Category Archives: India-US Relations Blog

The Desi Factor in U.S.-India Relations

According to a new Gallup survey, more than two-thirds of the U.S. public has a positive impression of India, a score that even edges out Israel’s traditionally-high favorability rating.  This is the latest indicator of how decisively American perceptions about the country have changed.  Not too long ago, India was regarded as the very epitome of what the term “Third World” meant – decrepit, destitute and pitiable.  Yet in a relatively short period of time, the popular view of India has changed in critical ways.

For many decades most Americans were inclined to the views of President Harry S. Truman, who dismissed India at its birth as an independent state as “pretty jammed with poor people and cows wandering around streets, witch doctors and people sitting on hot coals and bathing in the Ganges.”  His Secretary of State, Dean Acheson, had an even more incisive perspective: “by and large [Indians] and their country give me the creeps.”  When Daniel Patrick Moynihan was U.S. ambassador to India from 1973-75, he regularly lamented that Washington was utterly indifferent to the country’s fate; writing in his diary, he confided that it “is American practice to pay but little attention to India.”  In a cable to the State Department, he complained of dismissive attitudes, “a kind of John Birch Society contempt for the views of raggedly ass people in pajamas on the other side of the world.”

Public opinion kept close track with official attitudes in Washington.  Harold Issacs’s classic 1958 survey of U.S. elite opinion, Scratches on Our Minds, revealed that influential Americans held very negative perceptions of the country, associating it with “filth, dirt and disease,” along with debased religious beliefs.  A State Department analysis prepared in the early 1970s found that U.S. public opinion identified India more than any other nation with such attributes as disease, death and illiteracy, and school textbooks throughout this period regularly portrayed it in a most negative light.  This view was again underscored in a 1983 opinion poll, in which Americans ranked India at the bottom of a list of 22 countries on the basis of perceived importance to U.S. vital interests.

So, what accounts for the significant shift in perceptions?  An obvious part of the answer lies in the dramatic turnabout in Indian prospects launched by the 1991 economic reforms.  For all the attention lavished on China these days, Jim O’Neill, the progenitor of the BRICs acronym, contends that India still “has the largest potential for growth among the BRICs countries this decade.”  A recent Citibank report concludes that India will likely be the world’s largest economic power by 2050 and, according to International Monetary Fund data, India supplanted Japan as Asia’s second-largest economy last year.  President Obama routinely points to Bangalore as a threat to America’s competitive advantage while Lawrence H. Summers, his former chief economics adviser, touts the virtues of the Indian development model.  And the jugaad concept, once seen as a sign of backwardness, is now viewed as an innovative approach to business management.

Another prominent piece of the explanation lies in U.S. admiration for India’s durable democratic traditions.   The concept of democratic India had particular appeal to George W. Bush, who engineered a remarkable transformation in bilateral affairs.  Robert D. Blackwill, who served as Bush’s first ambassador to New Delhi, recalls asking Bush as he geared up his presidential campaign in early 1999 about his special interest in India.  Bush immediately responded, “a billion people in a functioning democracy. Isn’t that something? Isn’t that something?”

But a less obvious, though equally important, factor is also at work: The increasing stature of Indians in American society has changed how all Americans think about India.  Consider the following examples:

  • The election of Bobby Jindal and Nikki Haley to the governorships of Louisiana and South Carolina (respectively), states in the heart of the Old Confederacy.
  • The entertaining television ad Intel ran a few years back lauding the rock star status of Ajay Bhatt, the co-inventor of the USB computer connection.
  • The ubiquitous presence of Sanjay Gupta, CNN’s chief medical correspondent. In 2003, he was named as one of the world’s sexiest men by People magazine and a “pop culture icon” by USA Today. And in 2009 he was mentioned as President Obama’s choice as Surgeon General of the United States, the country’s top public health official.
  • The winner and the two runners-up of last year’s national spelling bee were Indian-American children.  It was the fifth consecutive year, and the tenth time in the last 14 years, that an Indian American won.  The top four positions in the 2012 National Geographic Bee were also Indian-American kids.
  • Last summer witnessed a high-profile Desi clash– the successful prosecution on insider trading charges of Rajat Gupta, McKinsey & Company’s former chief executive and an iconic figure in the Indian diaspora, by Preet Bharara, the U.S. attorney responsible for Wall Street.  Bharara was named last year to TIME magazine’s roster of the world’s 100 most influential people and Bloomberg Market’s “50 Most Influential” list.

