India and the next U.S. president

I just returned from my third trip to India in four years. Every time I am struck by its confidence facing an ever more integrated world. Retaining relatively high growth rates, India has been relatively unscathed by the financial crisis. India’s confidence about its future comes from a number of factors, including the success of …

I just returned from my third trip to India in four years. Every time I am struck by its confidence facing an ever more integrated world. Retaining relatively high growth rates, India has been relatively unscathed by the financial crisis. India’s confidence about its future comes from a number of factors, including the success of the India diaspora across the globe and its definitive break with failed Indian- style socialism in the early 1990s. They have signed on to a model of development that requires increasing openness and they see the a key partner.

The United States and India have many shared interests and much of the credit goes to former President Bush for successfully “resetting” the India relationship. After visiting Brazil and Russia in the last three months for a project at my day job, I conclude that a new President will have a most willing partner in India and a most able partner in Russia.

I met with senior officials of the U.S. and Indian governments, leaders in the NGO sector, and think tank scholars who were all very openly pro US. It was refreshing after meeting with Brazilians and Russians with a laundry list of “issues” about the U.S. relationship. The U.S.-India relationship benefits from the best “atmospherics” of the three. One senior Indian official described the United States as the “greatest country in the world” without hyperbole or sarcasm.  These are people with whom we can do A LOT of business.

Some facts to think about as we look to the 2012 election:

India has consistently provided a top number of troops to the U.N. Peacekeeping Mission and continues to do so — hundreds ahead of other donor countries.

The number quoted to me is 3 million “overseas Indians” in the U.S. The most prominent Indian American politicians are Republican — Bobby Jindal and Nikki Haley.

India is slated to become the 3rd largest economy in the world within the next few years.

With 1.1 billion people, it has something like 400 million very poor people. India has more poor people than all of sub-Saharan Africa.

At the same time, India has sought to increase its foreign aid to other countries and has a joint space exploration program with Russia and is a member of the G-20. About eight years ago, India kicked many smaller European donor countries out of the country because the transaction costs were too high in exchange for the money they were getting.

This past year, our trade with India hit nearly $50 billion, up from only $5 billion in 1990 — a relatively small number compared to other U.S. trading partners. For example, U.S. trade with Canada totaled nearly $495 billion in 2009 while trade with China totaled $390 billion.

Indian officials see the world much like those in the United States with similar interests and concerns. The concerns about terrorism were ever present in my visit — constant metal detector stops at hotels, metro stations, airports and government ministries — a far cry from Brazil’s splendid isolation and sense of safety.

The opportunities with India are immense and our assistance and other cooperation programs need to radically reposition our relatively small amounts of foreign aid away from social service delivery to a number of smaller catalytic activities that leverage Indian expertise, deepen the institutional relationships between the two countries, and export India expertise and innovation to third countries in line with Indian aspirations as a global player. USAID and the State Department have started to make some steps, but need to take much more aggressive steps over the next several years. It will be hard to justify an annual foreign aid program in India as it becomes wealthier, but there are a large number of opportunities to work together with India requiring small and shrinking amounts of foreign assistance over time.

A new Republican administration would do well to heed the following:

  • Science and technology. Much has been written about the Indian Institutes of Technology, one of which was funded and set up by the United States in the 1960s through USAID funding. There is a strong desire to link scientists and leverage India’s lead in what is called “frugal innovation” (which means solving problems in poverty-based contexts, such as selling consumer goods in smaller/cheaper ways than traditionally imagined). The Obama administration, to its credit, is working this area with enthusiasm (I note as a good start the new innovation fund set up in December through USAID).
  • Agriculture. Norman Borlaug, one of America’s least famous (in the U.S.) Nobel Peace Prize winners, is a revered figure in India because of the USAID-supported Green Revolution of the 1960s that dramatically increased agricultural productivity in South Asia and helped feed hundreds of millions of people. India still has agricultural challenges, but is ready and willing to engage with the U.S. in third countries on agriculture. We should take them up on this.
  • Democracy Promotion. India is the largest democracy. It is often described as having “too much democracy.” At the same time, India is an ideal partner for any number of democracy promotion projects in third countries. We are only just beginning to identify opportunities here. In a future administration with a more outspoken Freedom Agenda, we should be looking to bring India and others in on a more strategic basis.
  • Economic Integration. India has massive energy and raw material consumption needs. India’s needs are a part of the bigger South Asia equation including China, Afghanistan, Iran and elsewhere. Engaging India in the greater South Asia challenges is a U.S. priority, but continues to be stymied by the Indo-Pak dysfunctional relationship.
  • Free Trade. Taking the long view — the United States is a long way away from a free trade agreement with India partially because of the closed nature of the economy. However, technical discussions have begun between the U.S. and India on a “Bilateral Investment Treaty,” which is sort of a starter free trade agreement. The U.S. should watch if the British are able to establish a “free trade agreement on services” because the UK is the largest foreign player in services. If that takes hold, the U.S. could follow if we made it a focus over two presidential terms.
  • Overseas Indian Community. “OICs” are going to be the new Irish or Italians in U.S. domestic politics — loved by all and very invested in their home country. The Obama administration has invested a lot in what they can offer in terms of expertise and appetite for investment and engagement, but much more could be done to help provide brokering, convening, training and seed capital. Small amounts of money will go a long way in India and will be recognized at home.
Article Published in on January 24, 2012.

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