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.
Defence And Strategic Affairs Blog

India-Pakistan Nuclear Confidence Building Measures

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After a long gap, the India-Pakistan nuclear confidence building measures (CBMs) joint working group will meet at Islamabad on December 26, 2011. In February 2007, India and Pakistan had signed a long-anticipated agreement on nuclear CBMs and nuclear risk reduction measures (NRRMs). However, for some inexplicable reasons, the two countries have so far failed to make details of the agreement public.

The aim of instituting nuclear CBMs is to avoid tensions arising from mistrust, misperception, accidents and military brinkmanship. India and Pakistan can never have such high stakes in a future conventional conflict that they could possibly risk nuclear exchanges. It was due to this realisation that the two countries agreed in February 1999 at Lahore to engage in bilateral consultations on security concepts and nuclear doctrines, with a view to developing measures for confidence building in the nuclear and conventional fields.

Both the countries also committed themselves to undertaking national measures to reduce the risks of accidental or unauthorised use of nuclear weapons under their respective control and had agreed to continue to honour their respective unilateral moratorium on further nuclear tests. They had also agreed to provide each other with advance notification in respect of ballistic missile flight tests. This informal understanding was converted into an agreement on the pre-notification of ballistic missile tests on October 3, 2005. Subsequently, both the countries also agreed to provide a “hotline” between the Foreign Secretaries – a cosmetic measure of little consequence.

A number of additional nuclear CBMs and NRRMs need to be implemented by India and Pakistan. The first of these should be a formal agreement on de-mating nuclear warheads from their delivery systems. This implies that warheads for missiles like the Indian Agni and the Pakistani Ghauri and Ghaznavi should be stored separately in a disassembled form, i.e., the atomic core and the conventional high explosive (HE) bomb casing, including the trigger mechanism, should be stored at separate locations during peacetime to reduce the risk of inadvertent or unauthorised use of nuclear weapons.

Another viable measure would be to enter into an agreement on the non-use of short-range ballistic missiles (SRBMs) for nuclear deterrence. SRBMs like India’s Prithvi (range 150-250 km) and Pakistan’s Hatf series (Hatf I, II and III – derivative of China’s M-11, with ranges less than 300 km), are inherently destabilising due to their greater mobility, deployment in the close vicinity of the tactical battle area and the short time of flight that gives virtually no reaction time before the missile impacts. As both the nations now have longer-range missiles in service, India and Pakistan would do well to exclude this class of missile completely from their nuclear arsenals. However, by opting to test the nuclear-tipped 65 km range Hatf-9 (Nasr) SRBM, Pakistan has vitiated the atmosphere.

Both the countries should agree to establish national-level risk reduction and monitoring centers, with a suitable communications infrastructure, to build mutual trust. Such centres would act as a hotline between the strategic forces commands. Subsequently, nuclear CBMs and NRRMs could be upgraded to include measures that might appear fanciful today: verifiable deployment restrictions and limitations; shared early warning arrangements; prior information about the movement of nuclear-capable air force squadrons from one base to another; and, identification and notification of training and testing areas for nuclear forces units to distinguish them from deployment areas

The best nuclear CBM between India and Pakistan would be to negotiate and sign a mutually acceptable and verifiable no first use treaty. However, this is unlikely to be acceptable to Pakistan at present as Pakistan relies on its nuclear arsenal to balance India’s conventional superiority.

Immigration Blog

Indian-Born Executives Lead New List of Top Immigrant-Founded Companies

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New research reveals that many of America’s top companies that have received venture capital have immigrant founders. An impressive group of Indian-born entrepreneurs head the list.

I authored a recently-released study (find it here) that concluded, “Immigrants are increasingly important in driving growth and innovation in America, as evidenced by the role played by foreign-born founders and key personnel in the nation’s breakthrough companies.” The study found, “Immigrants have started nearly half of America’s 50 top venture-funded companies and are key members of management or product development teams in almost 75 percent of our country’s leading cutting-edge companies.”

To conduct the research I interviewed executives and company personnel and gathered information on the top 50 venture-backed companies in the United States. Those 50 companies had been ranked by the firm VentureSource using criteria such as the track record of the management and investors and recent revenue growth.

I found that the companies with at least one immigrant founder averaged about 150 jobs per company in the U.S. Overall, 23 out of 50, or 46 percent of the top venture-funded companies in America had at least one immigrant founder.

