India, Russia Ally Against Pakistan by Providing Arms to Afghanistan

When NATO withdraws from Afghanistan later this year, India and Russia may well fill the security vacuum to prevent the Taliban from resurging, aligning them both against neighboring Pakistan.

India has reportedly agreed to pay Russia to deliver small arms, such as light artillery and mortars, to Afghanistan. The transfer could eventually include heavy artillery, tanks and possibly attack helicopters.

India’s foreign minister, Salman Khurshid, said during a visit to Afghanistan in February, “We are giving them helicopters and we will be supplying them very soon.”

A Foreign Ministry official told the Reuters news agency that India won’t commit troops on the ground nor give Afghanistan all the military equipment it has asked for — “for all sorts of reasons, including the lack of surplus stocks.”

“Involving a third party is the next best option,” the source said, referring to Russia. Indian officials apparently visited Moscow in February to firm up the deal. Read more “India, Russia Ally Against Pakistan by Providing Arms to Afghanistan”

Narendra Modi: The Man to Lead India into Growth

After a decade in power, India’s Congress party appears to have lost both the ability and the will to push through the reforms the country needs to grow and provide jobs for the millions of young Indians who are joining the labor market each year.

The only alternative in the elections that start on Monday is Narendra Modi, the conservative Bharatiya Janata Party’s prime ministerial candidate. Read more “Narendra Modi: The Man to Lead India into Growth”

Modi’s Star Rises as Party Defeats India’s Congress in State Elections

India’s conservative leader Narendra Modi appeared to have galvanized his party ahead of a national election next year with impressive gains in the states of Delhi and Rajasthan.

Modi’s Bharatiya Janata Party also held on to its majorities in Chhattisgarh in Madhya Pradesh in central India. Exit polls suggested the ruling Congress party had further lost ground in Mizoram in the northeast but to local parties.

The results were a blow to the party that has ruled India for much of its independence. Especially middle-class voters have grown restless since it last assumed power in 2004. Rising inflation, now at 7 percent, and a string of corruption scandals have undermined confidence in the coalition government it leads. Read more “Modi’s Star Rises as Party Defeats India’s Congress in State Elections”

India’s New Bank Governor Expected to Advocate Structural Reforms

Named as one of Bloomberg Markets’ fifty most influential people in its upcoming October issue, Raghuram Rajan has been much more than a mere professor of economics over the course of the past decade. One part public intellectual, one part policymaker and perhaps the most famous Cassandra of the global financial crisis, he is widely considered to be among the world’s preeminent thinkers on economic matters. Yet few would envy Rajan today as he steps into the middle of his country’s growing financial maelstrom as governor of the Reserve Bank of India,

While nearly all emerging markets have suffered from capital flight in anticipation of the American Federal Reserve’s return to tighter monetary policy — including the winding down of its quantitative easing program — India has been especially hard hit. Its economy is suffering from multiple woes: a rupee diminishing in value every week and mired in inflation, uncontrolled budget deficits and subsidy programs and the world’s second largest current account deficit. Read more “India’s New Bank Governor Expected to Advocate Structural Reforms”

Mountain Corps Raises Questions About India’s Strategy

India’s recent decision to raise a mountain strike corps along the border with China has raised arguments over the strategic orientation the country is supposed to have in years to come.

Although the operational details of the proposed mountain corps, which involves enhancing India’s third and fourth-generation warfare capabilities, are yet to be revealed, what’s clear is that the unit will contain up to 50,000 soldiers and be headquartered at Panagarh in West Bengal. This will mark a deviation from India’s existing continental offensive strategic orientation which is primarily focused on Pakistan. It will also mark a shift in orientation toward China from defensive to proactive. Read more “Mountain Corps Raises Questions About India’s Strategy”

India, United States Want to Quadruple Trade: Biden

American vice president Joe Biden gives a speech on board the USS Freedom in Singapore, July 27
American vice president Joe Biden gives a speech on board the USS Freedom in Singapore, July 27 (USN/Karolina A. Oseguera)

American vice president Joe Biden, the first to visit India in three decades, spoke of the two countries’ mutual desire to quadruple bilateral trade at a speech given in Delhi last week.

“Our bilateral trade has increased fivefold to $100 billion over the past thirteen years. We see tremendous opportunities (in India) and there is no reason that if our two countries make the right choices, trade cannot grow fivefold or more,” Biden said.

However, he acknowledged a lot needed to be done to remove trade barriers and that India needed to address its “inconsistent” tax system and barriers to market access. Read more “India, United States Want to Quadruple Trade: Biden”

Indo-American Relations Unlikely to Improve Before Afghan War’s End

Prime Minister Manmohan Singh of India participates in the East Asia Summit in Phnom Phen, Cambodia, November 20, 2012
Prime Minister Manmohan Singh of India participates in the East Asia Summit in Phnom Phen, Cambodia, November 20, 2012 (MEA)

India and the United States appear to share interests and values yet their relationship hasn’t much improved since Barack Obama became president in 2009. If anything, there is disappointment in both countries.

