My name is Lisa Curtis. I am Senior Research Fellow on South Asia in the Asian Studies Center at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.
The Bharatiya Janata Party’s (BJP) landslide victory in India’s recent parliamentary elections bodes well for the country’s future economic prospects, as well as for its role in global affairs, including relations with the U.S. Having won 282 parliamentary seats, the BJP surprised even its own party members by becoming the first Indian party in 30 years to win a majority of seats on its own. This means that the BJP will not have to rely on coalition partners to remain in power, being, instead, in a relatively strong position to implement policies, including economic reforms and other measures that could help restore investor confidence and improve India’s GDP growth rate.
The new government led by Prime Minister Narendra Modi is expected to pursue a more robust foreign policy than its Congress Party predecessor, and to enhance India’s influence and prestige on the global stage. While a more assertive approach to foreign policy than was pursued under the second Manmohan Singh government could pose some challenges to U.S. policymakers, it also will open opportunities for the U.S. to draw closer to India. New Delhi and Washington share similar strategic objectives, whether they involve countering terrorism, maintaining open and free seaways, or hedging against China’s rise.
Opportunity to Reinvigorate U.S.–Indian Relationship
The election of the BJP is welcome news for the beleaguered Indian economy. Prime Minister Modi was voted into power on promises to revive Indian economic growth, rein in corruption, and create jobs for the rapidly growing youth population. India’s GDP growth rate has recently dipped below 5 percent, down from around 8 percent two years ago.
Foreign investors have been optimistic that Modi’s election would help turn the economy around. Modi’s track record of making Gujarat one of India’s most investor friendly states when he served as its chief minister has sparked confidence that Modi will prioritize reviving the economy and encouraging private-sector growth. Some of this optimism was tempered following the introduction of the Indian budget last week, however. The budget, presented to the parliament by Finance Minister Arun Jaitley on July 10, did not go as far in opening up the economy, adjusting fiscal imbalances, and cutting subsidies as international investors had expected, and markets reacted tepidly to the budget announcement.
One of the main reasons why the U.S.–India relationship has foundered over the last few years, is that the previous Singh government was unwilling to enact necessary economic reforms. The Singh government also had been weakened by a series of corruption scandals and was distracted from building ties with the U.S. by domestic governance challenges during most of its second term.
Indo–U.S. ties were further strained in December 2013 when the U.S. arrested Indian diplomat Devyani Khobragade for underpaying her Indian maid while serving at the Indian consulate in New York. The details of Khobragade’s arrest, particularly reports that she was handcuffed in front of her children’s school and strip-searched while in detention, infuriated the Indian public. Washington, for its part, was taken aback by the fierce Indian reaction, which included withdrawing diplomatic privileges for U.S. diplomats and removing security barriers at the U.S. embassy in New Delhi.
The BJP’s assumption of power offers an opportunity to move beyond the Khobragade episode and revive ties by focusing on building cooperation on defense, security, economic and trade, counterterrorism, and other issues of mutual concern. The previous BJP-led government (1998–2004) was instrumental in elevating ties between Washington and New Delhi and in laying a solid foundation for a strategic partnership.
Robust Foreign Policy
The new Modi government is expected to pursue a more robust foreign policy than its Congress Party predecessor, and to enhance India’s influence and prestige on the global stage. The BJP election manifesto states that the BJP “believes a resurgent India must get its rightful place in the comity of nations and international institutions. The vision is to fundamentally reboot and reorient the foreign policy goals...so that it leads to an economically stronger India, and its voice is heard in the international fora.” A greater Indian willingness to acknowledge external threats and take initiatives to mitigate those threats could result in increased U.S.–Indian cooperation on a variety of defense, security, nuclear, and maritime issues.
China. The new BJP government is likely to adopt a multifaceted policy toward China, entailing both greater economic engagement with Beijing and a willingness to stand up to any perceived Chinese aggression along disputed borders. At the same time, India will focus on building up its military and strategic capabilities in an effort to keep pace with Chinese military modernization.
Sino–Indian trade dipped slightly in 2013 to $66 billion (from $74 billion in 2012), but China remains India’s biggest trading partner. While the BJP is likely to pursue closer economic ties with China, in February, Modi called on China to “abandon its expansionist attitude.” A major event that will shape the new government’s policymaking toward Beijing is the April 2013 border incident in which Chinese troops camped for three weeks several miles inside Indian territory in the Ladakh region of the state of Jammu and Kashmir. The incursion—probably the most serious by the Chinese in over two decades—has convinced Indian strategists that it must increasingly factor the potential threat of conflict over its disputed borders with China into its security planning and projections.
