Obama’s visit to India from January 25 to 27 was big news here, it did not get as much traction back home in the U.S. The U.S. media were more focussed on the Indian Prime Minister’s sartorial tastes and his propensity to address key Western leaders by their first names. Narendra Modi tried to convert the Obama visit into an Indo-U.S. love fest. Before the U.S. President’s visit, the Indian government asked Indian private companies to cut imports of oil from Iran. Industry experts in Dubai said that India was bowing to U.S. pressure. “India does not want the Obama visit to be overshadowed by some dispute over (American) sanctions on Iran,” Robin Mills, an oil consultant based in Dubai, told Reuters. To sanitise the capital before the arrival of the U.S. President, the government deployed over 50,000 security personnel and installed an additional 15,000 CCTV cameras.

In the last months of the United Progressive Alliance (UPA) government, relations between Washington and New Delhi had become slightly frosty in the wake of the Devyani Khobragade incident. The U.S. Ambassador, Nancy Powell, had to leave New Delhi without completing her term. Besides the Devyani Khobragade incident, Nancy Powell’s initial reluctance to meet a politically ascendant Modi, who was denied a U.S. visa at the time, was a factor that could have hastened her exit from India after the Bharatiya Janata Party’s (BJP) victory in the Lok Sabha elections. Now, with both the Indian Prime Minister’s Office (PMO) and the Foreign Office deciding to put the Devyani Khobragade incident on the back burner and Washington wholeheartedly embracing Modi, relations are firmly back on track. Many pro-establishment commentators are even saying that if Modi and his close advisers have their way, India will soon end up as one of the closest allies of the U.S. in the region, junking time-tested foreign policy principles like non-alignment and strategic autonomy along the way.

Brajesh Mishra, National Security Adviser in the first National Democratic Alliance (NDA) government, had talked about a Washington-Tel Aviv-New Delhi axis emerging. Under Modi, a much wider axis extending all the way to Tokyo could become a reality. There are reports that the Indian side is even willing to partner the U.S. in counterterrorism in West Asia and Africa. America’s war on terrorism has led to much greater instability in India’s neighbourhood and many other parts of the world. It has led to the emergence of more potent terror groups like the Islamic State (I.S.). Countries which have joined the U.S. in the so-called “war on terror” have had to pay a heavy price.

The Indian Prime Minister broke with established protocol and went to the airport to receive the U.S. President. He promptly greeted Obama with a hug, like a long-lost friend. Many more “hugs” were exchanged between the two leaders before Obama left Delhi. When the Chinese and Russian Presidents were in New Delhi, they were received as per protocol. There was only a formal shaking of hands. The Indian Prime Minister has reserved his “hugging” so far only to two other leaders, the Prime Ministers of Japan and Australia, Shinzo Abe and Tony Abbot respectively. As T he N ew Y ork T imes reported, Modi’s action symbolised a “quadrilateral hug”.

India, the U.S., Japan and Australia conducted quadrilateral military exercises in the Indian Ocean in the last decade after signing up for a quadrilateral military dialogue in 2006. That dialogue process has since lapsed after a previous Australian government opted out of it. India, under the UPA government, was wary about the quadrilateral axis emerging against China in the region. But now, Abe is back and Australia has a hawkish Prime Minster in Abbot. It has been reported in the U.S. media that it was the Indian Prime Minster who was very keen during his talks with President Obama to revive the quadrilateral security network. Abe and Abbot have been urging more intense defence and security cooperation between the four countries since last year.

‘Town hall’ speech

Modi and Obama also jointly recorded a radio programme, “Mann ki Baat”, in which the Indian Prime Minister waxed eloquent about his friendship with Barack Obama. It was only on the last day of his visit that Obama addressed the question which has been worrying civil society in India and human rights groups internationally. In his carefully choreographed “town hall” speech, the U.S. President, in a none-too-subtle message to the Modi administration, said that it was important for the Indian government and people to ensure the sanctity of Section 25 of the Indian Constitution, which guarantees the freedom of religion. Obama warned against the dangers of dividing society on sectarian lines. “Every person has the right to practise his faith without any persecution, fear or discrimination. India will succeed so long as it is not splintered on religious lines,” Obama told his audience, comprising mainly young university students. The increasing number of atrocities and the rise of religious fundamentalism in the wake of the BJP coming to power have not gone unnoticed in the wider world.

One of the Obama administration’s major initiatives is the U.S. military’s “pivot to the East”. American policymakers have calculated that a rising China can only be effectively contained if major countries like India lend a helping hand to the project. It is no surprise that during talks in New Delhi with the Indian Prime Minister, the subject of more military cooperation between the two countries was one of the key issues that came up for discussion. The U.S. has been working overtime to ensure that India ends up as the southern anchor in its “pivot to Asia”.

The other important issue that the U.S. President had on his agenda was to persuade the Indian government to relax provisions relating to the “nuclear liability Bill” so that U.S. companies could start building civilian nuclear reactors in the country. Big U.S. companies like Westinghouse and General Electric had serious reservations about India’s “nuclear liability law” and have so far refused to go ahead with projects in India. President Obama’s decision to make a second visit to India and agree to be the chief guest at the Republic Day celebrations at short notice indicated that the Indian government had signalled that it would be giving concessions to the U.S. on some key issues that have been irritants in the bilateral relations between the two countries.

