Maximum India

The Kennedy Center’s mega-celebration of Indian culture – an extravaganza dubbed “Maximum India” – is now well underway, with sold-out performances and throngs of people in attendance. The three week long festival 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 changed in critical ways. Nowadays, it is broadly viewed as a fast-rising economic and technology powerhouse and home to a vast reservoir of highly-trained brainpower that will inevitably sap the U.S. edge in innovation. When President Obama points to Bangalore as a threat to America’s competitive advantage or invokes India as part of a new “Sputnik moment,” one quickly understands how far we have traveled from yesterday’s stereotypes.

Of course, a segment of U.S. opinion, attracted to Indian cultural traditions and the moral precepts of Mahatma Gandhi, has long held the country in high regard.  But for many decades most Americans were inclined to the views of Harry S. Truman, who dismissed India as “pretty jammed with poor people and cows wandering around streets, witch doctors and people sitting on hot coals and bathing in the Ganges.”  Truman’s Secretary of State, Dean Acheson, had an even more incisive perspective: “by and large [Indians] and their country give me the creeps.”

A decade after Indian independence, 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. A generation after Harold Issacs, the 1984 adventure film Indiana Jones and the Temple of Doom depicted India along essentially the same lines – as a country was filled with hapless, impoverished villagers and benighted religious practices.

Official attitudes in Washington tended to parallel public opinion. U.S. policymakers during the Cold War paid only episodic attention to New Delhi and when they did it was largely a function of the superpower rivalry with the Soviet Union rather a desire to meaningfully engage Indian leaders. The Kennedy administration placed considerable if anomalous emphasis on India, making a massive commitment of economic assistance. But by the end of the Johnson administration, leading Democrats grew fatigued with the country’s seemingly insuperable problems. As Dennis Kux notes in Estranged Democracies, his history of the bilateral relationship, by the late 1960s “India, in Washington’s eyes, had become just a big country full of poor people.” The Nixon administration similarly believed that India was not worthy of heavy engagement. President Nixon himself held denigrating views of Indians, seeing them as supine and indecisive, and regarded Prime Minister Indira Gandhi in an even worse light. 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.”

So, what accounts for the significant shift in cultural perceptions that is increasingly registered in government statements – such as, President Obama’s calling India an “emerged” country and an “indispensable partner” – and in high-profile cultural events like the Kennedy Center’s?  An obvious part of the answer lies in the dramatic turnabout in Indian prospects launched by the 1991 economic reforms. Long gone are the days when India was seen as an economic laggard or a marginal factor in global commerce. In a remarkable sign of changing fortunes, the New York Times “Room for Debate” blog in late 2010 convened seven experts for a discussion on which lessons in economic competitiveness the United States could learn from India.  Along similar lines, Fareed Zakaria in Time magazine contrasted a dejected America with an India filled with people “brimming with hope and faith in the future,” while Thomas L. Friedman in the New York Times proclaimed that “It’s Morning in India.” And a new Citibank report concludes that India will likely be the world’s largest economic power by 2050.

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. 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 report by the RAND Corporation, Indian-American entrepreneurs have business income that is substantially higher than the national average and higher than any other immigrant group.  High-skill immigrants from India are a significant driving force in U.S. prosperity and innovation, most famously in the information technology industry.  As Vivek Wadhwa and his colleagues document, Indians stand out among immigrant entrepreneurs, having founded from 1995-2005 more U.S.-based engineering and technology companies in the past decade or so than immigrants from the United Kingdom, China, Taiwan and Japan combined.  According to industry estimates, Indians are involved in 40 percent of all start-up ventures in Silicon Valley.  India-born scientific and engineering talent is also an important pillar of the faculties in America’s top universities.

The rising profile of the Indian diaspora has helped change public opinion in relatively short order.  For example, in contrast to the traditional sentiment of disdain or pity, a February 2010 Gallup survey found that two-thirds of Americans now have a positive impression of India, a favorability level equal to that of Israel.  In my next post, I will explore further how this societal factor has contributed to the new era in U.S.-India relations and how policymakers in Washington and New Delhi can capitalize on it.

Pakistan’s Annual Deception

By Rajiv Nayan,
Institute for Defense Studies and Analyses

The Conference on Disarmament is an organ of United Nations (UN) for negotiations on disarmament and related issues. The UN Disarmament Commission (UNDC) is the centre for pre-negotiation activities on disarmament. The FMCT is a core issue in CD negotiations. Other issues are nuclear disarmament, negative security assurances and prevention of an arms race in outer space. All 65 members have to agree before, negotiations can commence on any issue. No decision can be possible without a consensus.