Obama’s Republican predecessor George W. Bush left relations with India vastly improved. Largely thanks to an historic agreement on nuclear technology cooperation, India seemed finally to have abandoned its traditional foreign policy of nonalignment in favor of stronger relations with the United States. The Americans, recognizing India’s potential as a balancer against a rising China, welcomed the move.

Seven years later, there have been precious few more breakthroughs. Regulatory impediments on both sides still hamper Indo-American commerce. While India is striking trade agreements with a range of other countries, American promises to lift technology sanctions — left over from the Cold War when India had a socialist government — haven’t been kept. The Americans seem more interested in the Trans Pacific Partnership which promises to liberalize trade across the Americas and Asia — excluding India.

The Americans have reason to be frustrated as well. Their companies still can’t do business in India’s nuclear energy sector due to strict liability laws. India also fought Obama on climate change and bought European fighter planes instead of Boeing’s or Lockheed’s. American officials can almost be forgiven for wondering whether the potential of the strategic partnership wasn’t oversold.

The two powers still have a shared interest in deterring Chinese aggression. India was reminded of this only recently when Chinese troops crossed the disputed Himalaya border between the two Asian countries and camped out for several weeks in territory that is claimed by India.

In Afghanistan, by contrast, America’s and India’s interests are increasingly divergent which might go some way toward understanding why there appears to be so little goodwill in the relationship. To India’s apprehension, the United States are seeking a political settlement to the conflict there, one that should include the very insurgents that threaten them both.

India cautioned against Taliban reconciliation as early as 2010, fearful that the movement’s resurgence would allow Pakistan to regain an influence in Afghanistan. Pakistan has since claimed credit for persuading the Islamists to consider talks, undoubtedly to the alarm of those in New Delhi.

Indians are only too familiar with their rival’s agenda in Afghanistan. Pakistan has been involved in numerous instances of domestic terrorism. Its intelligence service — which originally propped up the Taliban during the 1990s Afghan civil war, seeing it as the only viable movement among the country’s majority Pashtun population — was responsible for at least one of two attacks on India’s embassy in Kabul in 2008.

Where India backed the Northern Alliance in Afghanistan’s civil war, which was then made up mostly of ethnic Tajiks, it has supported the administration of Hamid Karzai since the Taliban was overthrown. His government may be corrupt and fall as soon as the Americans withdraw in 2014; at the very least, this support — which has included direct financial aid as well as infrastructure investments — thwarts Pakistani intentions.

Balancing against Pakistan in Afghanistan is a costly and time consuming endeavor, however, when India would like to focus on balancing against China. If only the Americans would keep Islamabad at bay, the Indians like to think, they can afford to be more assertive in East Asia. Instead, they have to spend dearly to prevent Pakistan from running Afghanistan again and maintain hundreds of thousands of soldiers at arms in case it invades or disintegrates and succumbs to civil war.

Meanwhile, China is buying access to natural resources, if not loyalty, across the Indian Ocean region and making strides into Central Asia as well. India’s diplomatic counteroffensive has been lackluster while America’s “pivot,” however clearly advertised, doesn’t seem to have significantly affected Chinese behavior.

Unlike the United States, India is locked in direct competition with China for minerals, oil and gas as well as security partners. It also has an unresolved border dispute with its bigger neighbor which happens to occasionally extend a helping hand to the Pakistanis whose economy seems to be slowly collapsing.

For these reasons, India cannot have the sort of great power relationship America seeks with China. America, on the other hand, can ill afford to pick sides. Which is why it can’t have India as an ally — at least not while it is endangering Indian security in Afghanistan.

India’s Conservative Leader Modi Outmaneuvers Rival

After a disastrous election defeat and a stint as absentee leader of the opposition, Lal Krishna Advani finally resigned from India’s opposition conservative party on Monday at the culmination of its national conference held in Goa. That conference was meant to sew up the final minutiae of the Bharatiya Janata Party’s electoral strategy for next year’s general election. The Indian press labeled the resignation as some kind of major churning being set in motion.

Ostensibly this churn is a result of the meteoric rise of Narendra Modi, the supposedly divisive chief minister of Gujarat state. Advani, as the story goes, believed Modi’s divisiveness to be detrimental to the party’s electoral prospects. The reality is that Advani, like most Indian politicians, used identity politics to further his own career. This had little to do with inclusiveness and everything to do with an internal power struggle. Read more “India’s Conservative Leader Modi Outmaneuvers Rival”

China, India Vie for Myanmar’s Energy Resources

The competitive relationship between China and India has become a defining feature of the strategic environment across emerging Asia. While both nations are currently not in direct conflict, there are several areas that hold strategic interest which could potentially act as the stage for a clash between the two nations. Their current rivalry in Myanmar is one such area.

It is China and India’s incessant need for alternative sources of energy that is the main focal point of their rivalry within Myanmar. As China and India are increasingly forced to rely on the global oil market to meet their energy demands, they are more susceptible to supply disruptions and price fluctuations. Rapid growth rates in both countries have grown in tandem with increased demand for energy. By 2020, it is estimated that China and India combined will account for roughly one third of the world’s gross domestic product and, as such, will require vast amounts of energy to fuel their economies. Read more “China, India Vie for Myanmar’s Energy Resources”