Back to Basics

With the intergovernmental drivers of the US-India partnership now in a period of languor, it is time for the economic relationship to return to the forefront. This is the moment for business leaders in both countries to once again step forward.

As earlier posts have argued, relations between Washington and New Delhi – which not too long ago seemed destined to reach for the stars – are now feeling the heavy tug of gravity. In place of soaring rhetoric and high-profile undertakings, ties between the two capitals are weighed down by bureaucratic inertia and small-bore ideas.

Image back to basicsTwo recent episodes confirm this downward trajectory. The annual US-India economic and financial partnership talks took place this past June in Washington, though few beyond the personal staffs of Treasury Secretary Timothy Geithner and Finance Minister Pranab Mukherjee took any notice. The anodyne communiqué that was issued highlighted the deepening of “institutional relationships” as a major achievement of the talks, but the lack of specific commitments contrasted unfavorably with the detailed work plan that emanated from the US-China economic dialogue occurring just six weeks earlier. Indeed, the Washington-Beijing nexus has a way of upstaging US-India economic exchanges. When Geithner traveled to New Delhi in April 2010, for the launch of the bilateral economic partnership, all of the media attention was focused on whether he would fly off on a spur-of-the-moment trip to China, to engage in talks over the relative value of the yuan. (To nobody’s surprise, he subsequently did end up in Beijing.)  Similarly the US-India Strategic Dialogue that took place six weeks ago in New Delhi was an exercise in modest output and mutual frustration.

Given the serious domestic problems diverting the attention of both capitals, it is difficult to imagine how the government-to-government relationship can be advanced significantly in the next few years.  Nonetheless, the outlook for bilateral affairs is not entirely dim.  One exceedingly bright spot is the accelerating pace of economic engagement.  A decade ago, then-U.S. ambassador to India Robert Blackwill lamented that the volume of bilateral trade was as “flat as a chapati.” But trade levels have risen markedly in the years since.  Indeed, even with the global economy in the doldrums and the torpor in official ties, 2010 was a banner year for the trade relationship, with two-way goods exports surging nearly 30 percent to $48.8 billion. Merchandise exports are also up significantly in the first half of 2011 compared to the same period last year. All told, India is now America’s 12th largest good trading partner and the country constitutes one of the fastest-growing destinations for U.S. exports.

It is true that the economic relationship is very far from achieving critical mass and that US-China trade flows eclipse the US-India figures many times over. Still, the trend lines are quite hopeful and they illuminate the vital role that economic engagement plays in securing the growth of a resilient partnership over the long term.  This last point is persuasively set out in a new book, The Eagle and the Elephant, by Raymond E. Vickery, Jr.  A former U.S. Assistant Secretary of Commerce in the Clinton administration and now a leading figure in the US-India Business Council, Vickery argues that “economic engagement is fundamental to the ability of the United States and India to cooperate politically.” He demonstrates in great detail how over the past decade the private sectors on both sides forged the foundation for the diplomatic rapprochement that eventuated in the path-breaking civilian nuclear accord and an ever-closer security relationship. (Importantly, too, the book illustrates how mismanaged episodes of economic interaction can have far-reaching negative impact, such as the Dabhol debacle in the mid-1990s that continues to impede bilateral cooperation on energy and environmental matters, as well as impairing India’s international credibility as a respecter of contractual rights.)

So how can policymakers in Washington and New Delhi leverage the vitality of the economic relationship in order to re-energize the overall partnership? Two of the usual answers – concluding a broad-based free trade agreement and an investment treaty – are problematic, at least for the next few years. Considering that the two countries are at loggerheads in the Doha Round of multilateral trade negotiations, plus the neuralgic agricultural issues that must be dealt with, the prospects for a comprehensive trade accord are well off in the distance. And although U.S. and Indian policymakers recently agreed to accelerate discussions over an investment treaty, its full value is really contingent upon additional reforms within India – such as liberalizing foreign direct investment in the retail and financial sectors, deregulating labor markets, regularizing the land acquisition process, and dramatically addressing infrastructure bottlenecks. With decision-making in New Delhi all but paralyzed these days, it is anyone’s guess when these key reforms will be enacted.

There are several initiatives that have more promising prospects, however. As spelled out in earlier posts, Washington and New Delhi should aim to build upon their striking record of engagement in the innovation economy sectors by crafting a free trade mechanism relevant to advanced technology products and drafting an immigration accord that allows high-skilled Indian professionals to work in the United States. Both undertakings would capitalize on important economic complementaries and would build up economic capacities that are so significant to the long-term prospects of both countries.

