Now, Play the India Card

The u.s. war in Afghanistan drives home this point: We can no longer afford to analyze U.S. security policy in Asia pursuant to paradigms developed to fit the realities of the Cold War. Many of these realities have changed. For example, in the 1970s, when the Soviet Union was still the principal threat to the U.S., we played the China card. The Chinese were happy to oblige, confronting the Soviet threat as they did along their common border in Central Asia. For almost two decades, that reality — the threat posed to China by the Soviets — ensured a degree of alignment in U.S.-China strategic interests. Through this experience we came to see our relationship with China as valuable in its own right, not simply as a foil to Soviet power. The strategic reality in Asia changed with the collapse of the Soviet Union in 1989. But over a decade later, that same Cold War paradigm still makes us tend to analyze our relationship with China as though it were the centerpiece of U.S. foreign policy in Asia.

By contrast, by the time we played the China card in 1971, India had been relegated to a lesser role in our strategic thinking. That was not always the case. In the first two decades of the Cold War, India and Pakistan both had been viewed as frontline states, critical to containing the expansion of Soviet and (after 1949) Chinese communism in South Asia. By the late 60s, however, India had proved to be a feckless partner — a would-be great power, with neither the military nor the economic strength to enforce its utopian foreign policy. Worse, India in 1971 abandoned its preachy neutrality to become a full-fledged member of the Soviet camp. Pakistan, for its part, had been a more loyal ally in the Cold War, but was fractious in its relations with India. By the late 60s, both countries had come to be considered in Washington as “too difficult” to deal with. This development coincided with doctrinal changes that had begun to downplay the strategic importance of South Asia generally.

This is where the paradigm got stuck. What has evolved since is a pattern in which we ignore South Asia, including India, as irrelevant to U.S. interests — until crisis strikes. When the Soviets invaded Afghanistan in December of 1979, South Asia suddenly became important to us again, but at that point U.S. attention was focused primarily on Pakistan as a conduit for military aid to the Afghan mujahideen. Once the Soviets withdrew from Afghanistan in 1989, South Asia returned to the back burner.

Nuclear testing by both Pakistan and India in May 1998 provoked renewed U.S. concern with that now-nuclear rivalry, and nonproliferation economic and military sanctions followed. As a result, in the last two years of the Clinton administration, the India relationship enjoyed an unusual high-level focus, culminating in President Clinton’s May 2000 trip to India, the first presidential visit in 22 years (perhaps fittingly, the last visit having been made by President Carter on his nonproliferation crusade).

The September 11 attacks on the United States have kept South Asia in the limelight, as we have recruited both India and Pakistan to the war on terrorism. That very war on terrorism, however, has exacerbated tensions between Pakistan and India over continuing political violence in Kashmir. The result? Another flurry of high-level diplomatic activity by the United States, seeking to defuse these tensions between our two allies. But this most recent round of activity — successful as it was — still fits the pattern of crisis management with India that evolved during the Cold War. What is clearly needed is a more sustained level of engagement with India. This will only happen if we begin to appreciate India’s long-term strategic value to the United States. For this purpose, Kashmir, Pakistan, and even the war on terrorism are distractions. In the long term, our strategic interest in the region is plain: India is a major Asian democratic power with the potential economic and military strength to counter the adverse effects of China’s rise as a regional and world power. In other words, it is indeed time to “play the India card.”

The China paradigm

Since the mid-90s, the foreign policy community has engaged in a vigorous debate over how to deal with China in the wake of the Cold War — simply put, whether to “engage” or “contain.” Beyond a fundamental consensus that political liberalization in China would be a good thing, however, there is little agreement about ends and means. There is not even agreement across the board that China poses a strategic threat to the United States. Nonetheless, the relationship is widely viewed as vital to U.S. interests. It is not uncommon to hear otherwise responsible commentators intone that deterioration in the U.S.-China relationship will have “enormous negative consequences.” This kind of hyperbole is typical in discussions about China. Moreover, such exaggerations about our China relationship are often intended to imply that the U.S. must take responsibility for any deterioration in the relationship if it does occur. This starting point hampers our ability to consider all available responses to China’s periodic fits of intransigence.

If we stop focusing on the bilateral relationship with China — which is what the Cold War paradigm tends to make us do — and look at China in the context of what is at stake for U.S. interests in Asia as a whole, we could get different results. From this vantage point, even the question of whether China’s military modernization poses a threat to the United States is less critical. It is enough that China’s neighbors — Japan, Korea, Taiwan, the Philippines, the countries of Southeast Asia, Australia, India — are concerned about China’s military buildup, even if they do not always advertise the fact.¹ As a result, these countries always have one eye on Beijing, making them less attuned to U.S. regional and global concerns. If power is relational, as is often asserted, this result is by definition a setback to U.S. interests in Asia.