Large-scale Indian migration to the United States did not begin until the late 1960s and though the community remains relatively small – less than one percent of the overall U.S. population – it is one of the country’s fastest-growing ethnic groups.  But the community’s growing success has given it an influence and impact wholly disproportionate to its size.  As one analyst puts it, “Indians in America are emerging as the new Jews: disproportionately well-educated, well paid, and increasingly well connected politically.”

According to a recent Pew Research Center report, 70 percent of Indian immigrants to the United States have at least a college degree, compared to the national average of 28 percent, and Indians lead all other Asian sub-groups in income and education levels.  This finding echoes another PRC study that Hindu Americans possess the highest socio-economic accomplishments of any U.S. religious community.

Indians have become a driving force on the U.S. business landscape.  According to a new Kauffman Foundation report, Indian immigrants established one-third of Silicon Valley start-ups in 2006-2012, up from about 7 percent in 2005.  Indeed, Indians founded a markedly greater number of engineering and technology firms than did immigrants from other countries, including those from China and the United Kingdom.  And a RAND Corporation study reports that Indian-American entrepreneurs have business income that is substantially higher than the national average and higher than any other immigrant group.

The success and prosperity of the Indian community has had a real impact on U.S. foreign policy.   First, it has helped change public opinion on India in relatively short order, since it is difficult to dismiss or disparage a country that has produced immigrants who have become so rapidly admired in U.S. society.

Second, the growing impact of the Indian American community catalyzed stronger interest about India on Capitol Hill beginning in the mid-1990s, helping in turn to reverse Washington’s traditional disregard of the country – recall, for instance, how the U.S. ambassador’s post in New Delhi was vacant for the Clinton administration’s first year. Pro-India caucuses in the U.S. Congress played an important role in the lifting of U.S. economic sanctions levied against India in the wake of its 1998 nuclear tests, and in securing the ratification of the landmark U.S.-India civil nuclear agreement a decade later. Today, a third of the members of the U.S. Senate and House of Representatives belong to these caucuses.

Third, the Indian-American community has been at the forefront in building critical societal linkages between its native and adoptive countries. Consider, for example, the dynamics at work more than a decade ago. At the same time as Washington was imposing sanctions in response to the 1998 nuclear tests, concerns about the “Y2K” programming glitch led businesses on both sides to set the foundation for today’s strong technology partnership. The significant role played by these societal bonds leads Fareed Zakaria to compare U.S.-India ties to the special relationships the United States has with Great Britain and Israel. And Shashi Tharoor, formerly India’s minister of state for external affairs, has likewise remarked that “in 20 years I expect the Indo-U.S. relationship to resemble the Israel-U.S. relationship, and for many of the same reasons.”

Although they are often overlooked by national policymakers, non-governmental ties fostered by the Indian-American community will be one key in securing the long-term growth of the new bilateral partnership.  As Shivshankar Menon, now Prime Minister Singh’s national security advisor, remarked a few years back, “[I]f anything, the creativity of [American and Indian] entrepreneurs, engineers and scientists has sometimes exceeded that of our political structures.”

This commentary is cross-posted on Chanakya’s Notebook. I invite you to connect with me via Facebook and Twitter.

Sanjay Puri’s testimony before the House Committee on Foreign Affairs

CONGRESSIONAL TESTIMONY
THE REBALANCE TO ASIA: WHY SOUTH ASIA MATTERS
Testimony by Mr. Sanjay Puri
President and CEO
Alliance for U.S. India Business (AUSIB)
House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
March 13, 2013
Alliance for U.S.-India Business (AUSIB)
Testimony of Sanjay Puri
Founder and Chief Executive Officer
Alliance for U.S.-India Business (AUSIB)
Before the House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
“The Rebalance to Asia: Why South Asia Matters (Part II)
Wednesday, March 13, 2013

Mr. Chairman, Ranking Member, and members of the Subcommittee:

Thank you very much for the opportunity to testify before you today.

From energy security to defense cooperation to bolstering our economic ties and increasing opportunities for high-skilled workers to come to the U.S. or go to India, there are serious obstacles facing the U.S. as we re-rebalance to Asia. However, I believe our mutual interests and shared values can get us where we need to be if the U.S. is committed to deepening the U.S.- India partnership which is one of the most defining of the 21st century.

For purposes of this hearing, I will leave it to others to delve into counterterrorism and intelligence cooperation, military-to-military exchanges and defense trade. My objective is to focus on four broad issues which deserve our consideration.