Continuing to think outside the box, negotiators also might explore whether India would be willing to address manifold U.S. concerns about its regime for protecting intellectual property in exchange for a totalization agreement covering Indian technology workers posted to the United States on temporary assignments (as Derek Scissors suggests, or for the special restoration of trade privileges (amounting to $3.5 billion in value in 2010) that expired when the U.S. Congress failed to reauthorize the Generalized System of Preferences at the end of last year.

Finally, taking page from its successful campaign several years ago to bring India into global nonproliferation institutions, the United States should use the upcoming APEC Summit, which takes place this November in Honolulu, to lobby for New Delhi’s admission into the group.  Given that India is poised to become one of the world’s top economies in the coming years, its absence is a serious lacuna for the organization.  (My next post will deal with this issue in greater detail.)

With the intergovernmental drivers of the US-India partnership now in a period of languor, it is time for the economic relationship to return to the forefront.  This is the moment for business leaders in both countries to once again step forward.

Building Trust in South Asia through Cooperative Retirement of Obsolescent Missiles

(Mr. Feroz Khan also contributed to the piece.)

Nuclear deterrence is growing roots in South Asia. India and Pakistan have both incorporated nuclear capabilities into their defence planning. Both are guided by a philosophy of minimum credible deterrence, although within this context modest growth is expected to achieve desired force postures. It is natural that asymmetries exist in the forces held by India and Pakistan. These will persist along with different perceptions of strategy and tactics. Despite these differences, we believe India and Pakistan have both reached a point where they should share perceptions about deterrence and nuclear stability in the region.

indiapakThe time is right for India and Pakistan to expand shared understandings through cooperative exchanges of information about their respective deterrence postures. Such understanding could be critical in a crisis. Both India and Pakistan have mutually resolved to enhance strategic stability in our region, as affirmed in the Lahore Memorandum of Understanding (MoU) in February 1999.  One possibility for furthering this goal is to consider retiring their oldest, first generation, nuclear capable, short-range ballistic missiles (SRBMs), which are at the end of their natural lifespan. Pakistan’s HATF 1 & 2 and India’s Prithvi 1 & 2 have served their purpose and will be eventually retired unilaterally according to each nation’s normal decommissioning process.  We propose a plan of mutual transparency measures that would share information about the retirement of these missiles on a reciprocal, bilateral basis — without impinging on the continuing modernisation of both sides’ strategic forces. The retirement of other nuclear capable, obsolescent ballistic missiles can then follow in the same cooperative spirit.

We have participated in an in-depth study and also recently in a mock exercise to explore how information exchanges between our two countries could be conducted. We are confident that such an exchange could be achieved with minimal risk and costs and yet provide important reassurance about significant changes in deterrence postures.

The Foreign Ministers of India and Pakistan have recently reaffirmed their commitment to pursue confidence building measures (CBM) in connection with their ongoing Composite Dialogue. A working group on peace and security matters is charged with exploring CBMs in the security area. One candidate CBM would be to conduct a Joint Transparency Exercise (JTE) to exchange information about retired missiles. With the voluntary retirement of these obsolescent missiles already imminent, New Delhi and Islamabad could make a virtue of a necessity by adding reciprocal transparency to the retirement process. Our studies show such a joint CBM is ripe for consideration and could be conducted in the near term. A first step might be to declare these nuclear capable missiles to be non-nuclear delivery systems. Then, as these missiles are removed from the nuclear arsenal, our two countries can build trust and understanding as our respective experts expand cooperation in the drawdown of obsolete forces.

This is a small step. It has been endorsed by several prestigious expert groups. We have studied the practical details of how such ideas could be implemented. We concluded that such exchanges could be powerful tools in enhancing mutual confidence and signal maturity as responsible nuclear powers. The costs and risks for India and Pakistan are small, but the potential benefits are great. It is a step whose time has come.

(Feroz Khan and Gurmeet Kanwal, both retired Brigadiers, are with the Naval Postgraduate School, Monterey, CA, USA, and the Centre for Land Warfare Studies, New Delhi, respectively. Views are personal.)

Indians and Illegal Immigration

The vast majority of Indians come to the United States legally and stay here as legal visa holders. Many become permanent residents (green card holders) and then U.S. citizens. Indeed, in terms of income and education, it would be difficult to find a more successful immigrant group in U.S. history.

There are also Indians in the United States illegally. Such individuals remain a small part of the overall illegal immigrant population. Still, it is a segment worth exploring to help us better understand the immigration issue.

According to the US Department of Homeland Security (DHS), Indians made up only 1.9 percent of the illegal immigrant population in the United States as of January 2010. (Here is a link to that report.) There were approximately 200,000 Indians not in legal status in the U.S. out of a total illegal immigrant population of 10,790,000, according to a DHS report released in February 2011.