Moreover, these Asian nations have to see China not just as a potential military threat, but as an economic threat as well. To the extent that China uses its political muscle with the West to distort the allocation of foreign investment to China and to promote access for China to Western markets and technology, China is buying its own economic development at the expense of other developing countries in Asia. Many of those countries are democracies, and deserve our support against China for that reason alone.

Trade policy has proved to be singularly ineffective in promoting political liberalization in China. On the Chinese side, trade has strengthened the current political elite, turning them into classic rent-seekers, increasing prices and creating substantial distortions in the domestic allocation of economic resources for their own benefit.² In fact, if we are waiting for economic liberalization to foster political reform, we may be in for a long wait: At least one prominent development economist who has analyzed China’s current economic liberalization program has concluded that it is neither liberal nor sustainable.³

In any event, the U.S. is in no position to leverage its trade policy to promote Chinese liberalization, precisely because ours is an open society. Trade is conducted mainly by the private sector, and as constituents, private companies bring pressure to bear on the government to ensure that trade is not used as a political weapon. The debate over permanent mfn status for China is a case in point. Not under the same constraints, the Chinese government has proved itself highly adroit since the early 70s in using trade leverage to exact political concessions from the U.S. and other Western nations. Nor is the wto regime likely to change matters. China has shown great skill over the years at manipulating multilaterals to its own advantage, as Taiwan’s current diplomatic isolation well demonstrates.

Just because we are unable successfully to pressure the Chinese government through trade policy, however, does not mean that we cannot and should not use security policy to that end. We are in a position to exact a price for China’s aggressive military and diplomatic behavior. One way to exert pressure is to force China’s hand, making it increase its military expenditures to confront as many external threats as possible. We can make this economic burden unbearable. This was after all the strategy that President Reagan used so successfully with the Soviet Union. Such is containment in the strict military sense. But we can and must go beyond that. The best security for the United States will come from surrounding China with successful, economically sound democracies. These nations will have the resources to sustain military spending and economies strong enough to retain political independence. They will also challenge China ideologically — reminding China every day of what it has been unable to accomplish politically.

In Northeast Asia, the democratic tradition is strong, and we can count on Australia and New Zealand to anchor our efforts to the south. To the west and north of China, Russia will always be the principal player, and while Russia’s future is by no means secured, its ties to the West seem stronger every year. The spread of radical Islam, however, reminds us that there is much work yet to be done with the states of Central Asia, in South Asia, and even in parts of Southeast Asia.

India is the most overlooked of our potential allies in a strategy of containing China in this broader sense. For decades, the Cold War helped obscure this strategic reality in continental Asia: China is a threat to India. In fact, since the end of the Cold War, and with advances in missile technology, that threat has increased exponentially.⁴ India, the world’s most populous democracy, now confronts China, the world’s most populous autocratic state, in a strategic environment where minutes count. In a sense, India now finds itself vis-à-vis China in the same posture China was with respect to Russia 30 years ago. This fact alone should make us reassess our long-term relationship with India. There are, however, other factors in the relationship — in addition to the strategic — that will assure an alignment of interests between India and the U.S. in the years to come.

To understand why India is the right candidate to be a key U.S. ally in Asia, we must understand something of India’s history, for it helps explain why India’s relationship with the United States has been as bad as it has for 50 years, and why that is now changing.

Who lost India?

India’s story since independence in 1947 is one of successive economic development failures. Many excuses are given for these failures. It is true that India as a nation confronts astounding obstacles by virtue of its own internal diversity — 24 languages (all mutually unintelligible) are spoken by at least a million people or more (and the usual perception aside, less than 7 percent of the population speaks English); at least four major cultural traditions survive; no fewer than seven different religions coexist; geography as varied as the Himalayas and the Gangetic delta flood plain exists within India’s borders; and, at last count, more than 25 political parties vied for the Indian popular vote. It is equally true, however, that the British left India not only with a strong sense of national identity but also with democratic institutions; a well-developed transportation and communication infrastructure; some manufacturing base together with the management talent to run it; and a functioning banking and finance system. These assets, taken together with India’s enormous human capital, should have provided a robust foundation for a successful Indian economy.

