Trump Didn’t Know India Could Be a Cash Cow

Trump Didn’t Know India Could Be a Cash Cow

With the visit of Prime Minister Narendra Modi to Washington on June 25, the India-United States relationship is entering a new phase. Modi has made an audacious bid to present India as a loyal contributor to ‘America First’, President Donald Trump’s ambitious project. Trump took note but the jury is still out whether Modi made a lasting impression on him. 

Modi had three main objectives in the visit – one, emulate the example of Japan’s Shinzo Abe to build bridges with Trump. Modi’s handicaps are two – he doesn’t play golf and, secondly, India lacks Japan’s surplus capital to invest in the US economy. 

But Modi made up by flaunting a seductive offer to order 205 civil aircraft from Boeing worth $20 billion and to negotiate a long term deal to import LNG from the US worth $45 billion as tangible evidence of India’s capacity to produce jobs in the US economy. Modi hoped to moderate Trump’s harsh criticism about the US’ trade imbalance with India to the tune of $30.8 billion. 

Within the new ambit of the US legislation designating India as a “major defence partner”, India also hopes to finalise a $2 billion dollar deal for the Guardian unarmed drones built by General Atomics. In addition, a potentially massive defence project is struggling to take off whereby Lockheed Martin has offered to build the F-16 Block 70 fighter jets in India on an integration line transferred from Fort Worth, Texas.   

Two, Modi hoped to influence Trump’s policy toward Pakistan in a direction that dovetails with India’s “muscular diplomacy” towards Islamabad. Modi’s visit to the US took place even as Trump administration is in the final lap of its policy review on Afghanistan. The Indian plea is that the US strategy in Afghanistan is fundamentally flawed insofar as Islamabad supports the Taliban and Haqqani network, providing them help and safe haven. 

As Delhi sees it, Trump administration must pressure Pakistan on putting the hammer down on extremist groups, going beyond rhetoric to a much tougher approach that inflicts pain – by conducting, if need be, military strikes on Pakistani territory and adding Pakistan to the US’ State Sponsors of Terrorism list. 

Alongside, there is a willingness bordering on eagerness on India’s part, as never before, to render material support to the US’ war efforts in Afghanistan. Some Indian military analysts have openly argued for deploying military personnel to Afghanistan. India is willing to go the whole hog to identify with any US strategy that aims at military victory over the Taliban. 

The US Defence Secretary James Mattis (and Secretary of State Rex Tillerson) called on Modi in Washington. Evidently, Afghanistan and Pakistan figured in a big way in Modi’s talks. Nonetheless, it remains to be seen how far Modi succeeded in swaying Trump’s thinking in a direction that India desires. 

Finally, Modi hoped to revive the verve of US-Indian strategic partnership. There is much nostalgia in Delhi for the Obama administration’s ‘pivot to Asia’. The Modi government had identified India closely with the US strategy to contain China. Unsurprisingly, there is gnawing anxiety in Delhi that Trump is exploring the possibility of a constructive engagement with China. 

However, Delhi expects that tensions are bound to surface eventually in the US-China ties, given the contradictions arising out of China’s overvaulting ambitions as a rising global power grating against the US’ stubborn intent to preserve its decades-old hegemony as superpower.

Therefore, while India pursues a multi-vector foreign policy with diverse relationships, it continues to attribute centrality to the “defining partnership” with the US. In strategic terms, India hopes that US would build it up as counterweight to China. Modi hoped to persuade Trump that this can be a ‘win-win’ enterprise,with India buying weapons worth tens of billions of dollars from the US vendors.

In geopolitical terms, India may only pay lip service to Eurasian integration, BRICS or Shanghai Cooperation Organization. Of course, India will continue to cherry pick. But, fundamentally, India will not associate with any strategic enterprise that may even remotely have an ‘anti-American’ disposition. 

Interestingly, there is already some talk that as quid pro for transferring the highly sophisticated drone technology to India, Washington expects Modi government to disengage from deepening of relations with Iran. Delhi has virtually frozen the big investment plans in Chabahar Port. 

Clearly, Delhi’s current negotiation to import LNG from the US in preference to much cheaper gas from Iran stems from a high-level political decision. 

Modi’s visit to the US is predicated on a host of Indian assumptions. Will Modi’s game plan work with Trump, who is a hard-nosed businessman? The short answer is it may turn out to be sheer naivety to underestimate Trump’s political instincts. 

Indeed, Trump thanked Modi for promising to deliver multi-billion dollar business for Boeing Company and the US shale industry. But then, he didn’t feel particularly obliged and went on to rap Modi on the knuckle publicly: 

“I look forward to working with you, Mr. Prime Minister, to create jobs in our countries, to grow our economies, and to create a trading relationship that is fair and reciprocal.  It is important that barriers be removed to the export of U.S. goods into your markets, and that we reduce our trade deficit with your country.”

For sure, Trump has assigned some difficult homework to Modi in regard of market access for US companies, tariff barriers and intellectual property rights. On June 21, the US Trade Representative identified intellectual property rights and 'pricing on pharmaceuticals and medical devices' and an unspecified list of other 'irritants' in trade with India. 

Four powerful Congressmen including the chairmen of the Senate Committees on Finance shot off a letter to Trump on the eve of Modi’s arrival in Washington taking great exception to India’s economic policies. They wrote that Modi’s economic policies “significantly harm” US business interests in the Indian market. Trump has ordered a report on redressing trade deficits with 16 priority countries, including India.

Trump was non-committal on Pakistan and China. He probably understands that the US needs Pakistan’s cooperation. The US ambassador to the UN Nikki Haley has disclosed – unwittingly, perhaps – that Trump aspires to mediate between India and Pakistan and has discussed this in the US National Security Council. 

If there is one country that can give a decisive push to ‘America First’ by making massive investments in the US economy, it is China. Ali Baba group alone pledged to create a million new jobs in America. Trump has discarded Obama’s ‘pivot’ strategy and there is no shred of evidence that he visualises India as ‘counterweight’ to China. 

If India wants to buy weapons or LNG or Boeing planes from America, it is fine with Trump. But that will not bind Trump down to a ‘defining partnership’ with India. Trump’s preference to transactional relationships is a legion and it is wishful thinking on the part of the Indian establishment to hope that he’d make an exception for Modi. 

After Modi’s US visit, India’s foreign-policy architecture looks shaky. But a reset in Modi’s foreign-policy calculus is too much to expect, given India’s political economy and the ideological moorings of the Hindu nationalist forces who mentor his government.

Tags: India  Modi