Table 1

Illegal Immigrant Population by Country (2010)

Country of Birth Estimated Unauthorized Immigrant Population (2010)
Mexico 6,640,000
El Salvador 620,000
Guatemala 520,000
Honduras 330,000
Philippines 280,000
India 200,000
Ecuador 180,000
Brazil 180,000
Korea 170,000
China 130,000
All Countries 10,790,000

                                               Source: Department of Homeland Security.

A Country by Country Look

One can see by examining Table 1 that Mexico dominates the overall illegal immigration population in the United States, representing over 60 percent, with 6.6 million. The next three countries have far smaller numbers of illegal immigrants in America: El Salvador with 620,000, Guatemala with 520,000 and Honduras with 330,000. These figures are as of January 2010, which means it’s possible newer data could yield slightly different results.

The Philippines has the fifth most illegal immigrants with 280,000, followed by India in 6th place with 200,000. Illegal immigrants from the Philippines and India largely come to the United States legally on visas and then overstay their visas. Unlike Mexicans, Indians cannot simply cross a border and find themselves in the United States. While it is possible some may have gone to Canada or Mexico and entered America illegally, it is more likely Indian illegal immigrants were once in some type of legal status and lost that status.

Changes in Indian Unauthorized Immigrant Population Over Time

In 1990, Indians made up an estimated 0.8 percent of the unauthorized immigrant population, with only 28,000 illegal immigrants, according to the then Immigration and Naturalization Service (INS). It’s possible the 28,000 figure is a low estimate of the number of illegal immigrants from India in 1990. That is because an initial INS estimate of the number of Indians in the country illegally in the year 2000 was only 70,000. However, a few years later that figure was revised to 120,000.

Measuring the number of illegal immigrants in the United States is, by definition, not easy. It is even harder to make accurate estimates of smaller subsets of that population. Table 2 shows the overall number of Indians in the United States in the “unauthorized immigrant population” – the term used by the Department of Homeland Security – in 1990, 2000 and 2010. The numbers indicate the Indian population not in legal status has risen from 28,000 in 1990 to 200,000 in 2000.

Table 2

                                         Indian Unauthorized Immigrant Population: 1990 to 2010

Year Indian Percentage of Total
1990 28,000 0.8 percent
2000 120,000 1.4 percent
2010 200,000 1.9 percent

                   Source: Department of Homeland Security, Immigration and Naturalization Service.

Illegal Immigration Issue Remains Important

Whether someone is waiting for a green card or is an employer of immigrants, it would do well to remember that illegal immigration remains important in the American public’s mind. It drives the overall debate on immigration. In past years, disagreement on whether or not to provide legal status to the illegal immigrant population scuttled attempts to provide more green cards for high-skilled immigrants, including many Indians. The issue of illegal immigration is not going away.

New Obama Administration Policy on Deportations could help some Indian Immigrants

Indian immigrants are less likely to be here illegally than other immigrants. Despite this, some Indians in the United States or their friends and family members may benefit from the Obama Administration’s newly announced policy on deportations. There are approximately 200,000 individuals from India now residing in the United States without legal status, according to the Department of Homeland Security.

The new policy came in response to criticism, largely in the Hispanic community, that many individuals were being placed in deportation when encountered after traffic stops or after committing minor violations. In many cases, police or federal authorities became aware of these people under the “Secure Communities” initiative. On the Immigration and Customs Enforcement (ICE) website, Secured Communities is described as follows: “It uses an already-existing federal information-sharing partnership between ICE and the Federal Bureau of Investigation (FBI) that helps to identify criminal aliens without imposing new or additional requirements on state and local law enforcement.”

Controversy has swirled as the initiative appeared to sweep up many people beyond the initially stated intention of the policy to focus on getting off the streets illegal immigrants who pose a danger to others. In response to this criticism, in June 2011, John Morton, the Director of Immigration and Customs Enforcement (ICE), released a memo that informed personnel in the field who they should prioritize in pursuing deportation. Still, despite the memo, stories of individuals with sympathetic stories being placed in deportation proceedings under the initiative began to dominate the Spanish language press in the United States.

In an August 18, 2011 letter to Senator Richard Durbin (D-IL) and other members of Congress, the Obama Administration described the new policy: “Under the new process, a Department of Homeland Security (DHS) and Department of Justice (DOJ) working group will develop specific criteria to identify low-priority removal cases that should be considered for prosecutorial discretion.  These criteria will be based on ‘positive factors’ from the Morton Memo, which include individuals present in the U.S. since childhood (like DREAM Act students), minors, the elderly, pregnant and nursing women, victims of serious crimes, veterans and members of the armed services, and individuals with serious disabilities or health problems.” (Senator Durbin’s website provides more details.)

