posted December 18, 2006 09:23 PM              

By Caroline Daniel in Washington

Updated: 10 minutes ago

President George W. Bush on Monday signed an agreement to allow civil nuclear co-operation with India for the first time in three decades, calling it a "foundation for a new strategic partnership".

But India's prime minister warned he would not accept some of the conditions imposed on the deal by the US Congress. In a speech to the Indian parliament, Manmohan Singh said India would not accept "extraneous" conditions.

"India will find it difficult to and cannot accept any such conditions beyond those already agreed to in the understandings with the United States," he said, warning that "difficult negotiations lie ahead" as the two countries finalised the details of the bilateral agreement. Mr Bush emphasised the benefits of the deal for global energy usage, by helping India move towards cleaner nuclear technology, and the economic benefits of closer ties with India. But Nick Burns, undersecretary for political affairs, adopted more ambitious rhetoric.

He hailed the agreement as helping to "alter the strategic advantage in Asia and south Asia to the benefit of the US", and called India the "ultimate unfulfilled relationship since partition in 1947".

Mr Burns sought to play down Indian fears about the new conditions, such as requiring the US administration to report annually to Congress on India's ties with Iran's nuclear programme.

He said he met 25 members of the Indian parliament to address concerns, and called the provision on Iran non-binding. "We had to explain to the Indians that, when Congress writes a bill, there are operative paragraphs and there are non-operative, non-binding provisions of any bill . . . "

US officials hope the agreement will give US companies such as Westinghouse a "leg up" in contracts for civilian nuclear plants in India, but that cannot proceed until the final bilateral agreement is struck with the US on the details, India signs a safeguards agreement with the International Atomic Energy Agency, and the Nuclear Suppliers Group of 45 civil nuclear countries lifts its restrictions on India.

"How long will this take if we are in fifth gear? I would hope it could take six months," said Mr Burns.

He was confident that NSG approval would be given.

posted December 18, 2006 09:50 PM            

New Delhi

Three recent events illuminate the contours and fault lines of Asia's emerging strategic landscape, amid the lengthening shadows cast by China's growing power.

First, the United States and India consolidated a wide-ranging military, economic, and diplomatic partnership on December 9, when Congress passed legislation enabling U.S.-Indian civilian nuclear cooperation. Then, at a summit in Tokyo on December 15, the leaders of India and Japan declared their ambition for a strategic and economic entente between Asia's leading democracies. This stands in sharp contrast to the intensifying rivalry between India and China: Tensions over territory and Tibet simmered at a summit on November 21, where Indian prime minister Manmohan Singh's assertion that "there is enough [geopolitical] space for the two countries to develop together" sounded more like hope than conviction.

As its relationships with the United States, Japan, and China show, India has reemerged as a geopolitical swing state after decades of marginalization as a consequence of the Cold War, its own crippling underdevelopment, and regional conflict in South Asia. Although its status as a heavyweight in the globalized world of the 21st century is new, India's identity as a great power is not: It was for centuries one of the world's largest economies and, under British rule, a preeminent power in Asia. Today, a rising India flush with self-confidence from its growing prosperity is determined not to be left behind by China's economic and military ascent. "The [Indian] elephant," says an admiring Japanese official, "is about to gallop."

The United States has an enormous stake in the success of a rich, confident, democratic India that shares American ambitions to manage Chinese power, protect Indian Ocean sea lanes, safeguard an open international economy, stabilize a volatile region encompassing the heartland of jihadist extremism in Pakistan and Afghanistan, and prove to all those enamored of the Chinese model of authoritarian development that democracy is the firmest foundation for the achievement of humankind's most basic aspirations.

India is the world's biggest democracy, a nuclear power with the world's largest volunteer armed forces, and the world's second-fastest-growing major economy. Few countries will be more important to American security interests and American prosperity in the coming decades, as five centuries of Western management of the international system give way to a new economic and security order centered in the rimlands of the Indian and Pacific oceans.

India has been a factor in the global balance of power since at least 1510, when the establishment of a Portuguese trading colony at Goa broke a seven-century monopoly on the Indian Ocean spice trade by Muslim empires, unlocking the wealth of the East to European maritime states, which used it to build global empires. Possession of India propelled Britain to the peak of world power in the 19th century. "[T]he master of India," argued Britain's Lord Curzon, "must, under modern conditions, be the greatest power in the Asiatic Continent, and therefore . . . in the world."

