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Afghanistan is Key to India’s Iranian Connection

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Washington grumbles about the Indian relationship with Iran, but the U.S. withdrawal from Afghanistan leaves New Delhi little choice

The striking juxtaposition this week in New Delhi is a nice illustration of how Tehran has become a complicating factor in U.S.-India relations.  Secretary of State Hillary Rodham Clinton was in town to exhort Prime Minister Manmohan Singh’s government to do more on curtailing imports of Iranian oil.  All the while, a large Iranian trade delegation was a few miles away striking deals for the provision of agricultural commodities that Tehran is finding harder to purchase.

On the surface, the awkward tableau was reminiscent of the situation three months earlier when the Obama administration moved to enforce new U.S. sanctions aimed at shutting down the Iranian petroleum sector as a means of pressuring the Islamic Republic to abandon its nuclear weapons program.  At the time, reports emerged that India had overtaken China as Iran’s largest oil customer and that a new rupee payments system and barter trade arrangement were being set up for the purpose of circumventing the sanctions regime.  Adding to the perception of New Delhi’s defiance was the announcement that an Indian trade mission would visit Iran to scope out commercial opportunities created by the U.S. and European Union sanctions.  Even if the Americans and Europeans wished to shun business with Tehran, Commerce Secretary Rahul Khullar was quoted as saying, “tell me why I should follow suit? Why shouldn’t I take up that business opportunity?”

These actions caused the Wall Street Journal to editorialize about “Iran’s Indian enablers” who were “turning about to be the mullahs’ last best friend.”  Nicholas Burns, who during the George W. Bush administration did yeoman’s work in bringing about the new era in bilateral affairs, issued a cri de couer:

This is bitterly disappointing news for those of us who have championed a closer relationship with India.  And it represents a real setback in the attempt by the last three American presidents to establish a close and strategic partnership with successive Indian governments.

Others pointed to New Delhi’s actions as evidence that Washington’s efforts to forge a strategic partnership with India were naïve and foolish.

But things have changed over the last few months.  While New Delhi continues to protest publicly the unilateral character of U.S. sanctions, it has quietly taken steps to accommodate U.S. concerns.  According to media reports, the Indian government has instructed domestic refineries to reduce imports of Iranian oil by 15 percent.  As a result, Baghdad has replaced Tehran as the country’s second largest crude oil supplier and Iranian oil now constitutes nine percent of India’s import profile as opposed to 12 percent last year.  Imports of Iranian crude declined by a third in April compared to March’s figures.  And the state-run Indian Oil Corporation, the country’s largest refiner, did not purchase any Iranian crude last month, down from 75,000 barrels per day in March.

During her trip, Mrs. Clinton publicly commended these efforts but also insisted that “India’s role in the international community” obliges it to go further.  To continue pressing this point, Washington is dispatching a special envoy next week to New Delhi.  This visit is significant since the Obama administration will soon begin rolling out punitive measures against foreign entities that have not lived up to Washington’s expectations.  It earlier granted passes to Japan and EU nations but pointedly left out such countries as India, China, Turkey and South Korea.

There is some speculation that India is in danger of being sanctioned for its continued oil transactions with Iran.  But a better bet is that this will not happen.  The rupee-based payment mechanism that India has fashioned to buy Iranian oil is certainly problematic from Washington’s perspective, though it is something U.S. officials can tolerate since it does not entail the exchange of major convertible currencies like the U.S. dollar or the euro.

Moreover, the third round of the U.S.-India Strategic Dialogue is taking place next month and Washington will not want the sanctions issue to derail the momentum coming out of the talks.  Indeed, according to sources quoted in the Indian media, the matter was not a major agenda item in Clinton’s discussions with Foreign Minister S.M. Krishna:

“Both sides referred to it obliquely, but Clinton didn’t even push it.  In fact, she seemed much more keen to talk about possible deliverables that could be achieved when the two ministers meet again for the bilateral strategic dialogue in mid-June.”

In his joint press conference with Clinton, Mr. Krishna once again pleaded that the country’s burgeoning energy security needs – it imports 75 percent of its petroleum requirements – limit how quickly it can break its oil links with Tehran.  Washington urges India to get more of its supplies from Saudi Arabia, which has happened to an extent though New Delhi remains wary of Riyadh given its close friendship with Islamabad.