The four are:
1) Enhanced education collaboration which can change the dynamics of this relationship
2) STEM teacher exchange which can be a game changer for the U.S.
3) The need to allow exports of natural gas to an energy starved India
4) Why we should look beyond New Delhi to different states in India

Enhance Education Collaboration: A Hindu proverb states that you can change a nation through education. I am a firm believer in this proverb and I think it holds a key for changing U.S.-India relations. For all the short-term fixes we might talk about today, I believe education is the long-term solution which is required for the U.S.-India partnership to thrive.
The Alliance for US-India Business (AUSIB) – a not-for-profit trade organization – has been at the forefront of enhancing dialogue between both countries to create opportunities for building higher quality education because we believe that building global partnerships between U.S. and Indian universities will strengthen the bonds between our two nations. Some of the top CEO’s and policy leaders in India today are educated from U.S. Universities. They take with them the knowledge, values and experiences of the United States. They take back the generosity of the American people. This automatically creates economic and cultural bridges between the two countries. It is not a coincidence that Indian companies, led by U.S. educated CEO’s, are much more active in the U.S.-India economic relationship.

Students from India form the second largest group coming to the U.S. for higher education. But demand for higher education in India is also increasing. The Indian Higher Education sector is rising to meet global benchmarks although further efforts are needed to enhance the accessibility, funding and the quality of higher education in the country. India needs at least 500 Universities and 33,000 more colleges in the next 8 years. This alone is a $50 Billion market. India also has a great need for vocational and technical institutes which is another $2 Billion market opportunity.

Where will this additional capacity come from? If it comes from Indian universities partnering with universities and colleges in the States you represent, I believe we will be on our way to making the kind of difference that needs to be made. Through AUSIB EduNext, a higher education initiative which mobilizes organizations and drives tangible results to empower and make educational institutes more capable and future ready for purposes of preserving and promoting the values that India and the U.S. share, we have created a platform for Indian Colleges/Universities to interact and establish long term relationships with visiting U.S. universities. We focus our efforts in the fields of medicine, pharmacy, engineering, business, hotel management, energy, technology and agriculture.

Our results have led to student and faculty exchanges, joint R&D and we have created an online platform that academics on both sides can use to exchange best practices. We have hosted two of the largest U.S.-India education conclaves in 2011 and 2013 which were attended by over 100 education and policy leaders from the U.S. and over 1,000 from India. All three Provosts of Public Institutions in Iowa were represented at the highest level at this year’s conclave besides other Universities.

Governors, Members of Congress from India and the U.S., University Presidents, Provosts, Chancellors, Deans, Department Heads and senior faculty have participated in AUSIB- led delegations and we encourage universities in your district to collaborate with us or the Indian Higher Education sector so that together we can promote the highest standards of education, value systems and governance. All of our conclaves have had a strong corporate participation from the U.S. and India and I believe it is important for Universities to understand what kind of educational capability that companies need and also for companies to form a Public-Private partnership model with the Universities.

Create a STEM teacher exchange program: The second point I would make is regarding STEM education. The United States has a tremendous shortage of STEM teachers at the K-12 level. It is especially very acute in rural, inner city and remote areas. How can we expect our kids to have strong science, math skills when they do not have good teachers? India has a tremendous pool of science and math experts that also speak English. We should consider a specialized short term program that qualifies trains and brings these teachers over to the U.S. for a short duration so that we can create our own pool of STEM experts for the future. AUSIB is currently working with several states to establish a pilot program.

Allow exports of gas to an energy starved India: Currently India competes with China and Japan for buying LNG from Qatar and Australia. Generally it ends up on the short end of the stick as the growing appetite by China has made China much more aggressive. The U.S. only exports Gas to FTA countries and since India is not it needs approval. If the U.S. can find a way to have an economically viable and environmentally clear mechanism to export gas to India it would do three things: increase economic opportunity in the U.S. through exports, reduce India’s energy dependence on the Middle East and thirdly build a more strategic relationship with India given the country’s tremendous need for energy independence.

Look beyond New Delhi outward to various dynamic states in India: As India has entered a period of coalition politics, the states are much more assertive and powerful. The U.S. should build strong economic and cultural ties with these states since they will get away from the policy paralysis that sometimes affects New Delhi. AUSIB just took a delegation to the state of Punjab where the Chief Minister wants to start a Farmer to Farmer exchange with the U.S. since his state is an agriculture state and he wants to learn best practices from U.S. farmers.