During World War II, an Indian army under British command halted the Japanese army's relentless march across Asia, inflicting on Imperial Japan its first military defeat. India's location as an Indian Ocean and Himalayan power, its massive production of armaments, and its armed forces--which fought in Europe, North Africa, and Southeast Asia--contributed decisively to the Allied victory over the Axis powers.

Lord Curzon celebrated India's importance in The Place of India in the Empire (1909):

The central position of India, its magnificent resources, its teeming multitude of men, its great trading harbors, its reserve of military strength, supplying an army always in a high state of efficiency and capable of being hurled at a moment's notice upon any point either of Asia or Africa--all these are assets of precious value. On the West, India must exercise a predominant influence over the destinies of Persia and Afghanistan; on the north, it can veto any rival in Tibet; on the north-east . . . it can exert great pressure upon China, and it is one of the guardians of the autonomous existence of Siam.
Possession of India gave the British Empire its global reach. Britain lost its status as a world power when it lost India.

Independent India's first prime minister, Jawaharlal Nehru, shared Curzon's expansive vision, declaring India "the pivot round which the defense problems of the Middle East, the Indian Ocean, and Southeast Asia revolve." Wary Chinese strategists perceive a continuity of strategic design from Curzon to the Congress party today, accusing Nehru at that time of harboring ambitions for a "greater Indian empire," and more recently criticizing India's aspirations for "global military power."

"China and India," writes the Carnegie Endowment's Ashley Tellis, "appeared destined for competition almost from the moment of their creation as modern states."

The taproots of modern Sino-Indian conflict, argues historian John Garver, are found in the overlapping claims of traditional Indian

and Chinese spheres of influence in Asia, and in "conflicting nationalist narratives that lead patriots of the two sides to look to the same arenas in attempting to realize their nations' modern greatness." These conflicts create acute security dilemmas as India and China compete for influence across Central, South, and Southeast Asia, where strategic gains by one power magnify the vulnerabilities of the other.

Indian officials perceive a Chinese design to box India into its subregion, curbing India's ability to project power beyond its borders. China's 1950 invasion of Tibet, traditionally the buffer between China and British India, established the trend. Beijing maintains pressure on New Delhi by politely declining to resolve their 2,500-mile border dispute, a legacy of the 1962 Sino-Indian war. China has deployed nuclear weapons along its disputed border with India in Tibet. "The potential political and psychological impact" of nuclear-armed missiles "literally a few miles from India's border . . . cannot be underestimated," argues political scientist Amitabh Mattoo. China has refused to extend its nuclear "no first use" doctrine to include India.

China's military assistance to Pakistan, including the extensive transfer of nuclear and missile components, inflates the power of a state with which India has fought three wars, enabling Pakistan to challenge Indian primacy in South Asia. Since the 1990s, China has pursued a consistent policy of encircling India by supplying military assistance and training to its neighbors. The top three recipients of Chinese arms exports are Pakistan, Burma, and Bangladesh; China has also established military supply and exchange relationships with Nepal and Sri Lanka. China seeks to create "a string of anti-Indian influence around India" that is "designed to marginalize India in the long term," according to one Indian strategist. Prime Minister Singh laments "the desire of extraregional powers to keep us engaged in low-intensity conflicts and local problems, to weigh us down in a low-level equilibrium."

China is also expending money and manpower to construct strategic road and rail links in India's backyard. A high-altitude rail line linking Qinghai in China with Lhasa in Tibet, which began transporting Chinese military personnel in early December, reportedly features a planned southern spur leading to the disputed Sino-Indian border, enabling the rapid movement of Chinese military forces in the event of conflict. Beijing and Islamabad are conducting surveys for a rail line across the Karakoram mountains linking western China to northern Pakistan, which would tie up with Chinese-funded roads and railways leading to Pakistani ports on the Arabian Sea. China is reported to be considering construction of a rail link to Nepal, traditionally a buffer state under India's influence.

China has reportedly constructed 39 transport routes from its interior to its contested border with India--which Indian planners perceive as more of a military threat than a commercial opportunity, since much of the border is closed to trade. China's program of road and rail works along its border with the Indian state of Arunachal Pradesh, which Beijing claims as Chinese territory, has led New Delhi to accelerate "strategically important" road construction in the region. China is also funding extensive road and rail projects in Burma, traditionally the land corridor for both commerce and armies between East and South Asia.