Unfortunately, Britain’s principal legacy to India was bureaucrats. Millions of them. The critical juncture in India’s modern intellectual and political history was the Indian War of 1857, fought between the British and their Indian subjects.⁵ After the war, Whitehall assumed direct responsibility for the administration of India, ending 250 years of rule by the British East India Company. Whitehall’s administration proved a triumph for the forces of progressivism. The British government moved quickly to establish new universities modeled on Cambridge and Oxford and intended specifically to train future generations of leaders for India. This policy had far-reaching consequences, for it permanently redefined the Indian political elite. At the time, there already existed in India a middle class of sorts — members of the traditional merchant class; moneylenders whose role had evolved since the introduction of private ownership of land in the late eighteenth century and the development of a money-based economy; civil servants who had served in the lower ranks of the East India Company’s administration; and brahmins who for millennia had been key participants in India’s political class. In time, this variety of interests may have created a middle class of the type that evolved in early Europe, for which commercial interests were always a factor. Instead, status as a member of the new Indian political elite would now require graduation from these elite universities.

By independence, this new elite had dominated India’s political landscape for nearly a century, through institutions such as the Indian National Congress established by the British in 1885. They shared a remarkably uniform intellectual worldview, which in time came to include the tenets of Fabian socialism. This particular brand of socialism developed in the 1880s in England as an attempt to salvage Marxism from what then appeared to be its all too accurate predictions of class struggle and labor violence. Rejecting the “revolutionary struggle” aspects of Marxism, the Fabians nonetheless believed in state ownership and bureaucratic leadership, seeing this as a way to attain the ideals of socialism without the attendant violence. This new philosophy resonated with the traditional caste system, reinforcing the status of the Hindu brahmin against the lower merchant class. And the tenets of socialism, with their emphasis on a vigorous elite to lead the economy, were readily absorbed by a brahmin caste already confident of its role in a cosmic world order. The stage was set for India’s selection after independence of a top-down economic development model, emphasizing central planning, an expansive public sector, and overbearing regulation of those sectors of the economy that were left in the private domain.

Ironically, Britain’s Labour government after World War ii, enraptured with the same Fabian principles, made a similar choice for Britain’s postwar economy, but in a country at a much higher level of economic and social advancement. Britain eventually learned that some ideas are just too expensive. For India, however, the consequences of these ideas were nothing short of tragic.

India’s ideological “monotheism” was reflected in its political system. From the outset, Indian politics was dominated by the Congress Party, whose power evolved out of the Indian National Congress. Until very recently, one family has controlled that Party and still wields enormous influence in it today. Jawaharlal Nehru was “Mahatma” Gandhi’s hand-picked successor to the National Congress, rising to prominence in the late 1920s. Nehru became India’s first prime minister after independence and served continuously in that office until his death in 1964. In 1966, his daughter and only child, Indira Gandhi (no relation to the Mahatma) became prime minister, serving until her death by assassination in 1984, with only one brief period out of office (1977-1979). Indira’s son, Rajiv, assumed the mantle after his mother’s death and served until 1989, when he lost general elections as a result of a financial scandal. Rajiv was assassinated in 1991 during a campaign during which he appeared to be making a political comeback. Today, Rajiv’s widow, Sonia, continues as an influential member of the Congress Party leadership.

Nehru was a devout Fabian, and his socialist credentials were impeccable. On his first visit to the Soviet Union in 1927, he was so impressed with what he saw that “he became India’s foremost advocate of Five Year Plans as the key to ‘resolving’ her premier problem of poverty.”⁶ He instituted India’s first central planning system, the system that was in place in India starting from the mid-1950s.

How bad has the performance of India’s economy been since independence? It is often facetiously said that India’s economy has expanded at the “Hindu rate of growth,” or about 1.5 percent annually. This is at the same time that development economists agree that India’s central planners were the world’s best from a technical perspective.

The same utopian threads that ran through Nehru’s approach to the economy colored his approach to foreign policy, where he early on set himself up as a moral arbiter of Western diplomacy in the Cold War. Most indicative of Nehru’s efforts was India’s participation in the Nonaligned Movement (nam). In 1955, he was instrumental in organizing the Bandung Conference, the precursor to nam. At Bandung, 29 former European colonies from Asia and Africa met to discuss an agenda that addressed such matters as economic development, cultural cooperation, human rights and national self-determination, the evils of colonialism, and world peace. The organization was racialist and anti-colonial from the beginning. nam purported to provide an opportunity for developing countries to pursue a foreign policy independent of both the United States and the Soviet Union in the Cold War, but it was never really “nonaligned.” Most nam members were communists or socialists who blamed their ills on the former European colonialists. Thus they conveniently turned a blind eye to Russian and Chinese imperial activities, both at home and abroad, but were always ready to lecture the U.S. about the Cold War.