There are several dynamic states in India like Maharashtra, Gujarat, Andhra Pradesh, Tamil Naidu that we should engage with. I would like to make a point about the U.S. relationship with the State of Gujarat and especially its democratically elected Chief Minister Narendra Modi. His state is one of the most economically dynamic and has attracted a lot of investments from U.S. companies like Ford and GM. I have participated with other delegates from around the world at one of the premier economic summits in India hosted by the State of Gujarat called Vibrant Gujarat. However, the U.S. Government has boycotted him. While all of us stand for human rights and deplore any violation, the fact remains that after ten years of investigation, India’s Supreme Court has found no evidence against CM Modi regarding the 2002 Gujarat riots and he has been elected democratically thrice, representing more than 60 million constituents. Therefore, in my opinion, it is time for the U.S. to begin the process of engagement with CM Modi.

I thank you for your time and for holding this important hearing, and I look forward to answering your questions.

To download the PDF version of this testimony, click SanjayPuri_testimony.

Check out the video of the testimony here.

India’s foreign policy: A year in review

Guest post by Gateway House

As 2012 draws to a close, it’s imperative to assess India’s foreign policy performance, and look ahead to what we can expect in 2013.

So far, the report is mixed: Four foreign policy hotspots, five sweet spots, and two blind spots. About the same as 2011, when we gave six jeers and five cheers for India’s foreign policy performance.

Geopolitically, 2011 was the year of celebrating the shift of global growth and power to Asia; a year later, 2012 has seen the beginning of pushback on Asia from the U.S., which has seen the confidence of newly elected governments in Japan and South Korea and increased aggression from China as a result of its own domestic power shift.

Internationally, India has been an active participant in the creation of alternate financial instruments and institutions from emerging countries. And so far New Delhi has deftly handled the U.S. pivot to Asia, and maintained bi-partisan support in Washington, while simultaneously balancing its energy imports from Iran.

In contrast, New Delhi has been ham-handed at home. This is the year in which the government has been put on the mat by a strong anti-corruption movement started in 2011, to the current anti-rape movement engulfing the country. An enfeebled centre could hang on, or bring on mid-term elections in 2012 – a distinct possibility after the Bharatiya Janata Party’s win in Gujarat this month. It could change if the ruling Congress government genuinely confronts corruption and addresses law and order issues, continues on its path to economic reform and provides jobs to the 14 million youth who join the workforce every year. They are the boiling cauldron of the under-educated and unemployed young who yearn for political and economic change.

Clearly, our international stature is better than our image at home. We present our top foreign policy Hotspots, Sweet spots and Blind spots for 2012.

Foreign Policy Hot spots

The Maldives: In the wake of the regime change in the Maldives in February, New Delhi may have reacted hastily by recognising the new government led by Mohammed Waheed and bypassing the friendly and more secular former president, Mohamed Nasheed. The increasing fundamentalism and political breakdown that have followed in the Maldives have made India an easy target – most recently highlighted by the GMR-Maldives dispute. But two external factors may also be at play: China’s increasing economic influence in the island-nation and possible Western interest in the old World War II military base in Gan, the southernmost island in the Maldives.

Sri Lanka: Bowing to pressure from both domestic coalition politics and international organisations and allies, India voted against Sri Lanka at the UN Human Rights Council in March; the vote eroded our position of non-interference in the internal affairs of sovereign nations. In September, the bilateral hit a new low, with threats and attacks on Sri Lankan pilgrims and school children travelling in Tamil Nadu. It was exacerbated by the politically opportunistic demands of the Chief Minister of Tamil Nadu, that India must stop training Sri Lankan military personnel. Meanwhile, China raised military aid to more than $100 million and billions in strategic infrastructure for Sri Lanka.

South China Sea: Our Chief of Naval Staff’s statement that India is “prepared” to protect Indian interests in the South China Sea was subsequently watered down. Nevertheless, Beijing reacted sharply, stating that it “opposes any unilateral oil and gas exploration activities in disputed areas in the South China Sea,” despite its own infrastructure-building activities in disputed areas of Pakistan-occupied Jammu and Kashmir. The U.S.’s rebalancing in Asia juxtaposed with recent election outcomes in Japan and South Korea have given New Delhi more strategic space to be firm with China. We must continue our policy of balancing our economic interests in trade and attracting Chinese investment and negotiating our concerns on the border with positioning on Chinese disputes with ASEAN members in the South China Sea and its adversarial posturing towards the U.S.