But there is another factor at work here than just the geopolitics of oil, one that seems not to have been squarely acknowledged during the Clinton visit: A significant reason for New Delhi’s continuing desire to engage Tehran resides in the adverse effect on Indian security concerns caused by U.S. withdrawal from Afghanistan.

With domestic politics largely driving U.S. strategy, key differences are bound to emerge between the United States and India regarding the political endgame that is now unfolding.  Looking toward the exits, Washington will not be overly concerned with the exact details of the country’s future or the viability of the government in Kabul it leaves behind.  In contrast, New Delhi, which has invested heavily in Hamid Karzai’s government, has strong security interests in ensuring that any regime in Kabul is capable enough to be a bulwark against Pakistan as well as a gateway to trade links and energy resources in Central Asia.

India has traditionally relied upon Iran, whose interests in Afghanistan are roughly congruent, to help accomplish these goals.  After the fall of the Taliban regime, New Delhi played a key role in building a transportation corridor from the port of Chabahar in southeastern Iran into Afghanistan.  Late last year, it announced plans to expand this link by constructing a 900-kilometer rail line to Bamiyan province in Afghanistan, where an Indian consortium has won mineral development rights.

Indeed, New Delhi and Tehran may go so far as to revive their cooperation during the 1990s that provided critical support to the non-Pashtun militias battling the Taliban regime.  (Already reports are surfacing that the old Northern Alliance may be reconstituting itself.)  The Americans will surely grumble about the cozying up with Iran, but the geopolitical logic of the Obama withdrawal leaves New Delhi little choice.

India has for some time now telegraphed how the Afghanistan factor looms over its relations with Iran.  Speaking in mid-2010, at a time of renewed U.S. pressure on New Delhi’s bonds with Tehran, Indian Foreign Secretary Nirupama Rao (who now serves as New Delhi’s ambassador in Washington) gave a noteworthy address on the relationship.  She highlighted the “unique” civilizational ties and “the instinctive feeling of goodwill” between the two countries.  She spoke of how links with Tehran are a “fundamental component” of Indian foreign policy and how there has been a recent “convergence of views” on important policy issues.  Regarding bilateral cooperation on Afghanistan, she argued that New Delhi and Tehran “are of the region and will belong here forever, even as outsiders [read the Americans] come and go.”

Reinforcing this message, a senior Indian official was quoted in the press at the same time as saying that efforts to tighten relations with Iran were a policy “recalibration” caused by the “scenario unfolding in Afghanistan and India’s determination to secure its national interests.”

The tussle over Iranian sanctions is a harbinger of bigger challenges ahead for U.S.-India relations.  One of the key foreign policy conundrums the Obama administration faces is how to reconcile its approach on Afghanistan, which has the effect of aggravating ties with New Delhi, with its recently-unveiled strategic “pivot” toward Asia, the success of which hinges in important measure on a strengthening of the security partnership with India.  The interplay of two conflicting dynamics in bilateral affairs – growing strategic cooperation in East Asia and unfolding differences over the future of Afghanistan – will be a key factor to watch for in the years ahead.

This commentary was originally posted on Chanakya’s Notebook.  I invite you to follow me on Twitter.

India-US Relations Blog

An Immigration Deal with India

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An agreement not only makes sound economic sense, but would also strengthen the foundation of U.S.-India relations.

From the maelstrom of legislative gridlock that is Washington, at least one ray of bipartisan comity has emerged. In a nearly unanimous vote, the House of Representatives has passed a bill to allow more skilled immigrants from India and China to become legal permanent residents. At a time of rising protectionist sentiments, the move is important recognition that U.S. economic vitality requires greater access to the global pool of human capital.

The bill is now being considered by the Senate. Its arrival is particularly timely. The United States has been able to maintain its global preeminence in no small part due to the influx of foreign science and engineering professionals and students. High-skilled immigrants are a significant driving force of American prosperity and innovation, most famously in Silicon Valley. Research indicates, for instance, that Indian immigrant entrepreneurs play a leading role in founding some of the most dynamic high-tech companies.