Over and above other reasons articulated in previous years, Pakistan had an additional excuse this time. On earlier occasions, Pakistan had stated that the 2008 India-specific exemptions given by the Nuclear Suppliers Group (NSG) had adversely affected the strategic balance in its neighbourhood. Though it did not mention India this year, yet the language and its earlier explicit references to India leave no doubt about what it wants to convey. Referring to South Asia’s strategic environment and to a non- NPT member, Pakistan said: “…it cannot agree to negotiations on a FMCT in the CD owing to the discriminatory waiver provided by the NSG to our neighbour for nuclear cooperation by several major powers, as this arrangement will further accentuate the asymmetry in fissile materials stockpiles in the region, to the detriment of Pakistan’s security interests.”

This time, Pakistan’s objection was that India’s membership of the four multilateral export control regimes, with the support of the U.S. and other countries, would destabilise the region. In November 2010, the U.S. supported India’s candidature for membership of the NSG, the Missile Technology Control Regime (MTCR), the Australia Group and the Wassenaar Arrangement. Later, France also endorsed the U.S. move. It was followed by the Russian support for the membership of those régimes of which Russia is a member – Russia is not a member of the Australia Group. Many more countries are expected to support India’s candidature given its rising global status. Pakistan’s statement in the CD showed its resentment regarding the likely modification of criteria to accommodate India in the NSG and the Wassenaar Arrangement.

It is necessary to examine the objections raised by Pakistan regarding the 2008 India-specific waiver in the NSG. Is it really going to allow India to accumulate so much fissile material that the region around Pakistan would be destabilised? Would the exemption enhance the fissile production capabilities of India? Actually, such propaganda may well serve as an excuse for Pakistan to increase its own fissile material production. In the past, some Pakistani diplomats misled the world by saying that India’s eight unsafeguarded reactors can comfortably produce 1400 kilograms of weapons grade plutonium – sufficient for around 280 nuclear weapons a year – if run for that purpose, or even more if totally dedicated to fissile material production purposes.

When the India-US civil nuclear energy agreement was being debated before the 2008 waiver, one of India’s leading strategic analysts argued in favour of the agreement saying that it would enable India to ‘release’ its indigenous uranium for nuclear weapons, and to use imported uranium for nuclear energy generation. This was one of the many arguments used by both the supporters and opponents of the agreement. However, many of these arguments were unsubstantiated and polemical. The U.S. non-proliferation community followed by the Pakistan government used some of these polemics for their convenience and propaganda. Moreover, India’s indigenous uranium can be allocated in any way by the government, so, the word—release—is basically meaningless.

First, India’s strategic and security imperatives demand that it rely on nuclear weapons mainly for deterrence. If there is a choice between national security and electricity generation, India may prefer the former. Electricity can be generated by other means – despite the growth in nuclear energy production in recent months, overall electricity generation stays around three per cent.

True, there are eight reactors in the strategic category. The categorisation of these and other fast breeder reactors outside the civil category should not imply that India would go in for unlimited and unnecessary fissile material production. These reactors are not going to produce fissile materials round the clock. India’s nuclear doctrine is one of credible minimum deterrence, meaning India will not needlessly hoard nuclear weapons and fissile materials. Moreover, a new nuclear weapon country like India has the benefit of learning from the Cold War experience of nuclear weapons accumulation by the two super powers. The unnecessary accumulation of nuclear weapons created the problem of disposal – not only of nuclear weapons through arms control – but also of excess fissile materials.

Even if we accept the logic that the reactors outside the civil category may be used to produce fissile materials, under the Indo-US nuclear deal India has increased its number of power reactors in the civil category from 6 to 14. Therefore the increase in the number of power reactors in the civil category and the decrease of power reactors outside it should indicate that Indian fissile material production may be decreased, not increased. Any logical analysis would underscore this. Of course, propaganda has its own logic!

This leads to the question: If India is not interested in unnecessary production of fissile materials, why is it retaining eight reactors in the strategic category? The answer is simple: to deal with an uncertain strategic environment. There are some declared NPT and non-NPT nuclear weapon countries which have not made their fissile material stockpiles public. The nuclear weapon declarations of these countries are also uncertain and lack credibility. At the same time, there are undeclared and potential nuclear weapon countries, which are likely to further complicate the strategic environment in the future.

