Indian Politics and the U.S.-India Strategic Relationship

The AAP won a landslide victory in the Delhi Assembly elections, despite a strong campaign by Prime Minister Narendra Modi’s BJP. The previous AAP government was quite short-lived, but some analysts have argued that this victory could be a thorn in the side of the BJP, giving the AAP a real voice at the national level. What do you think this result might mean for the BJP and larger Indian politics? Are people starting to run out of patience with the Modi government?

It certainly should come as no huge surprise to the BJP that the AAP can win elections. The party won overwhelmingly in the previous New Delhi elections, and this time it once again had a strong and convincing turnout and performance. This second victory certainly conveys some of the AAP’s strengths and its candidates’ personal appeal. The result also reflects the Delhi voters’ concerns about economic growth, job creation, anticorruption initiatives, safety of women, the environment, and education. The AAP has performed well previously, and it shouldn’t be a surprise that the party did very well here again.

It’s important to remember that just as the United States has a diverse array of interests present in our great democracy across different regions of the country, India also has a lively and energetic democracy with a broad range of opinions, values, and beliefs represented in different regions, states, and cities. I think it’s too early to make judgments about the Delhi election and broadly apply them nationally. Certainly there are some in the Indian press who argue that the BJP is moving too incrementally on reforms. Others oppose the reforms as too much too fast, and still others believe Prime Minister Modi has struck the right balance. Almost every expression is there, but from where I stand, it’s still too early to make a perfect prediction of the future politics.

During the national elections, Modi outlined a number of very bold initiatives and goals, including promoting the “Make in India” initiative, clamping down on corruption, working to “clean India,” and returning economic growth to an annual rate of 7%–8%—all difficult to achieve in one year. The Indian electorate is increasingly aspirational and was ready for a change from the Congress Party UPA II government, but Indian voters are also exceptionally smart and recognize that these types of reforms take some time. Of course, there is a risk in the near future if voters do not see the Modi government successfully achieving its goals in a timely manner. But I don’t believe we’re there quite yet, especially given that the BJP has been so successful in other state elections. With elections coming in West Bengal and Bihar, we will have another barometer to read very soon.

North of Delhi, in the disputed region of Kashmir, the BJP surprised many analysts by forming a coalition state government with the majority-Muslim PDP, which calls for greater self-rule in the disputed province. What is the likelihood that this partnership will succeed? What are some potential implications of this coalition?

This political partnership is still brand new and relatively untested. We’ve only seen these two parties try to work together over the last several weeks, with some initial conflicts, and it will take time before we can draw any specific conclusions. I’m sure there will be more mistakes made in trying to find the right set of pragmatic working relationships between party leaders and the parties themselves. During my time as ambassador, I visited Kashmir in March 2011 and met with Chief Minister Omar Abdullah. He expressed a strong desire on the part of all the people in Jammu and Kashmir to increase access to reliable energy, improve the school systems, and attract more investment in the region. I think the desire for change and to work together certainly exists among the people of Jammu and Kashmir. We’ll see if these two parties can build on this potential, and I remain hopeful for peace and economic prosperity.

During my above mentioned visit, I was struck by several things. First, during this relatively peaceful period, one could clearly see the economic potential for the region. I was greatly impressed, for example, by the growth in residential housing and investment in hospitality industries that were occurring at that time. Today, of course, expectations and confidence all across India are increasing, and Kashmir is no exception.

Second, during my trip I met with a number of youth groups from both Muslim and Hindu communities. Many of these groups emphasized working together to heal wounds, building community, and cooperating toward creating a more promising future. So my takeaway is that when there is peace, there is great potential for economic and social progress, even with small steps. Therefore, the fact that these two parties (the BJP and PDP) have come together, and polls show general optimism for the future, displays potential for tangible results.

Economic reforms have played such a central role in Indian politics of late. The Indian electorate clearly voiced its frustration with the sluggish growth rate and tepid reforms of the recent past, and Modi’s BJP has staked its political fortunes on its capacity to promote growth—setting a 7%–8% annual growth rate as its goal. What is your view on the economic performance of the current government, specifically following the recent unveiling of the 2015 budget?

There are many positive signs in the 2015 budget that make me optimistic about Prime Minister Modi’s ability to boost economic growth and achieve the goal of 7%–8% annual growth. In submitting this budget, the Modi government is striking a balance between a series of “big bang” reforms and an incremental approach. The recent drop in oil prices is an important windfall, and Modi’s election has bolstered confidence in India within the investment and business communities, both of which allow for more flexibility in the budget.

The budget reflects a series of sensible reforms and proposals: deregulating the price of diesel, opening auctions of coal mining licenses, moving forward on direct cash transfers for the poor, implementing a national goods and services tax, and planning for infrastructure investment. All these demonstrate that there will be some tangible actions and not just talk about economic reforms. There are, of course, significant additional challenges. India, for example, is still ranked 142 out of 189 countries on the “ease of doing business” scale. This is partly a reflection of India’s massive bureaucracy and endemic corruption, which continue to be major issues that this government will have to address. Funding and building infrastructure improvements will also be crucial. Additionally, getting land-acquisition bills through parliament will be extremely helpful and will send strong signals to the United States and other FDI partners that things are truly changing. India should also demonstrate real progress on the issue of intellectual property protection. These measures would all signify continued positive steps, attract greater levels of investment and new business partners, and help propel economic growth in India.