America’s dependence on foreign-born technology professionals will shortly become all the greater. Since younger native-born workers tend to lack the skill levels of their baby boomer parents now nearing retirement age, the United States could face broad and substantial skill shortages in the coming decade.

But U.S. policymakers should go one step better by signing a bilateral agreement with New Delhi guaranteeing a set number of temporary work visas for high-skill Indian professionals. The U.S. has crafted similar agreements with a select number of other countries, including the TN temporary visa program (created via the North American Free Trade Agreement) that exempts qualified Canadian and Mexican professionals from the annual quota on H-1B work permits.

With India a major source of high-skill professionals and the U.S. needing to draw on foreign talent to fortify its own science and engineering workforce, both countries have a keen mutual interest in cooperating in the area of human capital, the most critical resource in the dawning global innovation economy.

Admittedly, important constituencies in both countries regard the global talent pool as a zero-sum proposition. In the United States, some argue that increased mobility of foreign high-skill workers will displace or depress wages of native professionals. The empirical evidence, however, suggests that greater numbers of talented immigrants actually supports job creation in the United States.

India likewise would stand to benefit from the increased mobility of its technology professionals. Instead of causing “brain drain,” the global innovation economy is actually generating “brain circulation” or a “brain chain,” in which expatriate talent returns home with acquired capital, skills and knowledge, as well as personal links to transnational entrepreneurial and technological networks. Obviously, some of the high-skill Indians who benefit from the bilateral immigration accord will choose to remain permanently in the United States, though they would in time contribute a significant stream of remittance income and serve an important bridging function between Indian innovators and entrepreneurs and those in other countries. But others, empowered by new ideas and experiences, will return in time and play a direct role in the nation’s development.

The United States and India are prime constituents in the brain circulation process. Far from seeing access to the global talent pool as a zero-sum proposition, the interdependency of their skills base requires them to act in a cooperative way. Doing so not only makes sound economic sense, but would also strengthen the foundation of U.S.-India relations.

India-US Relations Blog

Pivot Problems

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The interplay of two conflicting dynamics in U.S.-India relations – growing strategic cooperation in East Asia and unfolding differences overAfghanistan– will be a key factor to watch for in 2012.

 

The Obama administration of late has trumpeted a strategic “pivot” toward Asia that is geared toward sustaining U.S. regional leadership amid China’s ascendance. This shift was a central theme in the president’s trip to East Asia last month, when it received a warm welcome by almost all of the region’s capitals. The idea is that disengagement from debilitating military conflicts in the Greater Middle East (Iraq and Afghanistan) will enable Washington to focus urgently-needed policy attention on a part of the world that will be the center stage of the 21st century. Thomas E. Donilon, President Obama’s national security advisor, contends that “by elevating this dynamic region to one of our top strategic priorities, Obama is showing his determination not to let our ship of state be pushed off course by prevailing crises.”

But translating this strategic shift from the drawing board to the real world may prove difficult, particularly as it relates to India. An emphasis on shoring up the U.S. role in an evolving Asia will necessarily entail a deepening of relations between Washington and New Delhi. But events over the last few months offer mixed signals on this front. Geopolitical cooperation in East Asia is indeed on the upswing. Yet America’s quickening withdrawal from Afghanistan also will increase bilateral frictions, thus pushing relations in the opposite direction.

With domestic politics largely driving U.S. strategy on Afghanistan, key differences are bound to emerge between the United States and India regarding the endgame. Looking toward the exits, Washington will not be overly concerned with the exact details of a political solution with the Taliban, while New Delhi will be all too focused on how the strategic terrain in its neighborhood is shifting to its detriment. This gap in interests explains why, according to one informed analysis, “few tears are being shed in the top levels of the Indian establishment over the state of ties with the US.”

India has strong security interests in ensuring that any government in Kabul is capable enough to be a bulwark against Pakistan as well as a gateway to trade and energy links in Central Asia. Both goals would be undermined if Islamabad achieved a central role in shaping a political settlement or if a Taliban-dominated regime were to come to power.

