Home Finance Does Increasing US Cooperation Risk Damaging India’s Relationship with China?

Does Increasing US Cooperation Risk Damaging India’s Relationship with China?

by internationalbanker

By Hilary Schmidt, International Banker


In June, India’s prime minister, Narendra (Damodardas) Modi, enjoyed what has been heralded as a hugely successful, productive and amicable visit to the United States, during which he held bilateral talks with US President Joe R. Biden. This was his sixth trip to the country since being first elected to power in 2014, but the first in which he was honoured with a state dinner. India’s prime minister was given the full red-carpet treatment by his American hosts, who have sought to forge stronger relations with India and possibly even peel it away from the Eastern sphere of influence commanded by Russia and China. With the geopolitical chessboard having been shuffled considerably over the last 18 months, such moves are to be expected. But while India might revel in all the bells and whistles offered by its Western friends, does this necessarily have to come at the expense of its strong relationships with its Eastern partners?

“We face an inflection point, one of those moments that only come around every several generations, when so much is changing…technologically, politically, socially, and environmentally that the decisions we make today are going to determine our future for decades to come,” Biden remarked during his speech welcoming Modi on US soil. “And as democracies, we can better tap into the full talent of all of our people and attract investments as true and trusted partners, as leading nations, with our…greatest export being the power of our example.”

And it would appear that technology is now at the heart of India’s growing ties with the United States, with Foreign Secretary of India Vinay Mohan Kwatra noting that cooperation in this particular field—specifically under the framework of the United States-India initiative on Critical and Emerging Technology (iCET) across several key areas, including tech transfer, tech trade in products and services, tech capacity building, and tech co-production and research—is proving the biggest takeaway from the trip. Washington wants the US-India relationship 2.0 to be centred on “critical and emerging technologies [as] the pillar of our next-generation partnership to ensure that these technologies promote and protect our values, remain open, accessible and trusted, and secure,” Biden also noted.

But what does that mean in practice? It seems the “secure” aspect is most interesting to the US, with India increasingly viewed as a crucial and trusted partner for its expansive military ambitions. In particular, the India-United States Defense Acceleration Ecosystem (INDUS-X), which falls under iCET, is a newly designed framework not only meant to help advance the Indian military’s technological standards but also to integrate India more significantly into the U.S. Indo-Pacific Command (USINDOPACOM) defence network, particularly in the Indian Ocean Region (IOR). Such joint initiatives will also have the added objective of drawing India away from Russia’s influence, especially when purchasing military equipment. As the largest arms importer in the world, India depends heavily on Russia as a supplier of military equipment; indeed, 90 percent of the Indian Army’s total military inventory in 2022 was estimated to have come from Russia.

And while Washington may feel a renewed sense of optimism over just how much influence it now has on Delhi, the steadfast relationship between India and Russia that stretches back decades and continues to thrive today means it will be impossible for the US to play spoiler and weaken this friendship. India itself has also reaffirmed its unshakeable alliance with Russia on several occasions. “We have made our own evaluation over the years regarding the importance of this. It is a mistake to dumb down ties with Russia to just defence dependence. We have an upswing in the economic part of our relations with Russia,” India’s minister of external affairs, Subrahmanyam Jaishankar, recently said.

Indeed, that “upswing” can be no more clearly exemplified than by the figures revealed on June 21 showing that India’s purchases of Russian oil in May had hit a record high of around 1.95 million barrels per day (bpd), much of which was acquired by Indian refineries for both the domestic and European markets. The data also showed that Russian oil accounted for a hefty 40 percent of India’s total crude imports in May, while its imports from Iraq and Saudi Arabia fell to multi-year lows. Given the substantial market discounts India has received from Russia since Moscow was hit with a barrage of economic sanctions following its invasion of Ukraine, the South Asian nation looks set to continue enjoying an attractive landed price for importing vast quantities of Russian oil.

Although the US charm offensive on India is unlikely to achieve any meaningful gains in influencing its Russian relationship, it should be stressed that this has not been Washington’s primary objective. Rather, much of the focus on blooming US-India ties lies squarely on deterring China, particularly regarding its economic dominance throughout the Asia-Pacific (APAC) region. “This visit is not about China,” US National Security Adviser Jake Sullivan insisted in an interview with reporters recently. “But the question of China’s role in the military domain, the technology domain, the economic domain will be on the agenda.”

The India-China relationship has been complex in recent years and sometimes acrimonious, particularly with deadly fighting emerging along the Himalayan border between the two nations and India also banning hundreds of China-owned apps from operating in the country, including TikTok, and 5G services from industry giants Huawei and ZTE. Perhaps most noticeable is India’s conspicuous absence from the Belt and Road Initiative (BRI), China’s hugely ambitious project to advance emerging economies’ infrastructure needs and economic developments worldwide. With around 150 countries now signed up, India’s resolute refusal to join the BRI suggests that its relationship with China could be improved. And with India being a member of the Quadrilateral Security Dialogue (QSD, or simply The Quad) along with the US, Japan and Australia, which is targeted at containing China, further opportunities for US-India security cooperation against Beijing are bound to be presented.

What’s more, Indian public opinion of China is currently at its lowest level in decades, which, in turn, opens a window for the US to capitalise on the discord and ultimately cultivate India as a strong anti-China bulwark in the Asia-Pacific region. “In Washington, the hope is to build out an extended framework of deterrence to try and keep China in check,” Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace, recently explained to The Guardian. “Both geographically as well as strategically and economically, India has become a linchpin in this framework.”

“The big question now is: How will China assess India’s tight embrace of the US? China will conclude that normalisation of relations with the Modi government will not be possible since India has sacrificed its strategic autonomy to accommodate US military interests in the IOR [Indian Ocean Region],” Pravin Sawhney, author of THE LAST WAR: How AI Will Shape India’s Final Showdown With China, wrote in a June 26 article for Indian news and opinion outlet The Wire. “Worse, India has become the US’s first line of offence against Chinese interests and infrastructure in the South Asian region (by denouncing its Belt and Road Initiative as a debt trap). Moreover, in cahoots with the US, India will be seen to threaten China’s commerce and trade worth over $4 trillion annually, which passes through the 3,000 nautical miles [of] IOR from the Strait of Hormuz to the Strait of Malacca. This, at a time when the Chinese deterrence in the IOR is a decade away.”

And yet India is also a member of BRICS (Brazil, Russia, India, China and South Africa) and the Shanghai Cooperation Organisation (SCO), two largely economic multilateral initiatives that seek to boost cooperation between member nations. Both groups are dominated by China, largely through its sheer economic might, but India’s significant participation and contributions suggest that relations with its northern neighbour remain at least moderately healthy for the time being and could solidify further in the coming years.

India itself, however, insists that its foreign policy remains one of non-alignment, whereby it seeks friendship with all and enmity with none. “It’s not in our interest to be tied down to exclusive relationships…because we have a tradition of strong ties with Russia, that should not become a burden or an obstacle to an equally strong relationship with the United States,” Minister of External Affairs Jaishankar acknowledged at the end of June. “I do not see our relationships as a kind of zero-sum game…. We are credible today as the voice of the global south. We are also perceived as a very strong democratic power. So, our technology relevance is very important for the developed world.”

Whether that sentiment extends to China, however, remains to be seen—the US will certainly be testing it out sooner rather than later.


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