The new Pakistani argument against FMCT negotiations in the CD, namely, that the Indian membership of the multilateral export controls regimes may adversely affect regional stability, is superficial. The membership of the regimes has nothing to do with regional stability; in fact, it is about enabling India to play a role in promoting international peace and stability by participating in the global strategic trade management. Pakistan’s obsession with projecting itself as a competitor to India is frequently leading it to make ridiculous and incomprehensible moves like the one in the CD. Instead, it may do well to imitate India’s responsible nuclear behaviour. It does not realise that the proliferation network and terrorism may not be able to sustain the Pakistani state for long. Pakistan needs to change.

(This post originially appeared at IDSA. USINPAC and IDSA are content partners.)

The Dragon Bares its Fangs

China’s Increasing Defence Expenditure is a Cause for Concern

While India’s defence budget for financial year (FY) 2011-12 has remained unchanged in inflation-adjusted real terms (1,64,425 crore, US$ 36 billion), the People’s Liberation Army (PLA) of China has been given a 13 per cent increase in planned defence expenditure to US$ 91.5 billion). Though China’s official defence expenditure (ODE) is now about 1.5 per cent of its GDP, China’s GDP has been growing consistently at over 10 per cent per annum. Consequently, given its low inflation base and a strong Yuan, China’s defence expenditure has grown at over 10 per cent annually in real terms over the last decade.

Credit: Telegraph.co.ukChinese analysts invariably claim that the rather steep hike is “caused by the sharp increase in the wages, living expenses and pensions of 2.3 million People’s Liberation Army officers, civilian personnel, soldiers and army retirees.” However, other defence analysts look at the spectacular anti-satellite test successfully conducted by China in January 2007, pictures of the first Chinese aircraft carrier under construction, the acquisition of SU-30 fighter-bombers with air-to-air refuelling capability, the drive towards acquiring re-entry vehicle technology to equip China’s ICBMs with MIRVs, a growing footprint in the South China Sea and cannot not help wonder whether a 21st century arms race has well and truly begun.

China’s military aims and modernisation strategy were clearly enunciated in the Defence White Paper of December 2006. “The first step is to lay a solid foundation by 2010, the second is to make major progress around 2020, and the third is to basically reach the strategic goal of building informationised armed forces and being capable of winning informationised wars by the mid-21st century.”

Due to China’s vigorous military modernisation drive, the military gap between India and China is growing every year. India needs to invest more in improving the logistics infrastructure along the border with Tibet, in hi-tech intelligence, surveillance and reconnaissance (ISR) systems for early warning and in generating land- and air-based firepower asymmetries to counter China’s numerical superiority. India also needs to raise and suitably equip more mountain strike divisions to carry the fight into Chinese territory if it ever becomes necessary.

All of these capabilities will require a large infusion of fresh capital. India’s growing economy can easily sustain a 0.5 to 1.0 per cent hike in the defence budget over a period of three to five years, especially if the government shows the courage to reduce wasteful subsidies.

China’s overall aim is to close the wide military gap between the PLA and the world’s leading military powers, particularly in hardware designed to provide strategic outreach capabilities. Consequently, India must enhance its investment in modernising its armed forces so that they are not found wanting in case of another conflict in the Himalayas in future, both in terms of the adequacy of force levels for carrying the conflict into Tibet and the military hardware (firepower, crew-served weapons and C4I2SR), that is necessary to fight at altitudes above 11,000 feet on the Tibetan Plateau.

Rising Challenges, Declining Resources

India’s defence budget continues to be pegged at less than 2.0 per cent of the country’s GDP despite the recommendations of successive Standing Committees on Defence in India’s Parliament that it should be at least 3.00 per cent if the emerging threats and challenges are to successfully countered.

Credit: news.xinhuanet.comIn his budget speech on February 28, 2011, Finance Minister Pranab Mukherjee set aside Rs 1,64,425 crore (US$ 36 billion) for defence during the next financial year (FY 2011-12). Though the present allocation shows an increase of 11.59 per cent over the budgetary estimates for FY 2010-11 and 8.47 per cent over the revised estimates, it is barely adequate to neutralise the annual rate of inflation. Inflation in weapons, ammunition and defence equipment is usually much higher than domestic inflation.