Yet over the last several months, Washington has granted Pakistan a principal role in the Afghan negotiations. In an effort to repair the strains caused by the raid on Abbottabad, Donilon met with Pakistan’s army chief, General Ashfaq Parvez Kayani, in Abu Dhabi in early October, to begin to flesh out a deal: Islamabad would have a seat at the table where Afghanistan’s future is decided in exchange for delivering the Taliban and the Haqqani network to the talks. Two weeks later, Secretary of State Hillary Rodham Clinton, together with newly-appointed CIA director David Petraeus and chairman of the Joint Chiefs of Staff Martin Dempsey, arrived in Islamabad to finalize the bargain.

Negotiations with the Taliban have also reached a critical stage. According to reports, Washington did indeed reach a preliminary accord with the Taliban last month that U.S. officials hoped to unveil at the December 5th international conference on Afghanistan in Bonn until Hamid Karzai, Afghanistan’s president, torpedoed it at the last minute. Contacts with the Taliban are expected to restart early in the new year, and Obama administration officials may hope to announce a breakthrough at the May 2012 NATO summit in Chicago.

There is no love lost between the Obama administration and the Karzai government that New Delhi has invested so much in over the past decade. Given the focus of U.S. diplomacy, one wonders how committed Washington will be to the current regime’s survival or the protection of Indian equities in an accommodation with the Taliban. The security situation also is likely to deteriorate over the coming year as the military withdrawals that President Obama announced last summer take hold and as remaining U.S. forces shift from direct combat operations to a back-stop role. A newly-minted National Intelligence Estimate reportedly is filled with pessimism about Afghanistan’s prospects.

Mr. Obama has promised to help Afghanistan “move from an economy shaped by war to one that can sustain a lasting peace.” Yet new reports by the World Bank and the International Monetary Fund underscore just how formidable, even impossible, challenge that will be. And a recent report by Senate Foreign Relations Committee staffers concluded that U.S. nation-building efforts have largely failed and warned that with Afghanistan so reliant upon foreign military and development spending it could slide into an economic depression as this funding decreases.

The fallout from the Salala incident last month appears to be a transformation of U.S.-Pakistan relations, from the past decade’s broad if epically dysfunctional security partnership to a more circumscribed, largely transactional arrangement. The upshot for New Delhi is variable. Islamabad will be even more stinting in deploying its influence with the Taliban and other militant groups to benefit U.S. objectives in Afghanistan, while Washington will become less concerned about Pakistani sensitivities there. But the much greater restrictions on the preferred U.S. strategy of drone warfare against militant targets in Pakistan’s tribal areas, as well as higher transit fees on U.S. military supplies moving through Pakistan, will further dampen the Obama administration’s fortitude in Afghanistan. This is all the more as the White House enters a bruising re-election campaign in which the president is keen to demonstrate his focus on domestic policy challenges.

The interplay of two conflicting dynamics in U.S.-India relations – growing strategic cooperation in East Asia and unfolding differences over Afghanistan – will be a key factor to watch for in 2012.

India-US Relations Blog

Is Nancy Powell the right choice for India?

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Although fluent in honeyed words, in substance, the Obama administration is proving to be a disappointment for India. None of the promises of the George Bush years has been realized: neither hi-technology cooperation nor an effort to ensure that the Indian military be given access to sufficient equipment in order to maintain parity with an expanding PLA.

Now, the choice of a career foreign service officer, Nancy Powell, as the new U.S. ambassador to India underscores the fact that President Obama has left U.S.-India relations with the Secretary of State Hillary Clinton, while he focuses on the far more consequential relationship between China and the U.S.

In Beijing, Gary Locke (a former Cabinet-level official known for his antipathy towards Delhi and sympathy for Beijing) has a direct channel of communication with the White House, unlike Powell, who on occasion may find it difficult even to reach Hillary Clinton, given her relatively modest status in the ranks of power players in Washington.

During Powell’s stint in Islamabad, the soft-spoken envoy became very close to President Pervez Musharraf and her “See-No-Evil” reporting ensured that the Bush administration saw both Musharraf and the Pakistan military as reliable assets of the U.S. in the region. She believed that the Pakistan army could be relied on to faithfully implement the policies cooked up in the Departments of State and Defense, and raised very few red flags. So complete was her trust in the suave commando whom she clearly admired, the coup-leader who became the President of Pakistan.