India’s early relationship with the Chinese communists is instructive on the naïveté of Nehru’s foreign policy. Nehru made a great show at Bandung of bringing China into nam under India’s wing. This incensed the Chinese communists, who saw their place in the world quite differently, as heirs to the great power status granted to China at Yalta. India by contrast could only aspire to such status. Chou Enlai, who was China’s representative at Bandung, was infuriated by Nehru’s condescension. After Bandung, affairs with China continued to deteriorate, growing openly contentious over Tibet in 1959. The long-festering border disagreement between India and China erupted into a hot war in 1962 when China invaded India through the eastern range of the Himalayas. The United States came to India’s aid with a massive airlift to put Indian troops and U.S. materiel where they were needed in the mountain engagement. The war with China was a blow to Nehru’s foreign policy and to him personally, probably hastening his death.⁷ India’s relations with China remain strained to this day.

On Nehru’s death in 1964, India still walked the line between the two superpowers in matters of foreign policy but had little to show for its nonaligned efforts. On the domestic front, India had just as little to show for its economic development efforts after 15 years of central planning. Moreover, by the mid-1960s, the efficacy of central planning itself should have appeared highly suspect. Khrushchev had been forced to declare his first Seven Year Plan a failure in 1963. The rioting that resulted from this failure led in part to Khrushchev’s downfall in November of 1964.⁸ Meanwhile, China’s experiments in central planning had resulted in a series of tragic economic failures, including the Great Leap Forward in 1957-58 which destroyed Chinese industry and agriculture and left untold millions dead, victims of the three years of famine that followed. With Nehru’s departure, there was a window of opportunity for India to experiment with more market-driven development models, but that was not to be, thanks largely to Indira Gandhi and her obsession for power.

Left turn, right turn

Indira gandhi will be best remembered for her shift to the left, both in foreign affairs and the economy. In 1971, Indira turned left in foreign policy. To win India’s third undeclared war with Pakistan, Indira entered into a 20-year treaty with the Soviet Union. (The U.S. had refused to arm either side in the conflict.) India’s success in the war resulted in the establishment of East Pakistan as Bangladesh and left the balance of Pakistan (the western half) in massive disarray. Had it not been for intense pressure from Washington, it is likely that India would have invaded and destroyed West Pakistan as well.⁹

The economy was not in good shape when Indira took office in 1966, and her advisers advocated liberalization to boost production in the private sector. Against this advice, Indira in 1969 chose to turn left on the economy, pumping up public sector spending, strengthening the central planning apparatus of the state, and nationalizing India’s banking and financial industry. To implement her “reforms,” Indira had to fire her own minister of finance, which caused bitter infighting within the Congress Party. To avoid ouster by her own party leadership, Indira turned to the left politically as well, forging a new left-wing alliance with several smaller socialist and communist parties.

The economy continued to plague Indira throughout the 1970s. In the early 80s, the prime minister was preoccupied with the rise of Sikh terrorism in northwest India. After one particularly bloody campaign against the militants, on October 31, 1984, Indira was assassinated by her own Sikh bodyguards.

When Rajiv assumed leadership in 1984 after his mother’s death, things could hardly have looked gloomier for India — either in foreign policy or economic development. Recognizing this, Rajiv’s administration attempted initiatives on both fronts.

The Indian economy at the time was characterized by a heavily regulated, inefficient private sector, a bloated public sector, labor market rigidities affecting both the public and private sectors, and government revenues stalled at a high level of government spending. Rajiv attempted some liberalization measures, aimed mainly at increasing efficiency in the private sector. These were steps in the right direction but had only a limited effect on productivity and growth and did nothing to curb government spending.

In foreign policy, the mid-1980s were no better for India, which found itself diplomatically isolated. Russia had become bogged down in Afghanistan and could no longer be counted on for economic and military aid. In addition, starting in 1985 under Gorbachev, the Soviets eased tensions with the Chinese. Inasmuch as the Soviets had supported India principally to irritate China, Soviet interest in India was fading fast. The Soviet involvement in Afghanistan had caused renewed U.S. interest in Pakistan, India’s long-standing rival. U.S. relations with China continued to improve. Rajiv attempted to rejuvenate Delhi’s relationship with the U.S., making his first official trip to the U.S. in 1985 and another in 1987. Rajiv also traveled to China and Pakistan in efforts to break through India’s isolation.