After talks with the Indian Prime Minister, Obama announced that a breakthrough had been achieved on the implementation of the nuclear deal and that the U.S. would be committed to its “full implementation”. The George W. Bush administration had lifted its moratorium on the sales of nuclear fuel and reactor components to India in 2006 after the nuclear deal was signed between the two countries. Both sides have not been forthcoming about the details of the current deal. In fact, there was no mention of the breakthrough figures in the joint statement released after the bilateral talks. The Indian side has not formally diluted the “nuclear liability law” as initially demanded by the big American companies. According to American officials, the Indian government will provide “extra security” to foreign companies involved in the construction of nuclear reactors. Under the nuclear liability law, foreign companies would have had to pay hefty compensation in case of accidents.

Indian officials have said that the government will help set up an insurance pool that will considerably minimise the compensation to be paid by American companies in case of an accident. According to reports, the secretive deal to override the “nuclear liability” clause involves Indian taxpayers and Indian insurance companies picking up the bulk of the tab in case of a nuclear accident. The Bhopal gas tragedy is still fresh in the minds of the Indian public. The Fukushima nuclear disaster two years ago has cost the Japanese government more than $20 billion. GE Hitachi, the American-Japanese company bidding for a contract in India, has signalled that it will only start work after the Indian government “is in compliance with the international Convention of Supplementary Compensation”, a global liability accord. In response to India diluting its stance on the nuclear liability issue, the U.S. government has given up its claim to exercise control in perpetuity over all nuclear equipment and parts supplied by U.S. companies. The Obama administration agreed with the Indian viewpoint that the International Atomic Energy Agency’s (IAEA) supervision would suffice.

As expected, the two countries agreed to renew their defence framework agreement for another 10 years. The two governments agreed to further step up cooperation between their militaries. The agreement will provide for more joint military exercises, with particular focus on naval exercises to enhance maritime security in the Asia-Pacific region. The maximum number of joint military exercises India holds annually is with the U.S. The two countries have laid out a vision document that spells out the contours of a new alliance.

“As leaders of the world’s two largest democracies that bridge the Asia-Pacific and the Indian Ocean region and reflecting our agreement that a closer partnership between the United States and India is indispensable to promoting peace, prosperity and stability in those regions, we have agreed on a Joint Strategic Vision for the region,” the joint statement said. The statement explicitly affirmed “the importance of safeguarding maritime security and ensuring freedom of navigation and over-flight throughout the region, especially the South China Sea”. The joint statement reflected the U.S.’ world view on most of the other contentious international issues, including Iran and North Korea. North Korea’s ballistic missile programme was criticised. The joint statement said that it was up to Iran to prove that its nuclear programme was “exclusively peaceful”.

The joint statement called on parties (read China) to “avoid the threat or use of force” and to pursue the “resolution of maritime disputes through peaceful means”. Reports in the U.S. media said that Obama and Modi spent a substantial amount of time discussing China during their talks. American officials were quoted as saying that with India now officially coming on board, the two countries can do much more “to restrain China’s ambitions and preserve the post-war order in the region”. As a quid pro quo for India’s open support for the U.S.’ rebalancing in East Asia, the Obama administration has, in the joint statement, announced support for India’s bid to join the Asia-Pacific Economic Forum. President Obama also assured India of the U.S.’ support in its bid to join the Nuclear Suppliers Group (NSG). Key members of the NSG remain opposed to India’s membership. All members of the 48-nation group are signatories to the nuclear Non-Proliferation Treaty (NPT).

The U.S. Deputy National Security Adviser, Ben Rhodes, told the American media in New Delhi that the Obama visit would send a message to the world that India and the U.S. were going to be “closer partners going forward” and that the new partnership was “consistent with the President’s focus on the India-Pacific region”. Both sides have indicated that the number of joint military exercises to be held annually will go up significantly. Under the Defence Trade and Technology Initiative (DTTI), the U.S. plans to sell to India “transformative technology” to co-produce military hardware like the Javelin anti-tank guided missiles and MH-60 helicopters. The man credited with creating the DTTI is Ashton Carter, who will soon be taking over as the U.S. Defence Secretary. In the coming two years, India has indicated that it wants to buy 22 Apache helicopters, 15 Chinook helicopters, four P-81 maritime patrol planes, six C-17 Globemaster III aircraft and other high-tech equipment. The combined price tag would exceed $8 billion. The long-term goal of the American arms manufacturers is to overtake Russia as the biggest weapons supplier to India.

The U.S. military-industrial complex will have sufficient reasons to be happy. Unlike the Russians, the Americans are reluctant to “make in India” and part with their advanced technology. Agreement has been reached only to co-produce relatively unsophisticated “Raven” drones, surveillance systems for Lockheed C-130 planes and jet engine technology. There are fears that under the DTTI signed in 2012, India will become increasingly dependent on American military technology. The Americans have indicated that meaningful transfer of technology will only happen if India signs the Logistics Support Agreement (LSA). The LSA will give the American military access to “lily pad” bases on Indian soil. The previous Indian government was of the view that the LSA would impinge adversely on India’s strategic autonomy. The Modi government does not seem to have any such inhibitions as it has signed on to America’s strategic designs in the Asia-Pacific region.

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