It is no secret that decision-makers on the South Block (location of the Ministries of Defense and External Affairs and the Prime Minister’s Office) share with the North Block (the Home Ministry) a deep distrust of the Pakistan military, especially the army. Administrations in India have not seen any improvement in the ground situation, where irregular elements continue to infiltrate the Line of Control in Kashmir, besides entering India via road from Bangladesh and Nepal. During her period in Islamabad, Powell almost totally ignored such ISI activities against India, concentrating on the situation in Afghanistan and satisfying herself (after briefings from President Musharraf) that Pakistan was fully on board as a major non-NATO ally of the U.S. Doubts about such an assessment began only long after she left her post in Pakistan’s capital. After that, she moved on to Nepal, at a time when the Maoist groups were gaining in strength, thanks to the short-sighted policy of the former monarch in clandestinely backing them against democratic forces in Nepal, whom King Gyanendra regarded as a bigger threat than the Maoists.

Although in the course of her career in the State Department, Powell has had the distinction of being ambassador to both Ghana and Uganda. Her preferred region of interest has remained South Asia, where she evolved a distinctly Pakistan army-centric view of the overall situation. Not surprisingly, her appointment as envoy to India has been welcomed by U.S. experts such as Steven Cohen, Michael Krepon, and Teresita Schaffer. All three of them have vigorously praised the Pakistan army in the past, including the military’s quest for a resolution of the Kashmir issue on lines favorable to itself. In an op-ed in a newspaper in India, Shaffer has called Hillary Clinton’s choice “admirable”. No doubt President Musharraf too would agree, given his close personal friendship with the diplomat. Certainly, he will be ready to proffer her advice on how she should go about her task, something that he is known to do whenever he visits Washington.

Although some within the strategic community in India have delusions of grandeur about the role played by Delhi in the Obama calculus; the Powell appointment has once again shown up the differential treatment between approaches towards China and India. While the first country is a personal priority of President Obama, such that he closely monitors policy to that emerging superpower, in the case of India, Obama confines himself to mere words. The actual policy is left to Hillary Clinton who seems to regard Europe (and in particular the U.K. and now France) as not merely experts on India, but as useful interlocutors. While the expertise of the Secretary of State is most pronounced in the matter of specialty restaurants at the Maurya Sheraton hotel in Delhi (her favored haunt while visiting the country), she has very definite views on India’s role. It is that Delhi needs to behave in the manner that the U.S. and the EU decide is proper for it and forget about seeking parity with China. In that sense, the Powell appointment illustrates the much lower position of India in the strategic calculus of the Obama administration, as compared to China which has always had high-powered envoys, beginning with George H W Bush.

Nancy Powell knows the Pakistan military well and she has kept up her contacts with top generals in India’s western neighbor. However, she has cultivated far fewer links with the Indian establishment, except at the formal level. While key elements of the strategic community in India would like the Obama administration to give up its Euro-centric view of India (as a country that needs to be guided and led by the hand, in the manner of a frisky adolescent), such a development seems remote under Powell’s watch. She has been steeped in the State-Defense culture of seeing India near-exclusively from the prism of India-Pakistan relations and can be expected to follow Hillary Clinton’s instincts and insert herself into the subject almost from the day she assumes office in Delhi from Peter Burleigh, the acting envoy, who too shares with Nancy Powell close ties with the U.S. intelligence community and is a distinguished professor at the University of Miami, which has one of the best International Relations programs in the U.S.

It is no secret that the road map of the Indian-strategic community in Afghanistan and Kashmir is very different from that of the Pakistan army. Seeking to bridge this gap has been a task that Powell’s admirers in the U.S. academic community have been trying for decades to accomplish. In the final year of his present term in office, President Obama’s most urgent priority seems to be an orderly retreat from Afghanistan. Powell is among those who have long regarded it possible to enlist the Pakistan army in such a mission, if only India were to make enough concessions. Her task in Delhi may be to follow the example of another Clintonite envoy, Frank Wisner, who spent much of his tenure seeking to persuade India to make concessions on Kashmir.