Rajiv may have been on the right track in foreign policy, but the domestic situation only worsened. For a time in the late 80s, Rajiv was able to subsidize excessive government spending through borrowing from the overseas Indian community, but inflation continued unabated. Defense industry scandals also plagued his administration. In 1989, Rajiv and his Congress Party lost national elections and were replaced by a coalition government, which fared no better. In the 1991 elections, a new, but minority, Congress Party coalition came to power under the leadership of Prime Minister Rao. The collapse of the Soviet Union and a decade of success in China under its market reforms were not lost on this government. This is the administration that is generally credited with implementation of India’s “first generation” economic reforms, though as Lal notes, there is much “unfinished business” for India in liberalizing its domestic economy. For example, the reform of the labor markets will be critical to privatization of India’s still overwhelming public sector and to greater efficiency in the private sector as well. India will also benefit from full “globalization” of its economy and the competition this will force on it. And in fact, India has little choice: Without access to foreign capital, it will never be able to build the infrastructure it needs to fully modernize its economy.¹⁰

Much of India’s success in this venture, however, will depend on new attitudes and new philosophies, without which the political elite cannot move India into the mainstream global economy or political order. Developments over the past decade shed light on how this process is evolving and suggest that real changes in the composition and attitudes of India’s political elite are at last beginning to occur.

Behind the bjp phenomenon

Support for religious riots hardly seems an auspicious start for a political party that may be destined to lead India out of its century-old intellectual and economic quagmire. Popular support for the Bharatiya Janata Party (bjp) coalesced in 1992 around the most explosive ethnic issue India had confronted in a decade — should Hindus or Muslims have the right to build a temple at Ayodyah, land sacred to both religions in north central India? Like so many disputes in India, the issue goes back hundreds of years but still arouses modern passions — and violent riots. The temple is back in the news this year as rioting has erupted again over control of the land, causing hundreds of deaths on both sides. The matter is currently before the Indian Supreme Court, which has enjoined any construction at the site while it considers the issue.

Ayodyah raises questions about the true nature of the bjp and its political philosophy. At the very least, the bjp is a strongly nationalistic, conservative Hindu party. Detractors point to its political allies, such as Shiv Sena, led by one Bal Thackeray, who has been known to have kind words for Hitler. Other allies include the rss (National Volunteers Organization) and the vhp (Hindu World Council). Both are fervent Hindu nationalistic grass roots organizations, and no strangers to violence. While the temple issue has political resonance with some members of these groups, the violence it fosters does not help the bjp to attract the support of the new, more secular middle class that is emerging in India — the new political elite.

This is an important group to understand, for they could not be more different from the old brahmin elite that has guided India in the past century. Certainly, the new middle class still has brahmin members, but there are key differences. First, these individuals are graduates of a much less elitist system of higher education. At independence in 1947, India had 20 universities and 500 colleges. Expansion of the system began immediately, and by 1990 there were 117 universities and 7,346 colleges. In the past decade alone, these numbers have increased to 283 universities and 10,600 colleges. Today, India’s higher education system is one of the largest in the world, and it is still growing.¹¹ Many Indians have also been educated in the United States or are the children of parents who have attended U.S. universities since the 1970s.

Moreover, many of these people are in business. The day when the children of bureaucrats went on into the civil service is gone, thanks in part to falling relative incomes in the public sector. And those who are in business are most likely doing business with the United States. The U.S. is India’s largest trading partner by a wide margin, and the New Economy has had a substantial impact in India, as well as the United States. Almost 40 percent of the technology start-ups in Silicon Valley are owned and financed by Indian money. Between business and professional ties, the Indian population in the U.S. now numbers almost 2 million, and they are the single most affluent ethnic group in America. These are people to whom economic liberalization in India will be beneficial. They also understand that a nation’s economic power is the foundation of its military might. They appreciate fully the implications of the Soviet Union’s collapse and China’s economic growth.

One place where the new middle class makes common cause with its fellow countrymen, of all classes and castes, is in its nationalistic enthusiasm. All Indians want their country to take its place in the world as a recognized great power — another reason the China example is so compelling to them. The bjp has shown itself to be adroit at tapping this nationalist fervor, as it did in 1998 when it incurred the wrath of the U.S. by detonating a nuclear bomb. The domestic approval rating for their action was 91 percent.

