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India's pockets were empty until recently and it had no military posture, hence India was politely ignored. China had money and military, and hence got respect. Beijing has deposits worth US$1 trillion in U.S. and European banks, about $45 billion in military expenditures every year, and a $1.5 trillion economy -- hence it demands respect and gets it. India's foreign reserves are only $200 billion, with a $1 trillion economy (2008-09) and $20 billion in defense expenditures. All of this wins India some respect, but not a lot.
One good thing going for India is its democracy. With all its shortcomings, it has managed to attain a healthy 9 percent growth rate. This the Western media never stops admiring. They have just begun to consider India as an alternative manufacturing base to China. This talk is not going down well with the Chinese, who have left no stone unturned in grabbing the US$2 billion Intel manufacturing plant, for example. India would have been the natural choice, but the Chinese highlighted India's poor infrastructure and turned the tables on it.
The last 20 years have been China years in the West, partly because of cheap products made in China and partly because the West wishes to keep the Chinese in good humor, lest the Russians become too aggressive. In return, the Chinese ego has gone sky high. Agreed, they have a bigger economy than India, but 62 percent of this economy is exported, leaving very little for domestic use. Also, its trillion-dollar deposits are all mortgaged against foreign direct investment that the United States and Europe have sent to China.
The West also knows that China's aging population, the result of the one child policy, is bad news over the next 10 years. With their agriculture dying thanks to manmade acid rain, the Chinese have created a big problem for themselves. Still they are treated with utmost care.
On the other hand, India is viewed with some understanding and a bit of polity, but this does not extend to high-level consultations or strategic discussions. The U.S. administration is always busy lining up high-ranking official visitors to China, while hardly anyone comes to India unless to complain about one thing or the other. When mid-rank U.S. State Department officials visit New Delhi to finalize the U.S.-India nuclear deal, they expect India to give in to all their arguments before a ton of uranium is sent or a piece of commercial nuclear hardware arrives in India.
The Chinese in 1978-80 trampled all over U.S. laws that had prohibited investment and trade with them since the Korean War. America wished to forget the 30,000 U.S. servicemen who died in Korea. All those bad memories were erased in favor of an opportunistic arrangement to corner Russia. No such luck for India. Hence, India has to feel its own way around in the U.S. Congressional minefield looking for a favor or two.
It will be awhile before things change for India. The stalemate in Iraq and ultimate U.S. withdrawal may hasten the process a bit. The United States will need Middle East oil for another 40 to 50 years and somebody has to safeguard it. After withdrawal from Iraq, and probably from the Persian Gulf, the Americans will find their oil supply line very vulnerable. Hence they will turn to their friends in India to protect the sea-lanes. But the United States is not leaving the Middle East tomorrow or next year or the year after next, hence India's diplomatic breakthrough has to wait. But once the Americans leave they will be gone for good, just like the Crusaders in the 11th century, never to return. Then India's strategic position will dramatically improve.
Forget the War on Terror -- it is a lost cause with Pakistan on the side of the terrorists. NATO will be gone from Afghanistan sooner rather than later. But by then, Pakistan may have suffered the catastrophe of another partition with Baluchistan and the FATA (Federally Administered Tribal Area) raising the flag of independence. Hence, from the U.S. view, Pakistan will not be dependable anymore.
India must use this time frame to boost its GNP to about US$2 trillion by 2017. Merchandize exports have to rise to about $400 billion a year. Also, India should concentrate on luxury brands and let China be the master of everyday brands. India's knowledge and business process outsourcing and information technology services have to earn another $100 billion a year with exports. Defense expenditures by 2017 have to reach about $50 billion. The latter will give India's defense forces significant reach outside its borders. All of this will make India more important than it is today. True, the Chinese will also double their defense expenditures, but they have to clothe, arm and train 2.5 million soldiers as opposed to India's 1.1 million.
For India, permanent membership in the U.N. Security Council is very important. Europe is over-represented in the Security Council. They should forgo one or two seats to make way for India and Brazil. Or the Security Council membership should be expanded along with other overdue reforms.
The hopeless and restrictive U.S. laws on commercial nuclear power, the Nuclear Suppliers Group rules and local laws enacted by member countries should be repealed. The nuclear genie is already out of the bag. Pakistanis sold technology to Iran, North Korea and others who wanted it. Hence the Non-proliferation Treaty is pointless and intimidating. The restrictions on law-abiding counties like India are fruitless. If the spread of nuclear weapons is to be controlled, then Pakistan and its scientists who spread the nuclear scourge should be severely punished. Instead, punishment is meted out to those with exemplary behavior.
India needs the West. It needs money, technology and support to achieve its economic objectives. The next 10 years are crucial. In this period most of the issues that generate negative reporting, especially, these days, poor infrastructure, will be taken out of the equation. If an India-U.S. nuclear agreement is not finalized, it will fade from the scene and India will meet its energy requirements with a mixture of its own gas, supplies from Iran and local coal. In the worst-case scenario, if gas cannot be piped via Pakistan, liquid petroleum gas tankers will carry the gas by sea. This will deny Pakistan its transit fees and strategic stranglehold on India's economy.
Under no circumstances should the growing commercial relations with the West be allowed to deteriorate, however. This is an important last chance for India to achieve prosperity. A prosperous India will find a more amenable West. China is a factor hanging over India's ascendancy, and it cannot be neutralized. It must be contained through a mixture of diplomacy and strength.
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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)
