Does an alliance with Japan and the US serve India?
January 13, 2015, 6:52 am

Indian Prime Minister, Narendra Modi and the ruling Bharatiya Janata Party (BJP) appear ready to join a strategic alliance with Japan and the US.

Although unsaid and left at the level of diplomatic innuendos, Modi’s September visit to Japan, coupled with his oblique reference to Chinese aggressiveness in the South China Sea, seems to indicate Delhi is using Tokyo as a counterweight to Beijing.

Modi’s choice of Japan as the first destination for a bilateral visit points to this growing closeness between the two countries backed by Uncle Sam.

Take for instance the India-Japan Special Strategic Global Partnership, which states that “a closer and stronger strategic partnership between India and Japan is indispensable” for peace and stability but also for “interconnected Asia, Pacific and Indian Ocean Region.”

The document released by the two prime ministers also made a special mention of the “official level dialogue among India, Japan and United States” and added that they were hopeful that partnership would “advance” the shared interest and “that of other partners.”

India’s efforts to strengthen ties with the Philippines and Vietnam – two of the five countries that are engaged in territorial disputes with China in the same body of water – also appear to show there is an intent to cozy up to those who could be natural allies against Beijing.

During a visit to India last August, US Secretary of Defence, Chuck Hagel made pointed reference to this alliance as a means to counter China’s influence in the region. India’s location – jutting out as it does in the Indian Ocean – makes it a perfect partner in such an alliance, particularly as the US rebalances its pivot from the Gulf to Asia.

Aside from its geographic dividend – ports and bases that stand astride the Malacca Straights, the Indian Ocean and Arabian Sea – Delhi’s growing economic power makes sense for the US and Japan to pull India into the alliance. But does it make sense for India?

Exit Japan, enter China?

Amidst all these diplomatic maneuverings, Chinese Ambassador to India, Le Yucheng suggested in a recent statement that India form an economic alliance with China and the US.

It fits in with Modi’s primary strategy of lifting the moribund Indian economy by wooing investors, attracting more Foreign Direct Investment (FDI), and establishing a better business environment.

The ‘Make in India’ policy, unveiled from the ramparts of the Red Fort (former residence of the Mughal emperor) in his maiden Independence Day speech, is proof of this.

Subsequently, this was followed by a few measures like capping the amount of foreign investment that contributes to the national Defence budget.

Meanwhile, despite its economic problems China still remains the country that has the money that could push big-ticket reforms, particularly in infrastructure. China was India’s biggest trading partner till 2011.

China still has unresolved border disputes with India [AP]

Chinese exports to India, largely comprising machinery in recent years, went up only by 1.6 per cent. Annual figures indicated the second straight year of declines, highlighting an unexpected slowdown in rapidly growing trade ties.

These ties are considered to be the key drivers of a relationship that has endured despite political uncertainties, such as the long-running border disputes.

India’s foreign and defence ministries, meanwhile, continue to be suspicious about China and its intentions.

Trust issues

It is also important to note that while a number of countries have been allowed visas-on-arrival in India to facilitate business, this hasn’t yet been extended to China.

Visa restrictions for China continue like in the case of Pakistan and Bangladesh.

There could be, in the words of officials, justifiable reasons for such measures, such as the Chinese decision to give stapled visas for people from India’s north eastern state of Arunachal Pradesh region travelling to China.

China, much to the chagrin of India, has laid claims to Arunachal Pradesh and especially the Twang valley bordering China. The territorial claims and counter claims are a sore point in the relations between the two countries.

Instead of a normal visa which is stamped in the passport, China issues visas on a separate sheet of paper to residents of Arunachal Pradesh; this practice is seen as questioning Indian sovereignty.

From 2009, for a short time, this practice was also extended to residents of Jammu and Kashmir – regions that have been at the core of India-Pakistan disputes for over six decades.

In fact, officials cite frequent border tensions with China and the latter’s ‘all-weather’ friendship with “hostile” Pakistan as among the many reasons for  the Indian mindset.

No doubt China uses Pakistan to counterbalance India much in the same manner that it uses North Korea, the US and much of the world. But diplomacy is all about managing and aligning the contradictions.

Take, for example, the Israeli response in the mid-1940s to the British White Paper on the formation of a Jewish State.

After having initially declared its intention to favorably view the formation of a nation for Jews in the 1920’s, Britain in 1937 reneged on its promise and issued the White paper to this effect.