Around India, China is constructing deep-water port facilities capable of berthing warships at Gwadar in Pakistan, on the Arabian Sea; at Rangoon, Kyaukpyu, and other harbors in Burma; at Chittagong in Bangladesh; and at Sihanoukville in Cambodia. Chinese engineers are dredging Burma's Irrawaddy River, which will give China a usable waterway connecting Yunnan province to the Bay of Bengal. China operates naval and radar facilities on Burma's Coco Islands, just 30 miles from Indian territory and strategically situated near the Straits of Malacca, through which pass half of all world oil shipments and one-third of all ship-borne cargo. India recently used its influence with the government of the Maldives to veto a Chinese request for naval access rights just off India's south coast.

The Pentagon has highlighted Beijing's design to construct a "string of pearls" of naval facilities stretching from Southeast Asia to the Persian Gulf--a project that will help China protect seaborne trade and, potentially, contain the Indian Navy's projection of power in what it considers its home seas. China's construction of transport infrastructure and port facilities that encircle India, says analyst Vikram Sood, is "designed to put India in pincers."

Amidst the drama of Washington's opening to Beijing in 1971, Henry Kissinger told President Nixon that no country in the world, with the possible exception of Great Britain, shared a greater convergence of strategic interests with America than Mao's China. Modern India's democratic identity, and a striking congruence of interests between Washington and New Delhi after the Cold War, give India the stronger claim to be America's "natural ally" in Asia.

As Prime Minister Singh has said, "If there is an 'idea of India' that the world should remember us by and regard us for, it is the idea of an inclusive and open society, a multicultural, multiethnic, multilingual society. All countries of the world will evolve in this direction as we move forward into the 21st century. Liberal democracy is the natural order of social and political organization in today's world. All alternate systems, authoritarian and majoritarian in varying degrees, are an aberration."

Former ambassador to India Robert Blackwill argues convincingly that New Delhi may more closely share America's core foreign policy goals and perception of threat than any of our traditional allies. More people have been killed by terrorists in India over the past 15 years than in any other country. This makes India a natural partner to America in the campaign against terror, centered in the Pakistan-Afghanistan nexus in India's backyard. Facing an acute missile threat from China and Pakistan, India embraced President Bush's missile defense plans when, in 2001, the president dismayed many traditional allies by withdrawing from the Anti-Ballistic Missile Treaty. India was among the first countries to offer America the use of its military facilities after the attacks of September 11, 2001.

India is encircled by failed and potentially failing states--including Afghanistan, Pakistan, Nepal, Burma, Bangladesh, and Sri Lanka. New Delhi shares Washington's interest in helping these countries develop durable democratic institutions. "India would like the whole of South Asia to emerge as a community of flourishing democracies," said Indian foreign secretary Shyam Saran in 2005.

America is India's largest trading partner. Continued annual economic growth of 8-9 percent depends on partnership with the world's largest economic power in trade, investment, technology, and market access. India's dependence on imported energy--and its intense competition with China for control of oil and gas supplies, from Ecuador to Angola--gives it an abiding interest in energy cooperation with America and Japan, including protecting the sea lanes linking the Persian Gulf to Asian waters.

India is committed to balancing Chinese power in Asia. "India has never waited for American permission to balance China," says Indian strategist Raja Mohan. "I tell the Americans: You balanced China from 1949 to 1971, but then allied with Beijing from 1971 to 1989. India has been balancing China since the day the Chinese invaded Tibet in 1950. We have always balanced China--and that's what we'll continue to do." India, Mohan insists, "will never play second fiddle to the Chinese."

The challenge posed to India's security and its identity as a democratic Asian power by the rise of authoritarian China is fueling the new warmth in India's relations with Washington and Tokyo.

"[T]here is a major realignment of forces taking place in Asia," explained India's foreign secretary in 2005. "There is the emergence of China as a global economic powerhouse. There will be increased capabilities that China will be able to bring to bear in this region and even beyond. India also is going to be a major player in Asia. . . . I think India and the United States can contribute to a much better balance in the Asian region."

India, according to Indian Express editor in chief Shekhar Gupta, faces a strategic choice between building economic and military power in partnership with America and playing underdog to China in a global anti-American axis. "Is it a good or bad thing for India that the Cold War is over and that, in a resultant unipolar world, it has a mutually beneficial relationship with the only superpower?" he asks. The alternative is for India "to be to tomorrow's China what Cuba was to yesterday's Soviet Union. . . . [G]o seek a referendum from the people of India on that."

Although Chinese military strategists worry less about India than about America and Japan, the prospect of an enduring Indo-U.S. military partnership attracts Beijing's full attention. Indian strategist Brahma Chellaney recounts, "On my visits to China, I have found as an Indian that the only time the Chinese sit up and listen is when the U.S.-India relationship comes up. India and the United States ganging up militarily is China's worst nightmare."