Of the total allocation for defence, on the revenue account the army will get Rs 64,250 crore, the navy Rs 10,590 crore, the air force Rs 15,93 billion and the Defence Research and Development Organisation (DRDO) Rs 5,624 crore. The total revenue expenditure planned for the year is Rs 95,216 crore (US$ 21 billion, 58 per cent of the budget). The remaining amount of Rs 69,199 crore (US$ 15 billion, 13.75 per cent increase, 42 per cent of the budget) has been allotted on the capital account for the acquisition of modern weapon systems, including 126 multi-mission, medium-range combat aircraft, C-17 Globemaster heavy lift aircraft, 197 light helicopters, 145 Ultra-light Howitzers and C-17 heavy-lift aircraft. It is well known that India plans to spend approximately US$ 100 billion over 10 years on defence modernisation.

Giving his reaction to the Finance Minister’s budget speech, Defence Minister A K Antony said, “We welcome it as our concerns have been by and large addressed and the Finance Minister has stated that if we have any fresh requirements, they would be made up without any difficulty.” However, while the reactions of the armed forces are not known, they are unlikely to be satisfied as their plans for modernisation have been stymied year after year by the lack of committed budgetary support. The 11th Defence Plan, which will enter its fifth and final year on April 1st, has not yet been accorded approval in principle by the government and, therefore, lacks committed budgetary support. The only silver lining on the horizon is that the funds earmarked on the capital account for FY 2010-11 have been fully spent by the government for the first time in many years.

In addition to the defence budget, the government has also earmarked adequate resources in the annual budget of the Ministry of Home Affairs (MHA) for homeland or internal security. A portion of these funds will be utilised for setting up a National Intelligence Grid and the National Counter-terrorism Centre – measures which are considered necessary consequent to the Mumbai terror strikes in November 2008. Also, funds for the modernisation of central police and para-military forces will be provided from the budget of the MHA.

This year’s defence budget is 1.84 per cent of the projected GDP and 13.07 per cent of the total Central government expenditure. China’s official defence expenditure is US$ 78 billion (3.5 per cent of its GDP) while its actual expenditure is well above US$ 100 billion. The U.S. defence expenditure was US$ 530 billion in fiscal year 2010, excluding funds allotted for the wars in Afghanistan and Iraq. In fact, the 13th Finance Commission has recommended that the nation’s defence expenditure should progressively come down to 1.76 per cent of the GDP by 2014-15. Quite clearly the Finance Ministry appears to have decided to pay heed to this advice.

India’s defense budget increase

In the 2011 Union Budget presented yesterday in the Indian Parliament, the Finance Minister announced an 11% hike in the defense budget during the next fiscal year. India has now set the defense budget for FY 2011-12 at $36.28 billion. Forty percent of the budget would be spent on capital expenses, while the rest goes towards maintaining the Indian Army, which is one of the largest in the world.

The significant rise in defense spending could be attributed to the increasing military capabilities of India’s two immediate neighbors with whom it has fought wars previously – China and Pakistan. Over the last few years China has been rapidly expanding its defense spending, and it has grown approximately 13% annual on an average since 1989. According to some estimates, China’s defense spending in 2010 was about $100 billion. The size of its army is almost twice that of India’s and is much better equipped.

On its western border, Pakistan has been going through a rough phase of economic, political and social upheaval, while its military budget keeps increasing. Last year it increased its defense spending by 17%, partly to aid U.S. in the war on terror. This is in addition to the economic and military aid the U.S. provides Pakistan for the same purpose. Over the last few weeks there have also been news of a rapid increases in Pakistan’s nuclear arsenal, with it set to overtake Britain as the fifth largest nuclear power. Pakistan is building its fourth plutonium reactor and has more than 100 deployed nuclear weapons. Not to mention that the Pakistan Army and the ISI policies have traditionally been India-centric, with a majority of the forces deployed along the Indian border.

Under such external circumstances and the need to upgrade and procure equipments and machinery, the Indian defense spending increase seems well placed. India has a few procurement deals lined up for the year, but it would need to do a lot more to match up to China’s standards. As its primary competitor not only economically, but also for geopolitical influence particularly in East Asia and Africa, India needs to speed up and match up its defense capabilities with those of China. A strong military would be essential to counter any potential threats from an unstable AfPak region.

Circumstantially as important as it may be, the increases in defense spending of all the three countries contribute to the arms race in the region taking it to the edge of volatility. While it would not be prudent to expect a decrease in expenditures or an end to military procurements and upgrades, the three countries need to make concentrated efforts to reduce the need for the increase in military spending.