Signs of India’s and China’s deep-seated border disagreements have been surfacing over the last several years, and it is likely that such friction will continue, given the unsettled borders, China’s interest in consolidating its hold on Tibet, and India’s expanding influence in Asia. In recent years, China has increasingly pressured India over the disputed borders by questioning Indian sovereignty over Arunachal Pradesh; stepping up probing operations along different parts of the shared frontier; and building up its military infrastructure, as well as expanding its network of road, rail, and air links, in the border areas. India accuses China of illegally occupying more than 14,000 square miles of its territory on its northern border in Kashmir, while China lays claim to more than 34,000 square miles of India’s northeastern state of Arunachal Pradesh. India is a long-term host to the Dalai Lama and about 100,000 Tibetan refugees, although the Indian government forbids them from participating in any political activity.
The BJP manifesto does not mention China specifically, but it commits to a “special emphasis on massive infrastructure development, especially along the Line of Actual Control [the disputed border between India and China] in Arunachal Pradesh and Sikkim.” Developing the areas along the disputed border allows India to strengthen its territorial claims and defend itself against any potential Chinese aggression.
The Modi government has welcomed Chinese overtures, such as the early visit by Chinese Foreign Minister Wang Yi to New Delhi just three weeks after Modi assumed office, and a bilateral meeting between Modi and Chinese President Xi Jinping on Monday on the fringes of the Brazil, Russia, India, China, and South Africa (BRICS) summit in Brazil. It is unclear why Modi postponed a trip to Tokyo scheduled for early July, but the optics of Modi engaging two senior Chinese leaders before holding any meetings with Japanese officials demonstrates New Delhi’s interest in building positive momentum with Beijing.
The BJP leadership likely wants to avoid any early controversies in the India–China relationship like it experienced during its previous tenure when the BJP-led government cited the “Chinese threat” as justification for its nuclear tests in May 1998. One year later, however, New Delhi was pleasantly surprised by Beijing’s neutral position on the Indo–Pakistani Kargil crisis, a position that helped spur a thaw in Sino–Indian relations. Then-Prime Minister Atal Bihari Vajpayee made a historic visit to Beijing in July 2003, during which each side appointed a “special representative” to upgrade and regularize their border discussions.
Japan. In the past few years, India has focused increasingly on buttressing security ties with Japan, South Korea, and Vietnam to meet the challenges of a rapidly rising China. Indo–Japanese ties, in particular, are expected to get a major boost under Modi’s administration since Modi and Japanese Prime Minister Shinzo Abe are both increasingly concerned about China and appear prepared to take new policy directions to deal with the challenges posed by Beijing’s rapid military and economic ascendance. They have also developed a close personal rapport. As chief minister, Modi traveled to Japan in 2007, marking the first time an Indian chief minister had travelled to the country. Modi was one of the first foreign dignitaries to congratulate Abe when he was re-elected in 2012. The recent postponement of Modi’s visit to Japan is all the more perplexing, given the history of the personal relationship between Abe and Modi.
For his part, Abe has been a longtime supporter of stronger ties between India and Japan, and initiated the idea of the Quad (the U.S.–Australia–Japan–India security grouping) during his previous tenure in 2006. Abe was also one of the first leaders to acknowledge that the Pacific and Indian Oceans should be linked strategically on the basis of the need to preserve free and open seaways, thus helping to coin the term “Indo–Pacific.”
While their economic ties pale in comparison to those between China and India, Indo–Japanese diplomatic engagement has intensified in recent years. Japanese Emperor Akihito paid a rare visit to New Delhi in late 2013. Indian Prime Minister Singh made a historic four-day visit to Tokyo in May 2013, in which the two sides signed a joint statement pledging nuclear cooperation and expanded joint naval exercises. Japan also endorsed India for membership in the multilateral export control regimes, signaling Tokyo’s acceptance of India’s nuclear status.
Russia. India and Russia are likely to maintain their historically close partnership under the new Indian government. Russia remains India’s top defense supplier, providing about 70 percent of India’s defense requirements. The uncertainty surrounding the withdrawal of U.S. and NATO forces from Afghanistan has brought New Delhi and Moscow even closer in their shared goal to prevent a Pakistan-supported Taliban from regaining power in Kabul.