How would you characterize the emphasis the Obama administration has placed on its relationship with India?

It is crystal clear from President Obama’s actions that the U.S.-India relationship is a highly unique and very special one. He is deeply and personally committed to this partnership and has executed policies on several levels to advance the strategic nature of the relationship. Whereas ten years ago, for instance, we would see a hyphen in the India-Pakistan relationship, today there is no limit to the depth of bilateral relations with India. This extends to cooperation on sensitive intelligence issues and a historic new counterterrorism agreement, as well as the important Defense Trade and Technology Initiative (DTTI). The United States is now India’s number-one partner in defense acquisitions and military exercises, which, along with economic and education initiatives, is a reflection of India’s status as the linchpin of the U.S. rebalance to Asia. In short, the relationship between these two great democracies has been fundamentally transformed since the days of the Cold War.

When I met with President Obama in the White House in 2009 and talked about the U.S. relationship with India, the president was very specific about wanting to spend his personal time developing this relationship. Consequently, he wanted to find ways for the United States to work with India not only bilaterally but also regionally and globally. This is why he endorsed Indian membership in the UN Security Council and encouraged greater Indian investment in Afghanistan, resulting in a $2.4 billion pledge from India to support energy, infrastructure, and economic projects within that country.

The efforts between the United States and India to promote democracy are vital in the region. Sri Lanka, for example, is emerging from a long and painful civil war and is looking to reach out more to India and the United States to assist with its economic development. Bhutan is also in the early stages of trying to firmly establish institutions of democracy within its borders. Elements in Nepal are struggling to push for a more open system. Myanmar is slowly opening up to the international community. Bangladesh is looking for economic assistance and development investment. One of the important questions the Obama administration has examined is how India and the United States can work together to promote economic growth and democracy in the entire region. China will carefully monitor this relationship over the ensuing years.

What are some of the ways U.S. policymakers can help further the U.S.-India relationship?

From the American side, a first step toward encouraging positive developments would be an agreement on the bilateral investment treaty. This would go a long way toward establishing a legal framework for transparency, reliability, and trust in the trade relationship. Additional steps would include continuing to work day-by-day on the DTTI and seeking appropriate ways to sell and transfer more security equipment to India, thus helping the country increase its defense capabilities and protect its interests in the region. We should identify avenues to work on interoperability and logistical cooperation as keys to improving our antipiracy efforts and enhancing counterterrorism cooperation. Specifically, if the United States can achieve an agreement with India on cybersecurity issues, that would set a very significant precedent for other countries in the world to emulate this type of cooperation and partnership. A cornerstone of the U.S-India relationship is our mutual dedication to human rights, the improvement of access to education, and the elevation of the poor out of poverty. Progress and programs on these fronts should continue to be the highest priority. Finally, achieving some tangible progress on the civilian nuclear agreement resulting in GE and Westinghouse actually conducting business in India would be a critical breakthrough.

What can we expect to be the most important developments in Indian politics over the next year?

We will definitely see Prime Minister Modi focus on following through with his pledge to get economic growth to 7%–8%. This is an issue he relentlessly campaigned on, and it will likely consume much of his time. We’ll also see him look to promote a new form of federalism and develop a relationship with the Indian states where he can incentivize them to work with the central government to implement his big initiatives. He will potentially utilize and leverage his new budget to accomplish this. Prime Minister Modi can also be expected to put a great deal of emphasis on securing and increasing his power in the legislature. It will be important to see how he plans to continue to improve his prospects of getting legislation through both upper and lower houses of parliament. Considerable focus will be on the Rajya Sabha (upper house), where the BJP does not have a majority. His progress on this front will be particularly important for getting legislation passed on land acquisition, infrastructure investment, labor reform, and economic growth issues.

It will be interesting to see if Prime Minister Modi reaches a point where he has consolidated enough power to push more boldly for larger parts of his economic agenda, or perhaps even for action on climate change, the environment, or big education issues. As always, we must continue to carefully monitor the evolving opinions of the Indian electorate. We will have to watch if there is a point in the next two or three years when the electorate begins to lose patience if Prime Minister Modi is unable to show concrete progress on his campaign promises. Given the challenges in foreign policy and the volatility in the region, it will be crucial to watch precisely how the Modi foreign policy team engages and executes its vision and reacts to its first crisis.

Finally, it will be fascinating to see how the Congress Party will rethink, reform, and rebuild itself in the years ahead. What leaders and policies will emerge? Any democracy works best when there is a sharp and competitive opposition party to propose and oppose. It will be crucial to see how the leadership of the Congress Party develops new ideas and projects, and whether it undergoes significant changes. Regional parties have always been a factor in Indian politics, so assessing their influence and progress will also be important. Will the BJP, Congress, or regional parties be able to develop a pro-growth and pro-environment policy for accelerated job creation and cleaner air? Twenty years ago, few would have predicted Barack Obama and Narendra Modi leading their respective countries. One thing is certain—anything can happen in democracies.

Tim Roemer is Senior Director and Strategic Counselor, Global Political Strategies, at APCO Worldwide. A former six-term U.S. representative for Indiana’s 3rd congressional district, he served as U.S. ambassador to India from 2009 to 2011.

This interview was conducted by Louis Ritzinger is a Bridge Award Fellow with the Political and Security Affairs group at NBR.