Jews who were then being exterminated by Nazi Germany were also fighting along the Allied forces.  The question then for the Jewish leadership was whether they should they continue fighting alongside Britain when it had back tracked on the formation of their separate state for Jews.

David Ben-Gurion, who would later become Israel’s first prime minister, famously quipped: “We must support the army as though there were no White Paper and fight the White Paper as though there were no war.”

The beauty of this response lies in its multiple dimensions and could benefit Modi and India greatly.

Multi-dimensional approach

What if India were to decide to counter Pakistan-backed China as if there were no trade or investment to be gained from China and embrace the investment and business from China as if there was no Pakistan or stapled visa for residents of Arunachal Pradesh?

The answer depends on Modi and his cabinet and how well they can dichotomize issues and handle seemingly intractable situations.

Looking at issues in an isolated manner rather than within the big picture may help the current government formulate such a multi-dimensional response.

But the big challenge to this is likely to come from Modi’s own flock – the ultra-nationalist right wing Hindu baggage that he carries.

Unlike the last BJP (Bharatiya Janata Party) Prime Minister – Atal Behari Vajpayee – Modi hasn’t been able to distance himself and severe the umbilical cord from the right-wing nationalist Rashtriya Syamsekav Sangh (RSS) organization.

That is where the greatest difficulty lies.

For the RSS and its associates, hatred for Pakistan and territorial integrity is priority; common sense is not.

Meanwhile, the US seems to have adopted the multi-dimensional approach – trading with China and countering it as well.

It is conceivable that increased Chinese trade, investment and business in India would make the need to use Islamabad as a counterweight to Delhi a moot point. Ultimately, this would further isolate an already troubled Pakistan.

And, finally, would the Chinese People’s Liberation Army be casual about violations along the border if there were a few billion dollars from China locked up in Indian soil?

Where is the money?

Amid a global recession, large-scale investment in India’s manufacturing sector would come with conditions, but in infrastructure, it is China which has the money and even seemed at one point keen to invest $100 billion.

The only problem with the India-Japan-US alliance is that it is far too security oriented – i.e. little or no economic benefits seem to be in the offing. The question also is where is the money?

Soon after promising India $35 billion, Japan declared it was in recession; this puts into question whether it can fulfill its commitments.  With the renewed availability of cheap energy – Fracking and Shale Gas in North America – industry is reviving in the US and outsourcing is no longer favored.

During his visit to India next month, Obama is expected to announce defence deals that would benefit US firms currently starved of contracts.

No valuable investment from the Indian perspective is expected, and the US “tilt” towards India as opposed to Pakistan is unlikely to lead to any major Indian strategic gains.

This is where the suggestion from China’s ambassador to India seems noteworthy. In a recent seminar he called for a China-US-India alliance that would be primarily economic in nature. The benefits?

“India, China and US, not only control 40 per cent of the world GDP but also economic co-operation would benefit 2.8 billion people,” Yucheng said.

Quoting Chinese President Xi Jinping, the Ambassador pointed to relations between Beijing and Washington, saying “the vast Pacific Ocean has ample space to accommodate our two great nations”.

On relations between Beijing and New Delhi, he said: “If we speak with one voice, the whole world will listen.”

Notwithstanding anti-dumping measures against China and allegations of cyber spying, US-China financial trade is on a sound footing.  The bilateral trade volume exceeded $520 billion in 2013, while two-way investment stocks exceed $100 billion.

If the US can address security concerns and yet do business with China, why shouldn’t the same approach work for India?

It is for India’s policy mandarins to decide what is best. Should our security considerations – whether real or perceived – override obvious economic benefits?

It is critical that Indian policy makers are able to stand back and decide for themselves whether or not there is indeed a security threat from China.

On the ground, except for a few minimal boundary stand-off and allegations of cyber attacks, there isn’t much to show.

Also, when one considers how the US snooped on German Chancellor Angela Merkel’s phones fishing for information, do these border violations amount to a security threat that should prevent us from increasing our economic and trading relations?

How real are the ‘threats’ from China? How much do India’s muscle-flexing actions against China in Nepal, Sri Lanka and Bangladesh actually work?

Given the recent “security-conscious” environment, a US-China-India economic alliance seems a distant dream. But have we really thought through the fall-out of a strategic alliance with US and Japan, especially one that ignores China?