Indian Prime Minister Narendra Modi shakes hands with President Donald Trump, as first lady Melania Trump looks on as Modi departs the White House, Monday, June 26, 2017, in Washington. (AP Photo/Alex Brandon) Indian Prime Minister Narendra Modi shakes hands with President Donald Trump, as first lady Melania Trump looks on as Modi departs the White House, Monday, June 26, 2017, in Washington. (AP Photo/Alex Brandon)

Central to India’s foreign policy since the Cold War has been a growing strategic tilt towards the US out of a desire to balance a rising China. Prime Minister Narendra Modi’s interactions with President Donald Trump suggest that New Delhi will have to do a foreign policy rethink, particularly on relations with the US and China as they have developed since 2014.

India’s relations with the US have gone through three phases. From 1947 to 1971, India tilted towards the US even as it insisted on non-alignment. Jawaharlal Nehru disdained communism and was on record stating that, at the limit, in a fight, India would side with the Anglo-American democracies. In the second phase of the relationship, from 1971 to 1989, India tilted the other way, siding with the Soviet Union and against the Anglo-Americans while remaining formally non-aligned.

We are now in the third phase of India-US relations. What is striking about the last 27 years is that India has increasingly tilted towards the US in global strategic terms. The tilt began with P.V. Narasimha Rao’s prime ministership, was accentuated by Atal Bihari Vajpayee, became even more acute under Manmohan Singh, and has inclined still further towards Washington in Modi’s time. At the heart of the steadily increasing strategic tilt towards the US has been India’s worry over the dramatic rise of China. In 1990, the GDP of India and China was roughly equal in nominal and purchasing power parity (PPP) terms. In 2017, China’s economy is nearly five times India’s size in nominal terms and two-and-a-half times larger in PPP terms. This growing power imbalance largely accounts for India’s tilt towards the US under successive prime ministers.

Trump’s coming to power has raised questions about India’s tilt. During his campaign and in the early weeks in office, it appeared that the new president had China in his gunsights. However, the Mar-a-Lago summit with President Xi Jinping and subsequent interactions with Beijing have seemingly reversed the US’s initial orientation towards China. China is now regarded as a valued partner in dealing with the US’s trade deficit and in containing North Korea.

On the other hand, India’s relations with China are worse than they have been in many years, going back to the late 1980s. Relations with Pakistan too have hit rock bottom. Not surprisingly, the China-Pakistan relationship is stronger than ever, bolstered by Pakistan’s role in the Belt and Road Initiative (BRI). Nor can India count on Russia to help with China or Pakistan. Moscow has a quasi-alliance with Beijing and is mending fences with Islamabad.

It is in this context that Modi went to Washington to assess the health of the India-US relationship. What can we conclude from the prime minister’s visit? First, it comes six months into Trump’s presidency, after the president has met the leaders of virtually all his key partners and interlocutors in Europe, the Middle East, and Asia. This tardiness in meeting Modi suggests that India is not particularly high on Trump’s to-do list. Second, Trump is unwilling to alienate China beyond a point. In 2014 and 2015, with Obama in the White House, India and the US committed to a strategic partnership in the Asia Pacific and Indian Ocean. The Modi-Trump joint statement of 2017 has visibly softened those commitments. That Trump must be careful not to alienate China is realistic given Beijing’s importance for America’s economic health and its policies towards North Korea.

Third, Trump is transactional and demands reciprocity in economic terms, above all. So, allies must pay a bigger share of common defence, and major trade partners must take steps to reduce US deficits and to invest in America to create jobs. India is not an ally, but it does have a trade surplus with the US: It must therefore deliver on “fairer” trade and on job creation. If New Delhi cannot deliver here, Trump will lose interest in India, if not turn hostile. India has therefore put in a request for over $2 billion worth of US maritime surveillance drones. It is close to an agreement with Lockheed Martin to produce F-16 fighters in India, and Spice Jet is likely to buy 100 aircraft from Boeing. India will also continue to buy liquified natural gas (LNG) from America. The LNG deal has been in existence for over two years, but Trump is angling to raise the price, and New Delhi could well decide to meet his demands.

What are the implications for Indian foreign policy going forward? India’s demotion strategically in Washington suggests that New Delhi must renew and deepen relationships elsewhere, particularly in Europe, which has stabilised since the spate of recent elections and will stabilise further when, as appears likely, Angela Merkel is re-elected. Cultivating Japan further and resetting India’s relations with Moscow is another priority.

Clearly, New Delhi had tilted too far towards the US and been too aggressive with China including on the border, Masood Azhar, the Nuclear Suppliers Group, and BRI. Trump’s softer line on China should tip New Delhi over into being more circumspect. With yet another border confrontation brewing, this time in Sikkim-Bhutan, it is time for the prime minister to change tack before India finds itself in dangerous conflict with its powerful neighbour — a conflict in which it will find itself alone, with little or no hope of American help. Modi began well with China, emphasising economic ties. It is time to return to that approach.

Most importantly, India’s “Trump card” must be economic. India’s defence industry remains unable to produce major weapons systems, and its armed forces are critically short as a result. The US could be India’s main supplier of automatic weapons, artillery, aircraft, naval boats, and other vital systems. Outright purchases and co-production agreements with the US would help meet India’s yawning military needs — and will have the happy effect of generating employment in the US. In short, the future must be business, not business as usual.

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