Members of this new class may be nationalistic, but they are not supporters of domestic political violence. As violence over Ayodyah reared its ugly head again this year, the bjp was severely trounced in February in three major state elections where it has done well in the past. The bjp was not only affected locally but is also suffering repercussions within its ruling coalition, the National Democratic Alliance (nda). The bjp’s control of the national government does not appear to be in jeopardy for the time being, but the point has been made — the bulk of the bjp’s supporters want no part of political and religious violence.

To its credit, the bjp has demonstrated the ability to be pragmatic when circumstances require. The bjp may have many supporters who believe in a nation characterized by a revitalized, more assertive Hinduism. In a coalition government, however, the bjp cannot afford to cater to these demands while ignoring the demands of other parties’ constituents. And coalition governments are now the defining characteristic of politics in New Delhi. With the decline of the Congress Party since 1989 and the rise of state parties, coalition government is here to stay for India. The bjp has demonstrated considerable mastery of the skills necessary to survive in this political environment.

The ultimate test for the bjp, however, will be whether it can manage India’s transition to a high-growth economy that is fully integrated with the rest of the world. If it succeeds in that task, it will be able to deliver the stability of government that India so badly needs. This is where the support of the new middle class will be essential. Here, too, the bjp has the advantage of not being wedded to the old discredited ideas of the Congress Party. It can move beyond the stale socialism of the traditional political elite to adopt economic and social reforms.

Despite the communal violence over issues like Ayodyah, India’s political culture still deems the ballot box to be the only legitimate way to resolve political conflict. Evidence of this fact is that voter turnout has actually increased in the past decade; before 1989, turnout was typically well under 50 percent but has recently climbed into the 60 percent range.¹² Democracy in India has emerged from the past decade more vibrant than ever.

Certainly democracy complicates policy decisions for the central government. Just as in the United States, foreign policy in particular suffers because the executive branch has difficulty taking and maintaining long-term positions with foreign governments — which is precisely what successful foreign policy requires. We can expect the bjp, or any other coalition government, to confront this problem, just as we do. But the bjp for all its “xenophobia” has worked well with the U.S. in recent months, and notwithstanding our 1998 sanctions, progress has been made in the overall relationship for some time now. From the U.S. perspective, the bjp has been much more realistic in its foreign policy expectations and has shown little interest in reverting to the military adventurism in South Asia that marked Indian foreign policy during the 1970s and 80s under the idealistic “Nehruvians.”

The U.S. policy agenda

We cannot change India, nor should we want to. If we articulate our own interests in Asia, however, it is impossible to ignore that a wealthy, armed India would be an asset to U.S. interests, with little downside risk. Others have described U.S. interests in Asia from a variety of perspectives — strategic, ideological, economic, and humanitarian.¹³ Of these, the most likely to sustain long-term U.S. engagement with India is the strategic interest — the knowledge that successful development in India helps hedge our bets against an aggressive, undemocratic China. As noted at the outset, a strong India raises the price of China’s military buildup and expansionist policies in Asia. A strong India would also send the message that democracy in a developing country is not incompatible with rapid growth and wealth. This is a message worth sending not just to China and other authoritarian states, but also to all the states of Asia troubled by Islamic fundamentalism. India has the unenviable distinction of lying at the heart of the Islamic world, spanning the globe as Islam does from North Africa through the Middle East to Southeast Asia and the Philippines. Not only can India deliver a positive economic message, but its success as a state composed of varying ethnic and religious groups is an important example for others.

What would a sustained U.S. policy toward India look like? It would address at least five elements outlined below.

Nuclear policy. Non-proliferation policy in South Asia is bankrupt. No one could seriously expect a democratic government responsible for the welfare of a billion people to ignore the nuclear capabilities of Pakistan, China, or Russia. We must recognize this as a legitimate national security concern for India. The United States sensibly ignored the abm Treaty when the strategic environment changed and the treaty imposed obstacles to the development of missile defense systems. So too, India has refused to be left permanently without nuclear options because it did not happen to have a nuclear weapon when the Nuclear Non-Proliferation Treaty (npt) went into effect. It has been credibly asserted that the one thing U.S. nonproliferation diplomacy did accomplish during the 90s is to ensure that the Indian nuclear deterrent — whatever its ultimate composition — will be “most certainly ‘weaponized’ and probably ‘deployed’.”¹⁴