The leading source country for immigrant founders was India, followed by Israel, Canada and Iran. There were also immigrant founders on the list from Italy, South Africa, Greece, Norway, Germany, the United Kingdom, Singapore, Switzerland and France.

Here are the companies on the top 50 venture-funded list that had at least one founder born in India:

Aster Data Systems, whose founders include Tasso Argyros (Greece) and Mayank Bawa (India). The company, based in San Carlos, California, employs approximately 100 people. The focus of the company is providing data management, as well as advanced analytics, for employers.

Chegg Inc., based in Santa Clara, California, has become a well-known company for its textbook rental service. It has about 150 employees. Chegg’s founders are Aayush Phumbhra (India) and Osman Rashid (U.K.).

Glam Media, based in Brisbane, California, had 8 founders. Two of the founders were born in India, Samir Arora and Raj Narayan. Following a recent acquisition the company employs about 500 people. Glam works with about 2,500 website partners in the U.S. and Europe. It helps facilitate web advertising in niche and “mid-tail” websites for name brand advertisers.

Umesh Maheshwari and Varun Mehta, both born in India, started Nimble Storage, based in San Jose, California. The company employs 55 people and focuses on disaster-recovery systems, backups and storage.

Suniva, based in Norcross, Georgia, sells solar cells and modules. It was founded by Ajeet Rohatgi, born in India, and employs 190 people.

Xactly, based in San Jose, California, was founded by Christopher Cabrera and Satish Palvai (India). The company sells Internet-based software that can be used for sales compensation. It employs 140 people

Xsigo Systems, also based in San Jose, California, provides equipment and software for the management of datacenters. Employing 110 people, it was started by three brothers born in India, R.K. Anand, Ashok Krishnamurthi, and S.K. Vinod.

“Today’s breakthrough companies are often founded by immigrants or at least employ a foreign-born scientist, engineer or CEO crucial to business growth and product development,” the report noted. “Executives say access to talent from around the world is even more important to companies in their emerging growth phase.”

A key finding of the research is that our country gains when we are open to talented people, without regard to their place of birth. “Policies that help retain talent in the United States are likely to yield both more startup companies and the personnel needed to create more jobs and innovation in America,” the study concluded.

Immigration Blog

New Research Reveals Benefits of High Skill Immigration

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The main argument made against providing more green cards or temporary visas for high skilled immigrants is that it would mean fewer jobs for U.S. workers. Such concern is based on the mistaken impression that there is only a fixed number of jobs and the entry of any newcomer to the labor market must mean bad news for an incumbent jobholder. Of course, that concern does not reflect how a market economy functions.

Now there is new evidence from a respected economist that high skilled foreign nationals create more jobs for Americans. The report from American Enterprise Institute and the Partnership for a New American Economy – a copy of the study can be found here – was conducted by Madeline Zavodny, a professor of economics at Agnes Scott College and former research economist at the Federal Reserve Bank of Atlanta.

The report carried four main conclusions. First, that immigrants with advanced degrees, particularly in STEM (science, technology, engineering or math) fields create more jobs for U.S.-born workers. According to Zavodny, “The data comparing employment among the fifty states and the District of Columbia show that from 2000 to 2007, an additional 100 foreign-born workers in STEM fields with advanced degrees from U.S. universities is associated with an additional 262 jobs among U.S. natives.”

Second, the study found positive employment benefits from both low skill (H-2B) and high skill (H-1B) temporary visas. “The data show that states with greater numbers of temporary workers in the H-1B program for skilled workers and H-2B program for less-skilled nonagricultural workers had higher employment among U.S. natives. Specifically, adding 100 H-1B workers results in an additional 183 jobs among U.S. natives. Adding 100 H-2B workers results in an additional 464 jobs for U.S. natives,” according to the analysis.

Third, the research addresses concerns that more immigrants entering the labor force hurt U.S. workers. The study concluded, “The analysis yields no evidence that foreign-born workers, taken in the aggregate, hurt U.S. employment.”

Fourth, immigrants with a high education level are major fiscal contributors to the United States. Zavodny writes, “In 2009, the average foreign-born adult with an advanced degree paid over $22,500 in federal, state, and Federal Insurance Contributions Act (FICA, or Social Security and Medicare) taxes, while their families received benefits one-tenth that size through government transfer programs like cash welfare, unemployment benefits, and Medicaid.”

