Atanu Dey On India's Development

India – the Next Big Player

Perception and reality are two different things, of course, but they do influence each other. How India is perceived by the US (and vice versa) matters. A significant shift in that perception is clearly visible, going by the writings of observers of the developing India-US relationship. John Mauldin’s Thoughts from the Frontline carries an analysis by George Friedman titled India the Next Big Player.

John writes in the introduction to the piece by George, “Last week we looked at China, and this week we look at India, the next rising superpower in Asia. I have asked my friend (and fellow Texan) George Friedman of Stratfor to give us his insights on the political implications of what appears to be a closer US-India relationship. Stratfor has been described by folks like Barron’s as being a private CIA. I find their daily letters plus his in-depth analysis to be as solid as anything I read. When George writes, I listen. George now thinks we may be seeing opportunities like those in China in 1980.”

Here is an extended quote from the analysis by Friedman. [The emphasis in bold is mine.]

Marginalization is the key concept for understanding India’s position in the world prior to 2001. Geography prevented it from having substantial interaction with the great powers. Its point of contact, Pakistan, was of some importance, but not decisive importance. Prior to becoming a nuclear power, India had only one recourse: naval power. But its economy would not support a full-blooded fleet-building program. Its strength was in its army, but that army could not be projected anywhere.

Its economy was also marginalized. Built on a socialist model that took the worst from Soviet planning and Western markets, the Indian economy isolated itself by laws that severely limited outside investment. Its infrastructure did not develop and, while several key industries — pharmaceuticals and electronics — emerged, this never created the fabric of what might be called a national economy. India was a huge, fragmented country, on the margins of the international system. Its friendship with the Soviets and its enmity with the United States were tepid on all sides.

Then came the 9/11 strikes, and the American relationship with the Islamic world was transformed almost overnight. Suddenly, Pakistan became a critical piece of the United States’ long-term war plan, and therefore India became an extremely valuable asset. The Indians understood two things. First, that as marginalized as they had been in the Cold War, they had become irrelevant to the international system in the post-Cold War period prior to 9/11. Second, they understood that the U.S.-jihadist war could become India’s entry into the broader international system.

U.S.-Indian collaboration began intensely shortly after 9/11. Part of it consisted of a mutual interest in manipulating Pakistan; part of it had broader implications. As the United States began to view the Muslim world as an unreliable and threatening entity, it started to see India in the same light as Israel. It was a potentially powerful ally that, in spite of its hostility to the Islamic world, or perhaps because of it, could be extremely useful. Long, complex negotiations ensued, leading up the present summit. The terms of endearment, so to speak, were defined. A range of issues on which the two sides could collaborate emerged.

A not-so-hidden issue at the summit in Washington was China. Sino-U.S. relations are deteriorating fairly rapidly. There was much speculation about India being an Asian counterweight to China. We have no idea what this means, since geographically China and India occupy two very different Asias. The United States doesn’t need a nuclear counterweight to China, and China is very far from becoming a major naval power capable of projecting force outside of its regional waters. By that, we do not mean sailing into these waters, but fighting, winning battles and sailing home. The nuclear technology agreement that Singh obtained in Washington increases the likelihood that China is not going to project force west of Singapore. On the other hand, it was never likely to do so.

There is, however, another dimension to this. For a generation, China has been the place where hot money in search of high returns was destined. It was where the action was. It is no longer that place, except in the minds of the nostalgic and delusional. But India could well be. If one thinks of China in 1980, the notion that its bureaucracy, lack of infrastructure and a culture antithetical to rapid development would yield the economic powerhouse of 2000 would have been unthinkable. It was unthinkable.

India is in China’s position of 1980. It has a mind-boggling bureaucracy, poor infrastructure and a culture antithetical to rapid development. At the same time, it has the basic materials that China built on. As the Sino-U.S. relationship deteriorates, India can be a counterweight to China — not in a military sense, but in an economic sense. If the United States has an economic alternative to China for investment, Washington develops leverage in its talks with Beijing on a host of issues. China, after all, still courts investment — even as the Chinese buy anything that isn’t Chinese.

Another factor underscoring the significance of the shift in Indo-U.S. relations is New Delhi’s relationship with Tehran. India’s relations with Iran have always been a serious point of contention and concern for the United States. However, due to the situation in Iraq, tensions with New Delhi over this issue are on the decline. The United States and Iran at the moment are developing parallel interests, each with their own reasons to work together to ensure the success of the fledgling Shia-dominated government in Baghdad.

The Indo-American relationship did not develop out of the subjective good will of the leaders. The Sept. 11 attacks created a dynamic that couldn’t be resisted, and that created a reality that the Bush-Singh summit confirmed. It doesn’t transform the world, but it changes it fundamentally. India will come out of this a very different country, and the United States will look at the Indian Ocean Basin in a very different way.

The entire piece is worth reading.

[Thanks to Myke for the link to Frontline Thoughts.]

  • http://tarunsblog.blogspot.com TTG

    As you can obviously predict, my response is: Great Article!

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  • geekgod

    If somebody is of the opinion that India is going to be the next superpower he /should substantiate his/her points by facts. And due to it’s geographical location Pakistan is as important to US as it was. And in terms economic might Pakistan (thanks to the heavy WOT aid ) is the third fastest growing economy next to China and India respectively. The growth in our country was due to the boom in the IT service sector. If we have to take in to account the recent trend, Our future seems to be bleak. Checkout this article. It discuss about the possible downfall of India’s It sector

  • Pardeshi

    Dear Atanu,
    Friedman’s article leaves me in much expectation;I infer that Indians don’t control that much their proper future.Apart from the IT sector, who cares about the development of pollution free industry.What does the rural population get in the bargain?
    Pardeshi