If we stop treating nonproliferation as a matter of ideological orthodoxy, we can determine how best to cope with India’s stated goal of developing a nuclear deterrent to confront the Pakistani and Chinese threats. In developing our policy for India’s nuclear future, we confront two levels of obstacles — our current treaty and multilateral obligations, and U.S. domestic law — all related to nuclear nonproliferation. U.S. law has hampered our policy toward South Asia since the 1970s but poses less of a problem today, mainly because the president now has the statutory authority to waive most automatic sanctions that would otherwise apply to countries that engage in nuclear weapons testing and related activities.¹⁵ In the current political environment Congress is unlikely to challenge the president’s waiver authority, but that environment can change. The war on terrorism represents an opportunity for the president to seek rescission of these legislative obstacles, putting discretion for these matters back where they belong — in the executive branch rather than in Congress. India’s many friends in Congress should be willing to assist in this effort.

A more intractable set of issues arises from our treaty obligations, most specifically those contained in the npt. The npt obligates the five “nuclear-weapons States” (the U.S., the former Soviet Union, Great Britain, France, and China) not to transfer nuclear weapons technology to any recipient; the npt obligates all other parties to the treaty — “non-nuclear-weapons States” — to refrain from receiving such technology. Non-nuclear states are also obligated to accept safeguards developed by the International Atomic Energy Agency, to prevent the diversion of fissionable material and equipment (mainly nuclear power plants) from peaceful to weapons applications. What the treaty does not contain is any requirement for sanctions against countries that refuse to participate, and India has never signed the treaty. Given the system’s significant failure to halt proliferation, there is a principled case to be made for scrapping the whole or parts of the structure, or at least U.S. withdrawal from it. (Any state can withdraw from the treaty if that state determines that “extraordinary events . . . have jeopardized the supreme interests of its country.”) Inasmuch as there seems to be little appetite in the U.S. government for such a course of action, however, we have two options: We can attempt to get India into the npt system as a nuclear state, or we can make it U.S. policy to ignore India’s nuclear program.

Unfortunately, getting India into the treaty would require its amendment, and amendment requires, among other things, unanimous agreement of all the nuclear states as defined, that is, those who possessed nuclear weapons as of January 1, 1967. It is hard to imagine China’s casting an affirmative vote on this issue, even though it was China’s breach of its npt obligations through transfers to Pakistan that raised the nuclear stakes to their current level in South Asia. The Chinese attitude may change, but probably not until India has successfully deployed nuclear missiles that can reach Chinese targets.

If we were starting from a clean slate, we would want to give careful consideration to assisting India’s nuclear development, not just to advance U.S. strategic interests in Asia but also to keep tabs on what India is actually up to. Since that is unlikely, calculated ambiguity toward the India program may be the best policy option we have. This appears to be current U.S. policy, but policymakers also seem to have their fingers crossed that India will not conduct nuclear tests again any time soon, which is probably wishful thinking. If India tests again, expect to see nonproliferation advocates expressing their concerns vociferously. To preserve its policy options toward India, the administration would do well by that time to have rolled back congressional nonproliferation legislation as much as possible.

Of course India must expect to pay a price for our noninterference in its nuclear program and abstention from sanctions. At the very least, India must agree not to engage in proliferation of its own (Iran in particular comes to mind), nor to develop missiles capable of targeting the United States. In the meantime, the only development that is likely to change India’s determination with respect to its nuclear program is access to U.S. missile defense capabilities as that technology becomes available.

Pakistan. Closely related to nuclear policy is the relationship among India, Pakistan, and the United States. That Pakistan even exists is viewed by most Indians as the result of an act of perfidy by the British at the time of independence. With a population that is 12 percent Muslim, India cannot accept that the two religions must have “two nations” and cannot live side-by-side. As a result, ever since partition in 1947, the relationship between Pakistan and India has been an emotional one. Its intensity is evidenced by the fact that India and Pakistan have engaged in open warfare five times — in 1948, 1965, 1971, 1984, and 1999 — and India almost started a sixth, all-out war during its military exercise “Brasstacks” in 1987. The relationship has been most recently aggravated by terrorist operations in Kashmir, which Pakistan has actively supported for some years.

Then there is the nuclear aspect of the relationship. India’s defense minister, George Fernandez, has stated this year that Pakistan’s nuclear facilities are safe and under the control of responsible and serious people. Instability in Pakistan — or ultimately the collapse of its government — would have two negative consequences for India. First, it would put Pakistan’s nuclear capabilities in unknown hands, and very likely the hands of people who would no doubt be serious but not responsible. Second, instead of having Pakistan and Afghanistan on the front lines of the war against fundamentalist Islamic terrorism, India would have those forces operating directly against its borders, with no buffer at all. U.S. and Indian concerns about Pakistan are closely aligned in this respect. An unstable Pakistan, combined with the lack of a prolonged U.S. involvement there, would also open the door to further mischief by China in that country.

