The unprecedented love affair between the United States and India has been surprising and, frankly, bewildering. After the pompous and ceremonious display with which US President Joe Biden hosted a state dinner with Indian Prime Minister Narendra Modi and the invitation to address a joint session of Congress by the President of the United States House of Representatives, Kevin McCarthy, one wonders if the United States is giving up too much and getting too little in return.
After all, symbols like these are the least of it. Among other things, The United States is transferring sensitive military technology to a non-treaty partner, encouraging his companies to invest in India, easing visa restrictions for Indian citizens and refraining from publicly reprimanding the Modi government for its democratic backsliding.
Indeed, The United States has drawn India into a one-sided quasi-alliance. The strategic justification, of course, is the need to counter China. But what does India get for what the US offers?
Former US diplomat Ashley J. Tellis believes the US is making a “bad bet” because India will never engage in a coalition war with the US against China unless their interests are directly threatened.
In a Sino-American conflict over Taiwan, India would stay on the sidelines, despite the largesse the United States has shown towards her. Even US National Security Adviser Jake Sullivan has acknowledged this.
But India experts like Pratap Bhanu Mehta, a former vice chancellor of Ashoka University, point out that The United States will need India more and more as its own hegemony erodes. The new axis of autocracies includes not only China, Russia and Iran, but also Saudi Arabia and even Turkey.
Faced with this geopolitical development, The US needs to avoid any potential chilling with India, lest it find itself further isolated. Not only is the number of America’s adversaries increasing, but its allies leave something to be desired. Europe is predictably inconsistent and ambivalent, especially when it comes to China; And while Japan and South Korea are reliable allies, their declining demographics deprive them of any real weight.
But, more important still, It is not clear why the United States should do everything possible to prevent India from joining the axis of autocracies. After all, China is a hostile neighbor, Saudi Arabia is a global funder of militant Islam, and Russia, its main military supplier, is headed for chaos. Partnering with such countries is not remotely attractive for India. Similarly, India, with its influential diaspora and basic congruence of economic and military interests, has little to gain from openly snubbing the United States.
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So the US is giving up a lot, either for something India will never commit to (military involvement against China) or for something India would do regardless of the temptations offered. What are American strategists thinking?
A plausible explanation is simply the economic arithmetic of hard power. Both Democrats and Republicans have concluded that China represents an existential threat that cannot be neutralized, but countered. According to the International Monetary Fund, the United States’ GDP in 2023 will be $26.9 trillion, while China’s will be $19.4 trillion (at market exchange rates). But, in the next two decades, that 30% American advantage will likely shrink.
Yet for all the euphoria surrounding India’s growth prospects, is far from matching the economic and financial capabilities of China. China’s GDP is more than five times that of India at market exchange rates, and about 2.7 times at purchasing power parity rates.
The US gamble is based not on the present, but on the expectation that the fortunes of China and India may change in the long term.
Furthermore, China’s military spending is 3-4 times larger, and its foreign exchange reserves (as far as they can be measured now) are easily 6-7 times larger. The difference in total trade between China and India is similar, and their lead in global development lending is astronomical.
China’s overwhelming economic advantage helps explain why India often seems defenseless against provocation such as China’s extensive land confiscations along the border between the two countries in the Himalayas. Such episodes make it clear that India is not a counterweight to China.
But the US gamble is based not on the present, but on the expectation that the fortunes of China and India may change in the long term. Due to long-standing structural and demographic challenges, plus Chinese President Xi Jinping’s increasingly repressive approach to the private sector, China’s long-term growth rate could well fall to around 2.5%. At the same time, India could continue to grow at a rate of 5-6% a year.
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Although not guaranteed, this scenario is plausible if India develops better policies and strengthens its institutions. It wouldn’t eliminate the huge hard power gap between China and India, but could narrow the gap enough to force China to recalibrate its decision-making.
For example, if China’s advantage in GDP, which is five times that of India’s, were to halve over the next two decades, Chinese leaders could no longer afford to ignore the possibility that India could retaliate in the commercial area or along the border.
Furthermore, if China’s growth slowed and India’s remained solidly robust, its relative attractiveness as a partner, market and investment destination would increase. In that case, the strategic calculus would change long before India reached a size sufficient to counter China.
It is true that whether India can grow at 6% will depend on Indian policy makers, not Americans. But The United States believes it is providing a major push at a critical geopolitical moment to boost India’s fortunes. As China becomes more aggressive and its long-term growth prospects are on the downside, US stocks could also encourage more capital to exit the Chinese market.
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And while the preferred outcome would be relocation, the US will not object if the fleeing capital moves to India. US actions could also help improve India’s military capabilities. In effect, the United States is proclaiming to the world that India is “one of us.” The fact that India is flirtatious in openly embracing that status may ultimately be less important.
If understood correctly, Biden’s “gamble on India” is not about securing Indian military support in a hypothetical confrontation with China, nor is it designed to prevent India from moving towards the axis of autocracies. Rather, it is a calculated stimulus aimed at narrowing the real and perceived power gap between India and China. The smaller its hard power imbalance, the more effective it will be to counterbalance the United States relative to China.
ARVIND SUBRAMANIAN
© PROJECT SYNDICATE
PROVIDENCE
Senior Fellow at Brown University and Non-Resident Fellow at the Center for Global Development.
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