Differences in policies toward Russia could become a major irritant in India–U.S. relations, particularly if Russian President Vladimir Putin further extends Russian claims on Ukraine, and New Delhi continues to provide unqualified support for Putin. India tacitly supported President Putin’s annexation of the Crimea on March 18, 2014, by acknowledging Russia’s “legitimate interests” there and deciding not to back U.S. and EU sanctions against Russia.
Pakistan. Modi has demonstrated interest in setting a positive tone in relations with Islamabad by inviting Pakistani Prime Minister Nawaz Sharif to his swearing-in ceremony, an unprecedented move by an Indian leader. Still, a major terrorist attack in India with links to Pakistan could quickly reverse the current positive trajectory in Indo–Pakistani relations. Former Prime Minister Singh had shown a great deal of forbearance toward Pakistan, and a personal commitment to maintaining peaceful ties with Islamabad, even following attacks in India that were traced back to Pakistan-based groups. Having criticized Singh for being too soft on Pakistan, Modi would be under pressure to react strongly in the face of a terrorist provocation.
Moreover, there is growing concern about the impact on Indo–Pakistani relations of the international troop drawdown in Afghanistan and whether the Kashmir conflict could reignite. According to Indian officials, there was an increase in militant infiltration from Pakistani territory into Indian-held Kashmir in 2013. Last August, Indo–Pakistani military tensions escalated for a brief period when a series of incidents along the Line of Control (LoC) that divides Kashmir led to the killing of five Indian soldiers and a Pakistani civilian. The incidents led to charged rhetoric on both sides and dashed hopes for a potential meeting of the Indian and Pakistani leaders on the fringes of the 2013 UN General Assembly.
Modi is attempting to strike a balance between sounding a tough message on terrorism, while leaving the door open for improved Indo–Pakistani economic relations. In an interview with The Times of India in early May, Modi said that both countries faced the common enemy of widespread poverty and that he would be ready to “write a new chapter” in relations if Pakistan demonstrates that it is committed to stopping terrorist attacks from being launched from its territory.
When Indo–Pakistani tensions have escalated in the past, such as during the 2001–2002 military stand-off and in the aftermath of the 2008 Mumbai attacks, the U.S. played a key behind-the-scenes role in walking both countries back from the brink of conflict. But the U.S. inability to convince Pakistan to cut support to anti-Indian militants over the last several years may lead the new Indian government to conclude that it cannot rely on the U.S. to help de-escalate a potential future crisis with Islamabad, and instead must address the threat from Pakistan on its own.
Defense Trade and Cooperation
The U.S. should continue to position itself to help India fulfill its defense modernization requirements and enable American companies to pursue partnerships that support India’s interest in developing its domestic defense production sector. The BJP’s election manifesto highlighted the need to modernize India’s armed forces and increase research and development in the defense sector, with the goal of developing indigenous defense technologies and “fast-tracking” defense purchases. The budget that was released in India last week raised total defense spending by 12 percent to $38 billion for the Indian fiscal year ending in March 2015.  It also raised foreign direct investment caps in the defense sector to 49 percent, up from the current limit of 26 percent, but still short of what many defense investors had expected. India’s Department of Industrial Policy and Promotion (DIPP) had recommended in May that the government make more drastic changes with regard to FDI in the defense sector. The DIPP proposed allowing 49 percent FDI in defense projects where no technology transfer was involved; 74 percent in cases of technology transfer; and 100 percent for manufacturing state-of-the-art equipment.
The U.S.–India Defense Trade and Technology Initiative (DTTI), launched in 2012, is aimed at breaking down barriers between the two countries’ defense bureaucracies and enhancing defense trade and technology exchange. India is expected to spend over $100 billion on defense equipment over the next eight years. In 2013, U.S. military exports to India totaled $1.9 billion with delivery of C-17 heavy transport aircraft and P-81 long-range maritime reconnaissance and anti-submarine warfare planes. The U.S. has signed over $13 billion in total defense contracts with India over the past several years, but still lags behind Russia as a defense supplier to India.
Maritime Issues. India has the world’s fifth-largest Navy and Asia’s only operational aircraft carrier. In its manifesto, the BJP made special mention of the need to refurbish India’s navy. A series of mishaps on Indian submarines and ships over the past year have raised questions about India’s ability to achieve its naval ambitions. The most serious problems have occurred with its Russian Kilo-class submarines. There was an explosion on the INS (Indian Naval Submarine) Sindhurakshak in August 2013 that killed 18 officers and sailors, and a fire on the INS Sindhuratna in February, which led to the resignation of the naval chief.