So, too, could be an emerging strategic entente between India and Japan. Japanese prime minister Shinzo Abe has said, "It is of crucial importance to Japan's national interest that we further strengthen our ties with India," which he calls "the most important bilateral relationship in the world."

Since assuming office in September, Abe has enthusiastically backed the concept of a quadrilateral security partnership among Japan, India, Australia, and the United States. Abe says the values of "freedom, democracy, human rights, and the rule of law" are central to Japan's identity as an Asian great power. "I believe Japan should play a role in trying to spread such values, for example in the Asian region," he recently told the Washington Post's Fred Hiatt. This makes democratic India a natural strategic partner.

Indian officials are enthusiastic about what Abe calls the development of a "new Asian order" based on strategic cooperation among Asian democracies. As Japan's ambassador in New Delhi, Yasukuni Enoki, recently put it, an Indo-Japanese strategic partnership could become "the driving force behind an emerging Asia," creating what Prime Minister Singh calls "an arc of advantage and prosperity" that will "enhance peace and stability in the Asian region and beyond."

Japan is expected to join India and the United States next year in high-profile naval exercises in the South China Sea. The two countries are pursuing a comprehensive economic partnership that includes Japanese provision of advanced technology to India to accelerate its rise. "India is the key counterweight to China in Asia, along with Vietnam," says one senior Japanese official. According to India's Mohan, "You'll see the India-Japan relationship change more over the next few years than any of our other key relationships. India-Japan is the next big game."

Such cooperation between a rising India and a more muscular Japan raises the prospect of what Chellaney, in his Asian Juggernaut: The Rise of China, India, and Japan, calls the emergence of an Asian "constellation of democracies" dedicated to preserving what the State Department's Nicholas Burns calls "a stable balance of power in all of the Asia-Pacific region--one that favors peace through the presence of strong democratic nations enjoying friendly relations with the United States."

To foster an Asian balance that safeguards its liberal principles, India will need to wield the appeal of its democratic values as a strategic asset. India played a key role in brokering Nepal's recent agreement to hold democratic elections, but it continues to appease Burma's military junta in ways that alienate its natural allies, the Burmese people. They voted overwhelmingly for the democratic, pro-Indian opposition in the country's last free elections.

"India's regional grand strategy must be based on our belief that what is good for us is also good for our neighbors; in other words, pluralistic political systems, the rule of law, the rights of the individual," argues Hindustan Times columnist Manoj Joshi. From Rawalpindi to Rangoon, Indian leaders will find that democrats make better neighbors than military dictators.

India's quest for strategic autonomy and its identity as a great civilization mean that it will never be the kind of subordinate ally the United States cultivated during the Cold War. The closest historical model for America's ambition to accelerate India's rise to world power may be France's decision to invest in Russia's economic and military modernization in the late 19th century. France's goal was to build Russia up as an equal partner to help manage the rise of German power in Europe--just as the United States today hopes to construct friendly centers of power in Asia to limit China's ultimate ambitions.

"We're fully willing and ready to assist in th[e] growth of India's global power, . . . which we see as largely positive," says Secretary of State Condoleezza Rice. Turning the caricature of ally-bashing unilateralism on its head, in India, the Bush administration is working concertedly, writes journalist Edward Luce, "to play midwife to the birth of a new great power."

Now the enactment in Washington of legislation enabling Indo-American civilian nuclear cooperation is a compelling riposte to leaders on the left and right of Indian politics who remain skeptical of Secretary Rice's commitment that America will be "a reliable partner for India as it makes its move as a global power." Senator Richard Lugar calls the agreement "the most important strategic diplomatic initiative undertaken by President Bush." India's "normalization" as a nuclear power through agreements with the United States, the Nuclear Suppliers Group, and the International Atomic Energy Agency will encourage it to remain a responsible nuclear state committed to upholding a global nuclear order from which it had previously been excluded.

Civilian nuclear cooperation with Washington gives India even greater incentives to maintain India's "impeccable" (Prime Minister Singh) and "excellent" (Secretary Rice) nonproliferation record. It should also encourage Indian cooperation containing Iran's nuclear weapons program: In February, India voted with the United States to refer Iran to the United Nations Security Council for possible sanctions.

The notion of a Sino-American partnership to contain India's rise as a nuclear power, as suggested by President Clinton's joint condemnation of India's nuclear tests with Chinese president Jiang Zemin in Beijing in 1998--and more recently by American critics of the U.S.-India nuclear deal--rankles Indian elites. They are confused by the determination of U.S. critics to hold India to a far higher proliferation standard than China has displayed in its transfer of nuclear technology to Pakistan. They are surprised that some American experts believe excluding India from the legitimate nuclear order is more faithful to the cause of nonproliferation than enmeshing India in the rules of the nuclear club. And they are baffled that the West would want to entrench a balance of terror between democratic India and authoritarian China that permanently favors the latter.