What does this all mean?
How does this review of pending deportation cases affect people in the country illegally or those with family members here out of status? Whether from India or Mexico, anyone in the country illegally should not view the policy as an amnesty. There is nowhere to apply. However, those placed in deportation proceedings whose cases are not pursued may be able to receive work authorization.

“The announcement should mean the end of the deportation process for a large number of individuals,” according to immigration attorney Greg Siskind. “Individuals whose deportation proceedings are closed are not going to receive a visa, green card or any new type of legal status. Some may be eligible for work authorization, however, but even being granted such documentation will not be the same as having a legal status in the U.S.”

This is an important distinction: being allowed to work is not the same as possessing a permanent right to live in the United States, which would normally come from receiving a green card. Individuals likely will not be able to travel freely even if they receive work authorization under the policy. “The new policy will not remove barriers to green card processing such as being subject to the three and ten year bars on reentering the U.S. as well as bars on adjusting status for individuals who entered the country without inspection,” notes Siskind. Upon attempting re-entry an individual might not be allowed back into the United States.

Every immigration case is unique. Those with friends or family members who may benefit under this policy should be wary of anyone promising they will be able to secure someone a green card because of the new procedures. The new policy is designed as temporary relief and a response to a political outcry over a possible misapplication of enforcement resources. It is not an amnesty, nor should it be considered one. Most important, this is a discretionary change in policy and, as such, can be changed again in the future.

Capacity Building for Future Conflict

In view of India’s unresolved territorial disputes with China and Pakistan in the mountainous Himalayan region, there is a very high probability that the next major land conflict on the Indian sub-continent will again break out in the mountains and, in order to avoid the possibility of escalation to nuclear exchanges, the conflict will in all probability remain confined to mountainous terrain.

A strategic defensive posture runs the risk of losing some territory to the adversary if capabilities do not exist to be able to launch a deep ingress to stabilise the situation. India’s must upgrade its military strategy of dissuasion against China to that of genuine conventional and nuclear deterrence that can come only from the ability to take the fight deep into the adversary’s territory through the launching of major offensive operations. To achieve this objective, it is necessary to raise and position one mountain Strike Corps each in Jammu and Kashmir for offensive operations against China and Pakistan and in the northeast for operations against China. In addition, other defensive corps must be given limited capability to launch offensive operations with integral resources.

Manoeuvre is extremely limited in the mountains due to the restrictions imposed by the terrain. In the plains too India’s Strike Corps cannot execute deep manoeuvres due to the risk of Pakistan’s nuclear red lines being threatened early during a campaign. As firepower is the other side of the coin, it is necessary to substantially upgrade capabilities of the armed forces to inflict punishment and indeed achieve victory through the orchestration of overwhelming firepower, or else India will have to be content with a strategic stalemate.

These capabilities include conventionally-armed SRBMs to attack high value targets in depth. Air-to-ground and helicopter-to-ground attack capabilities need to be modernised, particularly those enabling deep ground penetration and accurate night strikes. In fact, the Indian Air Force should aim to dominate the air space and ground strikes must paralyse the adversary’s ability to conduct cohesive ground operations. Artillery rockets, guns and mortars must also be modernised. Lighter and more mobile equipment is required so that these can be rapidly moved and deployed in neighbouring sectors.

India’s holdings of precision-guided munitions (PGMs) continue to be low. In recent conflicts like the war in Iraq in 2003 and the ongoing Afghan conflict, PGMs have formed almost 80 per cent of the total ammunition used. Indian PGM holdings must go up progressively to at least 20 to 30 per cent in order to achieve high levels of operational efficiencies. India’s defence planners must recognise that it is firepower asymmetries that will help to achieve military decisions and ultimately break the adversary’s will to fight.

Capabilities for heliborne assault, vertical envelopment and amphibious operations are inadequate for both conventional conflict and dealing effectively with contingencies that might arise while discharging India’s emerging regional responsibilities. Two rapid reaction-cum-air assault divisions (with an amphibious brigade each) need to be raised by the end of the 13th Defence Plan, i.e. by 2017-22. The expenditure on these divisions will be highly capital intensive and will be subject to the defence budget being gradually raised to first 2.5 per cent and then 3.0 per cent of India’s GDP.

C4I2SR capabilities are still rudimentary in nature and must be substantially modernised to exploit the synergies that can be achieved by a network centric force. A seamless intelligence-cum-targeting network must be established to fully synergise the strike capabilities of air and ground forces in real time. A good early warning network will enable the army to reduce the number of troops that are permanently deployed for border management and will add to the reserves available for offensive operations. Infrastructural developments along the northern borders have failed to keep pace with the army’s ability to fight forward and must be speeded up.