Nuclear Issues. The previous BJP-led government, under Atal Bihari Vajpayee, surprised the world and invoked sanctions when it tested nuclear weapons shortly after assuming office in May 1998. The bold action says something about the BJP’s willingness to assert India’s national security interests, but the decision must also be viewed in context. Former Congress Party Prime Minister Narasima Rao was close to conducting nuclear tests in 1995, until the U.S. government pre-empted the test by delivering a demarche to the Rao government based on intelligence it had collected on Indian test preparations. The 1998 decision to test also was related to negotiations surrounding the Comprehensive Test Ban Treaty (CTBT) and India’s interest in ensuring that it tested its nuclear weapons before the CTBT came into force.
Potential Stumbling Block: Communal Agenda
When U.S. President Barack Obama called Prime Minister Modi shortly after the election results were announced to congratulate him on his victory and to invite him to Washington, he sent a signal that the U.S. is ready to do business with Modi and move beyond the issue of the 2002 Gujarat riots.
The U.S. had revoked Modi’s tourist visa in 2005 under the terms of its International Religious Freedom Act for failing to halt Hindu–Muslim riots in 2002 that killed more than 1,000 people—mainly Muslims—over the course of three days in the state of Gujarat. The riots followed an incident in which a group of Muslims set fire to a train carrying Hindu pilgrims destined for Ahmedabad and passing through the town of Godhra. Modi, who was Gujarat’s chief minister at the time, allowed funeral processions in the streets of Ahmedabad the next day, and the state government failed to control Hindu mobs that went on a systematic rampage murdering Muslims. Modi was accused of turning a blind eye to the violence, or worse, although the Indian courts have cleared him of criminal activity.
U.S. officials should give Modi a chance to prove he will not be a divisive leader and will work instead to improve the Indian economy for everyone’s benefit. Modi stayed away from communal politics during the election campaign and focused instead on the economy and good governance. In his first speech to the Indian parliament on June 11, he acknowledged that India’s Muslims lagged behind the rest of the nation in socio-economic terms and noted the importance of addressing this challenge, saying: “If one organ of the body remains weak, the body cannot be termed as healthy… We are committed to this… We don’t see it as appeasement.”
In the past, the BJP has supported policy positions considered divisive by the Muslim minority community. These include support for the construction of a Hindu temple at Ayodhya, where a mosque was destroyed by Hindus in 1992; the establishment of a uniform civil code, rather than allowing Muslims to maintain certain personal laws based on religious custom; and repeal of Article 370 of the Indian constitution, which provides the state of Jammu and Kashmir special autonomous status. The BJP did not pursue these controversial issues when it held power previously (1998–2004), mainly because it lacked support from its coalition partners. Even though the BJP now holds a majority on its own, Modi will have to consider the costs of prioritizing a hindutva (Hindu religious and cultural nationalism) agenda in terms of political support at home and abroad, and the possibility that doing so could undermine his goals of building a strong and prosperous India with a positive global image.
Christians, numbering about 25 million in India, have also faced harassment and violent attacks by organizations following a hindutva agenda. Christians feel especially vulnerable in states that have adopted anti-conversion laws. The anti-conversion laws are aimed at preventing “forced conversion” but have been misused by Hindu zealots to harass Christians and to legitimize mob violence.
It remains to be seen to what degree the BJP might focus on trying to rebuild the Ram Temple. Hindus would like access to Ayodhya, as they believe it to be the birthplace of the Hindu god Rama, where a prominent Hindu temple (the Ram Temple) once existed. In 1992, BJP leader L. K. Advani led a protest march to the Babri mosque at Ayodhya that resulted in its destruction by Hindu zealots and ensuing communal riots that killed nearly 2,000. In September 2010, a high court in India ruled that the land at Ayodhya be divided into three segments: one-third for the reconstruction of the Ram Temple; one-third for the Islamic Sunni Waqf Board; and one-third for another Hindu group. The 2014 BJP manifesto expresses support for rebuilding the Ram Temple within the confines of the Indian constitution.
