The big stick or carrots? Perhaps both. Media coverage about the visit on Tuesday of U.S. Secretary of State Mike Pompeo has veered from one extreme to the other and for good reason. Until fairly recently, Indian commentators were complaining about the ‘Nelson’s eye’ treatment President Trump was giving this country. Now it’s the turn of his other eye and the complaints are turning into a flood.
Trump has accused India, rather absurdly, of having a high trade surplus with the U.S. ($24 billion), he’s warned against farm subsidies and demanded that New Delhi roll back new rules on e-commerce such as “data localisation” (meaning servers should be based in India).
Then of course there’s Huawei, the Chinese tech firm banned from doing any business in the United States. As India prepares to roll out its 5G road map, Pompeo can be expected to renew his warnings against giving any space to Huawei.
In fact, when one looks at it, India’s problems with the U.S. are not very different from what Washington’s long standing (or long suffering) allies and partners are facing. The point is, this is a very different administration headed by a very different president and Pompeo’s brief is to make that understood down the line.
The hue and cry about Harley motorcycles or the loudly voiced complaints about India’s trade surplus are similar to accusations levelled by Trump all over the world. It’s a cover for a larger strategic design. At one level, it’s about redoing the world in a manner that suits America— which means the United Nations is a waste of time and the World Trade Organisation should be ended since making America great again no longer rests on free and open trade. The latter flows from the fact that America’s supremacy today rests on technology and innovation to the extent of about 80 per cent (the balance is some manufacturing and agriculture), which is being challenged by a resurgent China.
As China chips away at U.S. allies in Asia and Europe through Belt & Road and other schemes, and pushes its industry to take on the U.S. technologically, Uncle Sam has woken up to the unwelcome realisation that making America great again will be a tough no holds barred fight, and if you are not with him, you are against him!
This is the dilemma before India. It’s interesting to note that External Affairs Minister S Jaishankar had, in his first public event in Delhi recently, warned that sitting on the diplomatic fence may no longer be an option for India. Pompeo can be expected to reinforce that with some blunt speaking.
He may want India to take on a greater role in countering China in the Indo-Pacific. Jaishankar could tell him the obvious: unlike the U.S., India shares a land border with China and cannot afford overt hostility. Iran and Chabahar could be on the table, as also Afghanistan. There could be some fulminations about the S-400 ballistic missile defence system India is buying from Russia but Pompeo knows the U.S. has nothing comparable to offer. What he may want is a long term Indian commitment to buying American weapons and systems.
On the purely economic and trade issues, India needs to sit down for an extended dialogue with the Americans. This is a transactional presidency and if India gives some, there could be profit at the end of the day. Just to drive the point home, last year the U.S. was India’s largest trading partner ($142 billion in commerce) with the balance in India’s favour.