All these factors seem to dictate a U.S. presence in Pakistan, and not just to prosecute the war on terrorism. India must not only accept that fact but recognize that U.S. aid — both economic and military — is essential if the U.S. is to have influence with the government there. Both India and the United States also have an interest in seeing the return of democracy in Pakistan. Democracy does not necessarily lead to a less aggressive nuclear policy — as we have seen in India under the bjp as well as in Pakistan during Benazir Bhutto’s administration. But American support for democracy is the only way to attract the Pakistani middle class, as a force for moderation, back into the domestic political process.

Even aid leverage is unlikely to be sufficient to get Pakistan to abandon its nuclear program. We appear to have two options: We can ignore the program (as we did during much of the 1980s), or we can offer further incentives to get Pakistan to cap or eliminate it. Possible incentives would include a U.S. guarantee of the peace between Pakistan and India or the transfer of missile defense technology to Pakistan (and India) as it becomes available. Transparency for India and Pakistan with respect to their nuclear programs would go a long way to assuaging their mutual concerns about living cheek-by-jowl on a nuclear subcontinent, and that is a process we can facilitate.

That leaves Kashmir as a principal impediment to improved Indo-Pakistani relations. The U.S. clearly has a role — which it is already asserting — in persuading Pakistan to stop support for the terrorist violence in Kashmir. In return, India must demonstrate that it is advancing democracy in Kashmir in a way that is acceptable to us and the international community. (This September’s state elections in Kashmir should be a good starting point.) There can certainly be no U.S. support for a greater Indian role on the un Security Council so long as the Kashmir situation continues unabated.

In all of these matters, the one lesson we must remember is that our efforts in working with India and Pakistan will only be successful to the extent that they are low-key. To see this, we need only contrast our successful handling of the Indus River water dispute between Pakistan and India in 1960 with our bungled efforts on human rights matters relating to Kashmir during the first Clinton administration.¹⁶ Based on its handling of the Kashmir situation in June of this year, the current administration seems to have taken that lesson to heart.

Military cooperation. The need for military cooperation with Pakistan is self-evident, if only to ensure that Pakistan does not look to China for these resources. As for India, we should wean it from its reliance on Russian weapons. Keeping both Pakistan and India reliant on technology and resupply from the United States would give us leverage with both states to help keep the peace in any future military confrontation. With India, there is an additional complication — its indigenous defense industry. It is hard to see why we would object to assisting India with development in that sector, which suffers from a variety of problems. At the very least, where we are dealing with a major democratic nation, it would be comforting to think that our military-to-military contacts would be at least “similar to those now conducted with the Chinese.”¹⁷ Moreover, improved relations with India could in time help us to cope with the forward basing problems we confront in Asia and the Middle East. On a more prosaic note, India is ideally situated to intercept and disrupt the intelligence networks of Islamic extremist groups. The current war on terrorism has thus ensured that military contacts will continue, and at a very high level, at least for now. For these contacts to endure, it is important that they be institutionalized. The creation of the Defense Policy Group on India at the Department of Defense was an important first step in that process.

Economic liberalization. Inasmuch as India’s future strategic importance will be directly related to its ability to sustain economic growth, this is a matter of paramount concern both to India and the United States. This may in some respects prove to be the hardest issue for the two countries to address on a government-to-government basis. These issues cannot be resolved by diplomatic signals and mutual gestures. The effectiveness of India’s economic reforms will be tested in global markets. If they are found wanting, no amount of government posturing will change their defects. Still, in the context of a good overall relationship, the U.S. can encourage India to move forward with the reforms necessary to make itself attractive to foreign investors. These measures could be linked to continuing Western economic aid in the interim, to provide incentives for India to move quickly to implement these changes.

Continuing high-level focus. Even if we make progress on the above items, the relationship may become institutionalized, but only at a low level. Without a reassessment of the strategic value of India to U.S. interests in Asia taken as a whole, the current crisis will fade, and the White House will lose interest in India. The new “India lobby” developing in the U.S. may have some effect on the degree of high-level attention India gets in the future. But in the end, there must be an enduring U.S. interest at stake in India. That stake, if nothing else, is the success of an Asian democracy with the strength to offset China’s rising power in Asia and with strategic interests that are aligned with our own for the long haul.