U.S. Policy Recommendations
The rise to power of the BJP, led by now-Prime Minister Modi, creates an opportunity to end the malaise that has taken over India–U.S. relations in the last few years. Modi’s upcoming visit to Washington on September 30 is an opportunity for the U.S. Administration to demonstrate its commitment to moving relations forward with the new government. U.S. policymakers should consider initiatives in the following areas:
The Asia–Pacific. While Indian strategists assess Pakistan as posing the most immediate threat to India, they increasingly view China as the more important long-term strategic threat. Indian officials were initially cautious in their response to the U.S. policy of rebalancing toward the Asia–Pacific, but the Chinese border provocation in April 2013 may prompt New Delhi to become more open to the idea of a robust U.S. role in the region. A BJP government also will not be constrained or influenced by leftist-leaning politicians who have a knee-jerk aversion to strategic cooperation with the U.S., as was the case with the Congress Party–led government. BJP leaders will continue to resist any policy construed as “containment” of China, however. Modi’s strong equation with Japanese Prime Minister Abe also could open opportunities for greater trilateral cooperation among the U.S., India, and Japan, although it is unclear why Modi postponed a trip to Tokyo scheduled for July 3.
Defense. India and the U.S. should renew the 10-year defense framework agreement they signed in 2005 and build on the progress of the Defense Trade and Technology Initiative. Indian willingness to adhere to U.S. technology protection agreements will be critical to moving the Indo–U.S. defense relationship forward.
Civil Nuclear Cooperation. The U.S. should make a fresh push to resolve the nuclear liability issue. While in opposition, the BJP opposed the civil nuclear deal and pushed for nuclear liability legislation that complicated U.S. companies’ ability to invest in civil nuclear projects in India. Now that the BJP is in power, the party leaders may be willing to soften their position and build a political consensus around a resolution to the liability issue that would allow U.S. firms to invest in the civil nuclear sector.
Nonproliferation. The U.S. should continue to press for India’s membership in the four major multilateral nonproliferation groupings: the Nuclear Suppliers Group (NSG); the Missile Technology Control Regime (MTCR); the Australia Group (which seeks to control the export of chemical and biological weapons); and the Wassenaar Arrangement (which seeks to control the export of conventional arms and dual-use goods). The U.S. and U.K. support India’s admission to the NSG, but some NSG members have expressed concern that admitting India will erode the credibility of the Nuclear Nonproliferation Treaty (NPT), since India is not a signatory of the treaty. India should continue to improve its export control processes and the transparency of its strategic nuclear programs to help bolster its case for full membership in the multilateral nonproliferation groupings. The U.S. and other international partners need to develop fresh thinking about India’s relationship to the NPT and nonproliferation system that takes into account the reality that India will not join the NPT as a non-weapons state. Though the NSG is closely associated with the NPT, it is also fact that the NSG was originally created in a way that France could join even though it had not yet signed the NPT.
Afghanistan/Counterterrorism. The U.S. should expand and deepen its counterterrorism dialogue and cooperation with India. The future of Afghanistan should be a key component of the Indo–U.S. counterterrorism dialogue, particularly given the alarming situation in Iraq, where Islamist extremists are making gains in the absence of a U.S. force presence in the country. The U.S. should encourage India’s economic and political involvement in Afghanistan, which helps bolster the Afghan government’s efforts to fight terrorism. To kick-start the effort, the U.S. should send a high-level multi-agency delegation (from the CIA, the Department of Homeland Security, and the National Counterterrorism Center) to India to exchange views on regional terrorist threats.
Indo–Pakistani Relations. U.S. policymakers can take steps to reduce the possibility of deteriorating Indo–Pakistani relations. While U.S. officials should not seek a mediation role, they can work behind the scenes to encourage Indo–Pakistani dialogue and inject ideas for moving a peace process forward. Moreover, the U.S. must maintain pressure on Pakistan to crack down on Kashmir-focused terrorist groups. The Mumbai terrorist attacks of 2008 should be viewed as the culmination of U.S. failure to connect the dots between Pakistani support for Kashmir-focused terrorist groups and the broader international terrorist threat. Washington should also remain vigilant in monitoring the human rights situation inside Jammu and Kashmir, raising concerns with the Indian government when necessary. In the summer of 2010 protests that turned violent in Kashmir led to the killing of 126 Muslim youth by Indian security forces. The U.S. should encourage trade, joint economic projects, and civil society engagement among the people from both sides of Kashmir.
Religious Freedom. While the new Indian government is in its early days, so far there is reason for cautious optimism that it will focus on implementing policies beneficial for the Indian economy and that enhance India’s international role. Still, the U.S. should engage India on religious freedom issues to ensure that Modi follows through on his promises to meet the needs of all Indian citizens and stays away from controversial policies supported by hardliners within his party and associated organizations.
The election of a BJP government is likely to have a positive impact on the Indian economy and re-establish international confidence in India as a global power. If the U.S. demonstrates its willingness to establish close ties with the new government, it is likely that the BJP will reciprocate and the two sides can refocus on achieving the vision of a durable and strategic partnership.
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