Zavodny believes it’s possible the research underestimated the benefits of high skill immigration. “There are two reasons to think that this study, which uses annual, state-level data over a ten-year period, may actually underestimate the job-creating effects of highly skilled immigrants. First, it does not capture long-run effects if the economy benefits more from immigrants in the long run than in the short run (as suggested by other recent research). Second, it does not capture ‘spillover effects’ if immigrants create jobs in states other than the one where they work (for example, more immigration in California leads businesses to also create new jobs at a subsidiary in Indiana).”

The study was praised by elected officials who favor more liberalized immigration policies. “At a time when job creation should be our highest priority, the study released today casts light on some of the greatest potential areas for growth, at no cost to taxpayers,” said New York City Mayor Michael R. Bloomberg, co-chair of the Partnership for a New American Economy. “It’s time for Washington to restart the conversation on immigration reform – and to center it on our economic needs.”

While the research is not likely to cause critics of immigration to throw up their hands and concede defeat, the study represents important evidence that America and Americans gain from being open to immigrants.

Defence And Strategic Affairs Blog

India must Upgrade its China Strategy from Dissuasion to Deterrence

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It is in India’s interest to focus its diplomatic efforts to expedite the delineation of the Line of Actual Control (LAC) on the Indo-Tibetan border and urge China to resolve the territorial and boundary dispute in an early time frame. In conventional weapons and present force levels, the Indian Army has adequate combat capability to defend the border, but not sufficient to deter war as it lacks a potent offensive operations capability. The gap between India and China in overall military potential, particularly the gap in strategic weapons, is increasing rapidly in China’s favour. China is also actively engaged in upgrading the military infrastructure in Tibet in substantive terms. The all-weather railway line to Lhasa, being extended further to Shigatse and later to Kathmandu, will enable China to build up rapidly for a future conflict. New roads and military airfields have also been built. Military camps are coming up closer to the border. China has inducted a large number of SRBMs into Tibet and can rapidly induct another 500 to 600 SRBMs for a future conflict by moving them from the coastline opposite Taiwan. With improvements in military infrastructure, China’s capability of building up and sustaining forces in Tibet has gone up to 30 to 35 divisions. The PLA’s rapid reaction divisions can also significantly enhance its combat potential over a short period of time. As China’s military power in Tibet grows further, it will be even less inclined to accept Indian perceptions of the LAC and the boundary.

Another factor of concern to India is the emplacement of Chinese nuclear-tipped missiles in Tibet, reportedly first brought to the Tibetan plateau in 1971. While these missiles may have been targeted against the Soviet Union till recently, the present Russia-China rapprochement would make such targeting illogical. The mere presence of Chinese nuclear-tipped missiles in Tibet poses a direct and most serious threat to India as these missiles (DF-2, DF-3, DF-4 and, possibly, DF-5) are capable of reaching all Indian cities. Beijing has been very effective in hiding details of the number of missiles actually deployed and India is only now acquiring the technological means to track and pinpoint the exact locations of these missiles or any others in the Lanzhou-Chengdu region and at the Datong and Kunming missile bases which may have the potential to reach and target Indian cities. This shortcoming needs to be overcome as early as possible through an Indian military intelligence satellite and by humint means.

India, therefore, needs to build up adequate military capabilities to deter the threat from China. In the short-term, the requirement is to ensure that there are no violations of the LAC through effective border management while maintaining a robust dissuasive conventional posture. India must step up its diplomatic efforts to seek early resolution of the territorial dispute, particularly the immediate delineation of the LAC physically on ground and map. Efforts to develop military infrastructure in the border areas for the speedy induction of forces need to be stepped up. India must maintain a strong capability to defend island territories in the Bay of Bengal and to safeguard national interests in the Exclusive Economic Zone. Diplomatic efforts to increase India’s influence in the CARs, Myanmar, Nepal, Bangladesh and with the ASEAN countries should be pursued vigorously.

The long-term requirement is to match China’s strategic challenge in the region and develop a viable military deterrence capability against the use of nuclear and missile weapons systems. Threats posed by nuclear-tipped ballistic missiles cannot be countered by the deployment of land forces and conventional air power alone. Nuclear weapons are best deterred by nuclear weapons and, as a logical corollary, only missiles can deter missiles. Hence, India must develop, test and operationally induct the Agni-III, Agni-IV and Agni-V IRBMs and raise two mountain Strike Corps so as to be able to upgrade its present strategic posture of ‘dissuasion’ to one of credible ‘deterrence’ against China.