India needs to do its share of heavy-lifting too.
News trickled in yesterday that New Delhi shorlisted two European fighter aircraft — Dassault’s Rafale and Eurofighter’s Typhoon as prospective candidates for the highly publicized $10 billion Medium Multi Role Combat Aircraft (MMRA) competition. My Takshashila colleagues Nitin Pai and Dhruva Jaishankar have two excellent posts on India’s MMCRA decision. Significantly, this decision meant the downlisting of two American firms competing for the MMRCA contract — Boeing’s F/A-18 and Lockheed’s F-16.
It is not everyday that countries sign $10 billion contracts for fighter aircraft. The sheer scale, value and nature of the MMRCA competition meant that geo-strategic considerations ought to have outweighed purely technical determinants. And while very valid concerns about U.S. fine-print have been raised, India has faced similar difficulties with less transparent suppliers, and that too, after signing substantial contracts (lest we forget the small matter about us having to pay $3 billion for an antiquated ship that we were initially supposed to receive for free). The truth is that India’s severely shackled defense industry necessitates entering into contracts for arms and equipment with foreign suppliers under conditions not entirely ideal. But deriving benefits from domestic defense industry liberalization — if and when this happens — will take several years. How does India fulfill its defense requirements in the interim?
U.S. ambassador to India Timothy Roemer was quoted as saying that he was “deeply disappointed” with the outcome. The downlisting of Boeing and Lockheed is but the latest evidence of ties between the world’s two largest democracies being somewhat adrift after Mr. Obama’s visit to India last year.
The civil nuclear deal between India and the U.S. was meant to be the cornerstone of a new age of Indo-U.S. ties, leaving behind decades of mutual mistrust, lecturing and moral posturing. The deal offered benefits to both India and the U.S. — for India, it meant international recognition as a de facto nuclear power, and for the U.S. it meant nuclear commerce with an emerging economy. It took the U.S. exercising its political clout to see that a waver based on Indian exceptionalism was granted at the NSG, which also required a last-minute call by George W. Bush to Hu Jintao to prevent China from stonewalling the vote.
However, today, U.S. firms are effectively non-participants in nuclear trade with India because of supplier liability imposed by India’s Nuclear Liability Bill. Globally, suppliers are unable to obtain insurance coverage for nuclear trade. Both Russian and French firms compete in India’ s nuclear market because they are essentially underwritten by their respective governments. And even then, the Russians have apparently made it clear to New Delhi that nuclear commerce with India is unsustainable in the long run under such circumstances.
Today India aspires for a permanent seat at the United Nations Security Council; but reforming the UNSC remains a distant dream. Even so, during Mr. Obama’s visit last year, India joined a select group of nations whose candidature the U.S. endorses. In its current stint as a non-permanent member of the UNSC, India must make its voice heard and break from a tradition that encourages prevarication and moral posturing. As I pointed out in a previous blogpost, it’s no use saying India deserves a permanent seat at the UNSC because it represents 1/6th of humanity, if that 1/6th of humanity seldom expresses an opinion.
Undoubtedly, there are bound to be differences in opinion between India and the U.S. Indeed, it is easy to focus on contentious areas (and there are several) — David Headley, climate change, Pakistan, Iran, Burma, to name a few. We need not agree on every aspect of global affairs, but as two large and pluralistic democracies, we share common values and interests, and ought to build our relationship on these shared ideals. And while it is important not to put undue focus on transactional aspects of our strategic partnership with the U.S., the MMRCA deal will have an impact on the trajectory of this relationship. And this we knew well before a decision on the shortlist was made. Indeed, Ambassador Roemer’s resignation hours after India’s announcement of the MMRCA shortlist is probably not a coincidence.
It is certainly conceivable that some of the momentum towards expanding this partnership will be tempered. Worse, when considered alongside the Nuclear Liability Bill, U.S. companies might soon conclude that the attractiveness of the Indian market is significantly less than the bandwidth they dedicate to it. After all, interest in India cannot be sustained merely by the “promise” of the Indian market, if none of those promises are materialized. We have always been eager to deliver our litany of demands to the U.S. — from Afghanistan, to pressuring Pakistan on terror. But how much are we willing to give in return? We need to ask ourselves if India is doing its share of the heavy-lifting in this bilateral relationship.