Syria: India’s Track II diplomacy in Syria was not successful for the people of Syria, who remain caught in the battle between the West and Gulf-funded “rebels” and fundamentalists, and the Bashar al-Assad government. Despite India’s close relations with Damascus and efforts to mediate an acceptable solution at the UN Security Council in July, India voted, along with the West, for stronger sanctions against the Syrian regime, while fellow BRICS nations Russia and China exercised a veto. It is only a matter of time before the exit of Assad, but the sectarian fighting could continue for decades, at great cost to the Syrian people and secularism in the region. The conflict may cause further regional destabilisation, more friction between Israel and Iran, and eventually a rise in the price of oil.

Foreign Policy Sweet spots

India-Myanmar: After 25 years of cautious engagement, India’s policy of not shunning military governments – while simultaneously maintaining support for Myanmar’s democratisation – put us on the right side of history. Successive high-level visits this year resulted in a credit line worth $500 million to Myanmar and various agreements on border issues, energy and infrastructure. India is poised to play a vital role in Myanmar: as a model for democratic institution-building and also with business and development solutions that are affordable and adaptable. In particular, Myanmar can benefit from India’s experience in addressing complex identity issues.

Alternate financial instruments: In March, New Delhi proposed a BRICS Bank and in December the government moved further to promote more SAARC currency swaps. India already has currency swap deals with Japan worth $15 billion and is part of a SAARC deal worth $2 billion. These are positive signs of emerging economies taking the initiative to design alternative financial instruments to mitigate the volatility caused by the financial crises of the U.S. and Europe. Could a viable multilateral option emerge from BRICS? Can bilateral currency swap deals be the building blocks of an alternative financial system?

Afghanistan: India hosted the first ‘Investment Summit on Afghanistan’ in June, probably with the cooperation of Washington, and then participated in the first India-U.S.-Afghanistan trilateral dialogue in September. Indian business is supporting New Delhi’s efforts in Afghanistan, and more than $10 billion is likely to be invested in the Hajigak iron ore mines and various coal, fertiliser and small development projects. New Delhi must now amplify its role on the ground in Afghanistan – through both security and infrastructure cooperation. This, however, entails a dilemma: how can India expand its presence without becoming a target for the Taliban and unfriendly Pakistani entities?

Energy security: So far, India has successfully balanced two fundamental interests: our strategic relationship with the U.S. and our escalating energy requirements. The MT Omvati Prem became the first ship with Indian insurance to load oil from Iran in August, after European Union sanctions came into force in July. With increasing instability in West Asia, we will need more such creativity to maintain the steady flow of oil from the Gulf and we must also look for alternative suppliers in other geographies.

ASEAN: The recently-concluded negotiations of the India-ASEAN Free Trade Agreement in services and investments is a significant step in improving regional connectivity. Over the past two decades, our engagement with ASEAN has intensified and become multifaceted, with a massive increase in trade from $2.9 billion in 1993 to $80 billion in 2012. The region is not only at the centre of our Look East policy, but it is also vital to our efforts to economically and strategically balance China in an Asia that is increasingly important globally.

Foreign Policy Blind Spots

Central Asia: We have not been able to leverage our cordial relations with the Central Asian states to advantageous positions on energy, on membership of the Shanghai Cooperation Organisation (SCO), trade, and tactical cooperation in Afghanistan. We should more actively engage with Central Asia to press our case for membership of the SCO and to expand economic exchanges.

Lost Opportunities for Growth: India’s fiscal problems were highlighted many times in 2012 – in April, for instance, when S&P revised our outlook from stable to “negative” with the threat of an investment rating downgrade to “junk” status within 24 months. India’s growth rate continues to slide and is now 5.3 percent. India is struggling with a falling rupee and a rising oil import burden, along with the budgetary imperative to reduce fuel subsidies. We are condemned to a continuing economic slowdown unless the government confronts corruption more seriously and implements economic reforms.

Looking forward to 2013

What can we expect for 2013? Despite the best efforts of our Prime Minister to keep India-Pakistan relations on an even keel, the critical issues with Pakistan – Jammu & Kashmir, water, terrorism – remain intractable. Don’t hold your breath: nothing will change till Pakistan’s elections in May 2013 and perhaps even our own in 2014. Pakistani Interior Minister Rehman Malik’s disastrous recent visit to India has set back the improvements that had come with New Delhi’s patient diplomacy. Just as we have been able to successfully do with Myanmar and Iran, we should resist American efforts to influence us to make concessions on Pakistan, and handle the relationship according to our own imperatives.

For India-U.S. relations, a visit by Barack Obama, which would be an unprecedented second visit by a serving U.S. president, could propel the strategic bilateral relationship to new heights.