Although there will be the obligatory cheers of welcome for the Powell appointment, deeper than the manufactured headlines and the anodyne statements, there is resentment that President Obama has distanced himself from the longstanding U.S. policy of sending distinguished Thought Leaders to India, rather than career diplomats such as Frank Wisner and Nancy Powell. The omens for a true India-U.S. alliance remain bleak, given Obama’s handover of India policy to his Secretary of State and her favorites. Where is the “change” that we were promised, Mr. President?

You seem to have gone back to Bill Clinton’s policy, of seeing India only within the prism of relations with Pakistan.

India-US Relations Blog

Advancing the Strategic Partnership in 2012

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Notwithstanding the “Delhi disillusionment” that now prevails in Washington, a U.S.-India strategic coalition focused on China is steadily coming together.

The state visit to New Delhi by Wen Jiabao at the end of last year focused on the potential for mutual economic cooperation. The Chinese premier arrived with a large business delegation that promptly signed some $16 billion worth of deals. The two governments also pledged to take their $60-billion trade relationship to the $100-billion level by 2015.

But the India-China narrative in 2011 was more about strategic competition than economic collaboration. Two events over the last month signify how long-standing disputes along their Himalayan frontier have increasingly come to the fore. The first is the abrupt cancellation of border talks due to Beijing’s concerns about the Dalai Lama’s activities inside India. The second is the alarm sounded in the Indian parliament by Mulayam Singh Yadav, a former defense minister, that China is on the verge of launching an attack.  Prime Minister Manmohan Singh dismissed the claim but apprehensions about Beijing’s strategic intentions are growing in Indian public opinion.

New Delhi’s strategic activism in East Asia and the reactions it has elicited in Beijing were also on display this year. During his state visit last year, President Barack Obama urged India not only to “look East” but also “to engage East” for the sake of enhanced security and prosperity throughout Asia. Secretary of State Hillary Rodman Clinton echoed this message during her own trip to India this past July.

The advice was seemingly taken to heart when the Indian government, in defiance of explicit Chinese warnings, proceeded with hydrocarbon exploration in the South China Sea, an area Beijing assertively claims in almost its entirety. New Delhi also moved to solidify security relations with Vietnam, a Chinese nemesis, and to strengthen its influence in Myanmar, which China and India have long regarded as an arena for geopolitical jousting.

Central to the “Delhi disillusionment” that now prevails in Washington are questions about whether the nuclear cooperation accord has succeeded in invigorating U.S.-India geopolitical cooperation in the face of a rapidly growing and more assertive China. But events over the last month demonstrate that a strategic entente focused on Beijing is alive and well. The United States, India and Japan this week held their first trilateral meeting on security issues in East Asia. Nirupama Rao, the Indian ambassador in Washington, has stated that New Delhi will use this dialogue to bolster its engagement in the region. The initiative also represents a further step in the security ties New Delhi and Tokyo have built up in the past few years and which Prime Minister Yoshihiko Noda’s trip to India next week will add to.

A trilateral security effort (here and here) also seems to be congealing among the United States, India and Australia, even if New Delhi remains wary of a formal arrangement. And within its strategic backyard, India has started a tripartite security dialogue with Sri Lanka and Maldives that has China as a focus.

As a previous post noted, 2012 will not be a year of grand initiatives in U.S.-India relations. But officials in Washington and New Delhi should concentrate their energies in the next 12 months on two eminently accomplishable projects:

  • A revival of quadrilateral security cooperation among the U.S., India, Japan and Australia that briefly flowered in 2006-2007. This initiative grew out of the cooperative efforts by the four navies after the December 2004 Indian Ocean tsunami, but lost momentum following the collapse in late 2007 of the Shinzo Abe government in Tokyo and the John Howard government in Canberra. In view of the renewed geopolitical stirrings among the four capitals, the time seems opportune for putting this “Asian Democracies” initiative back on the agenda.
  • New Delhi’s entry into the Asia Pacific Economic Cooperation (APEC) forum. Given India’s rising military and economic profile in East Asia, its absence from this grouping is a serious omission that ought to be rectified.