Economic dynamism is fueling India's geopolitical ambitions. This new vigor is somewhat mystifying when judged against the bureaucratic incompetence of the Indian state. Despite scandalous underinvestment in education, sanitation, health, and infrastructure, India's economy is growing at an annual rate of 8-9 percent and is forecast to surpass China as the world's fastest-growing major economy next year. India remains burdened by acute poverty, yet possesses an expanding middle class already larger than the entire population of the United States. It suffers from stifling and corrupt government, yet boasts world-beating companies with global reach. Its dizzying politics--which currently pit a profoundly reformist prime minister against old-fashioned Marxists and caste-based populists within his own governing coalition--do not lend themselves to the kind of strategic economic liberalization China's leaders have managed since 1978.

"To race China, first let's get our feet off the brakes," implores the former editor of the reformist Indian Express, Arun Shourie. If and when this happens, Indian power, prosperity, and culture could change the world.

India's rapidly expanding middle class is expected to constitute 60 percent of its billion-plus population by 2020. India is expected to surpass Japan in the 2020s as the world's third-largest economy at market exchange rates, and to surpass China around 2032 as the world's most populous country. India's relative youthfulness should produce a "demographic dividend": While its 400 million-strong labor force today is only half that of China, by 2025 those figures will reverse as China's population rapidly ages.

India's economic growth may be more sustainable than China's. Domestic consumption accounts for nearly two-thirds of India's GDP but only 42 percent of China's, making India's growth "better balanced" than that of China's export-dependent economy, according to Morgan Stanley's Stephen Roach. India's combination of private-sector dynamism and state incompetence means that "India is rising despite the state," in the words of economist Gurcharan Das. It is "an organic success from below" rather than one directed by government planners, and is therefore "more likely to endure."

Conventional wisdom that Indian democracy constrains economic growth, and is inferior to the ruthless efficiency of China's authoritarian development model, is wrong. India's curse--like China's until quite recently--has been an overweening state that squeezes out private investment and creates massive opportunities for corruption. "India's problem isn't too much democracy, it's too much socialism," says Prannoy Roy, the founder of India's NDTV.

This is rapidly changing as economic reform transforms India's economic landscape, fueling a vast domestic consumer market and providing a launching pad for Indian companies like Infosys, recently listed on the NASDAQ-100. More fundamentally, its democratic political foundation gives India a long-term comparative advantage by rendering less likely the kind of revolutionary unrest that has regularly knocked China's growth off course throughout that country's long history.

Infused with the missionary spirit and the ideology of the Open Door, Americans have long held a fascination with the prospect of changing China in our own image. Yet authoritarian China's rise and growing nationalism raise questions about when and whether China will embrace political liberalism.

India may be a better template against which to judge the appeal of democratic values on Asian soil--and a surer partner in managing security challenges, from Chinese power to global terrorism, whose threat lies in their lack of democratic control. A durable Indo-American partnership of values promises higher dividends than a century of failed attempts to forge an enduring Sino-American alliance in Asia.

The United States is strangely popular in India. Polling regularly shows Indians to be among the most pro-American people anywhere--sometimes registering warmer sentiments towards the United States than Americans themselves do. But this is not so strange: India and America are the world's biggest and oldest democracies. Both are multiethnic, continental empires with strong cultural-religious identities. Each inherited the rule of law from Britain. Indian and American foreign policies appear equally animated by a self-regarding exceptionalism and a habit of moralizing in international affairs.

Both India and America are revisionist powers intent on peacefully recasting the contemporary international order and ensuring themselves a prominent place in it. America's rise to world power in the 19th and 20th centuries is, in some respects, a model for India's own ambitions. As Indian analyst Pratap Bhanu Mehta told the New York Times, Indians have "great admiration for U.S. power" and want their country to "replicate" it, not oppose it. How many of America's European allies share such sentiments?

The CIA has labeled India the key "swing state" in international politics. It predicts that India will emerge by 2015 as the fourth most important power in the international system. Goldman Sachs predicts that, by 2040, the largest economies on earth will be China, the United States, India, and Japan. A strategic partnership of values among the last three, naturally encompassing the European Union, may defy predictions of a coming "Chinese century"--and set a standard of democratic cooperation and prosperity China itself might ultimately embrace on its own path to greatness.