We hope for better times in 2013: an end to the conflict in Syria, more stability in Pakistan, less aggressive posturing by China in Asia and a recovered global – and Indian – economy.

(This article originally appeared at Gateway House and has been republished with their approval. All views mentioned in the article are those of the author and do not reflect the opinions or positions of USINPAC in any manner.)

Power Play

One of the worst consequences of America’s long Presidential election is that the issue of Clean and Renewable Energy Technologies became terribly politicized. An area where America’s two largest political parties should have naturally found common ground to work together, instead became frightfully polarizing owing to a combination of mutual vote-bank politics and bungling. Regardless of who wins next week’s contest, public policy initiatives in cleantech will suffer in the short and medium term from these debacles.

To make matters worse, a wave of high profile failures particularly in the solar and battery technology sector are contributing towards a bearish market sentiment to domestic cleantech investing.

However global trends emphatically indicate an increasing desire particularly in the developing world to move away from hydrocarbon dependence, leaving the door open for American companies with their strong advantage in high-tech R&D to capitalize despite domestic sluggishness.

India is already becoming a hub for cleantech innovation with both extensive economic linkages to both the United States and emerging markets in Asia. Despite its sometimes  glacial bureaucracy, India is coming out all barrels firing on massive development of solar grids, deployment of electric vehicles, and sweeping away its archaic power infrastructure.

Last month India’s government approved a $4B plan to spur both electric vehicle production over the next seven years with a target of putting over six million all electric vehicles on the road. This is in concert with over 3 gigawatts of solar power expected to be installed in India over the next four years. Much of this is expected to come from American companies such as First Solar.

Simply put, all American solar and renewable energy companies, NEED an India strategy. Moreover the American legislature needs to be supportive of companies doing business in India. In this current economic environment the jobs and export income from healthy cross border trade is too precious to be sacrificed for political expediency.

A Rocky Road Ahead

Since the United States has announced its intentions to withdraw its troops from Afghanistan by 2014, leaders in the White House have been looking toward India as an ally in facing the coming strategic and military challenges in the region. For the U.S., the choice of India is an obvious one. Its growing geopolitical presence and commitment to democracy is a strong force among unstable countries, and deep economic ties with Afghanistan (last year, India gave Afghanistan almost $2 billion a year alone in economic and development aid!) all make India a prime candidate to manage postwar reconstruction. Yet what has been heralded as “a full-blown strategic partnership” in shepherding the region’s development is drastically falling short.

On one side is the growing diplomatic tension between the U.S. and India, which has forestalled bilateral commercial trades and sharply highlighted differences in priorities. To be clear, the U.S. and India have dramatically improved their relationship following the Cold War, when the U.S. sided with India’s rival, Pakistan, and India maintained economic and military relations with the Soviet Union. Since then, economic interests were better aligned, as bilateral trade has reached almost $100 billion just last year alone. Still, India is defiantly opposed to complying with U.S. demands if they were to compromise its own economic interests. In Iran, for example, the U.S. has called for sanctions against Iran’s growing nuclear capabilities, and has asked India to cease its commercial transactions with the country. But India views things differently, stating that oil and natural gas purchase from Tehran are vital to its economy. Moreover, Indian diplomats assert that it is “in India’s interest to maintain good ties with Iran, with whom it shares deep historical, cultural and religious connections.” They also believe that purchasing Iranian oil will “strengthen ties with Iran as a hedge against an uncertain future in Afghanistan after the U.S. withdrawal,”, and are thus reluctant to rebuke Iran’s nuclear purchases.

Differences in priorities in China are also a source of contention between Indian and U.S. lawmakers. The U.S. has made strides in containing what it perceives to be a geopolitical threat by China, due to its growing military strength and influence in Asia. Indeed, leaders in Beijing have even suspected that the U.S. is attempting to partner with India in containing China, claims that the U.S. staunchly denies. But India is not interested in upsetting China and has worked very hard in cooperating in areas of mutual interest and opportunity and believes than an alliance with the U.S. will fracture that relationship.

Finally, currency problems in India are hampering its ability to provide stable finances for Afghanistan’s reconstruction. High interest rates have destabilized India’s investment climate, forcing it to focus inward and shrink expenditures.

The future of the U.S.-India relationship will depend heavily on who wins this November. The Democratic Party will likely continue on its current trajectory, gently pushing India to open its markets for investment and to align with the U.S. The Republican Party’s foreign policy is traditionally more aggressive, and will probably reiterate demands for Indian liberalization and compliance with Iran sanctions.