The U.S. Needs to Modi-fy Its India Policy

How Washington should engage with India’s new prime minister.

Kevin Frayer/Getty Images
Kevin Frayer/Getty Images

India has just voted the Bharatiya Janata Party (BJP) into power in a big way, putting Narendra Modi in office as prime minister. Modi is a pragmatist, focused on economic growth and good governance. But he’s also a polarizing figure, under whose watch bloody Hindu-Muslims riots occured in 2002 in Gujarat — leading the United States to deny him a visa in 2005. Although Modi has been exonerated by the Indian legal system, his past, coupled with concerns among the Indian and global human rights community, presents challenges for U.S. engagement. But the U.S. relationship with India is too important to allow drift to set in. Washington should meet Modi on pragmatic ground, and reframe the relationship in practical terms of mutually beneficial cooperation.

Modi spent most of his professional life in the Rashtriya Swayamsevak Sangh (RSS), or National Volunteers’ Organization, a conservative Hindu nationalist organization, and hails from a subordinate caste group, yet he rose from chief minister of Gujarat to prime minister in under 15 years. His political rise represents a story of merit unencumbered by disadvantages of birth. But he has become indelibly associated with the tragedy of the 2002 Gujarat riots, where intra-communal violence led to the death of more than 1,000 people, mainly Muslims. At best, Modi was seen as not acting quickly or decisively enough to prevent the mayhem; his detractors accused him of fomenting it.

Investigations that stretched over many years in India’s notoriously slow-moving legal system left open questions about his culpability. In 2005, concerns about his role led to a U.S. decision to deny him a visa under a U.S. law concerning religious freedom. However, in 2012, a report commissioned by the Indian Supreme Court found “insufficient evidence” to hold Modi responsible for the riots, and on December 26, 2013, an Indian court delivered a judgment that ended a case against him for lack of evidence. Of course, as prime minister, Modi is eligible for a diplomatic visa; on May 16, President Barack Obama called to congratulate Modi on the BJP’s win, and invited him to visit Washington “at a mutually agreeable time.”

Meanwhile, Modi began to develop a reputation as a get-things-done, no-nonsense chief executive. He focused intensively on Gujarat’s economy, ending the Indian endemic red tape. Against the backdrop of a slowing Indian economy and a difficult trade and investment environment, Modi’s reputation for running a clean, corruption-free operation further distinguished him from the graft scandals emanating from other corners of the country as well as India’s central government.

Modi’s economic policy successes rehabilitated his reputation even before his legal situation fully resolved, leading to what the writer Gurcharan Das called a “moral dilemma.” He was good for the economy, but was Modi good for society? Does Modi’s vision of India favor the Hindu majority and eschew the idea of India as unity-in-diversity, forged through a composite heritage of many faiths?

It’s the latter question which will create some challenges for the United States and India under Modi. As the United States and India built a new relationship over the past 15 years, one of the claims for the relationship concerns the shared values of the two multi-ethnic, multi-religious, secular democracies. While he has been legally cleared in India, Modi has never formally apologized for the riots. Many Indians and some Americans worry that his background in the RSS and his views of India as a homeland for Hindus may portend a Hindu-first approach — creating a chilling effect for India’s minorities, and moving India away from the celebration of diversity.

At the moment, these concerns remain speculative. Modi’s national campaign focused on growth and governance. He has publicly denounced extreme anti-Muslim statements proffered by some of his supporters. And the last period of BJP governance at the federal level, from 1998-2004, offers an instructive precedent. Though the BJP established themselves as a national force in the early 1990s through appeals to religion — such as a truck kitted out like a chariot of a Hindu god for a campaign about temple-building — their term in government was marked by a different ethos. Under Prime Minister Atal Behari Vajpayee, the BJP moderated its most extreme wing, further liberalized the Indian economy, and transformed relations with the United States.

This may become Modi’s legacy as well, should he rein in the religious nationalists and keep his own sights focused on his campaign promises of economic growth and surajya, or “good governance.” And this is where Washington can best meet Modi — on the pragmatic common ground important to his administration, and to the United States.

Getting the economics right

Modi seeks to right the wrongs which have slowed India’s growth and kept India near the bottom of the World Bank’s Doing Business index — in 2013, India ranked 134 out of 189, below Yemen. The BJP platform focuses on infrastructure, foreign direct investment, intellectual property rights, manufacturing, and restoring India to its pre-modern-era primacy as a center of global trade. This trade-led political slate represents the best opening in some years to expand economic ties.

And an open trade door in New Delhi couldn’t be more needed. The last three years have been frustrating for the U.S.-India trade relationship — numerous market access, investment, tax, and intellectual property issues have erupted. Congress has initiated a series of reviews on trade barriers in India, and business sentiment in the United States for India went from enthusiasm to exasperation.

India harbors grudges about limits on temporary work visas to the United States, which India sees as a trade issue. It also feels aggrieved by lack of movement on a request to negotiate an agreement on social security contributions.

These complaints and counter-complaints do not have easy solutions. Because India had a planned economy until economic r
eforms began in 1991, there are a larger number of Indian sectors with access limitations than there are in the United States — so Washington has more complaints. The United States has made substantial progress on issues of importance to India over the last five years, such as civil nuclear commerce and export control reforms, but not on temporary work visas or social security contributions. On the other hand, while India has implemented some reforms over the past five years, its occasional introduction of protectionist policies and a seemingly arbitrary retroactive tax policy created a sense of unpredictability. A dynamic has emerged in which Indian observers accuse the United States of becoming too “transactional” by focusing on market problems, and less able to see the big picture of partnership.

The United States can be more helpful by injecting a measure of partnership into the economic conversation with India — and here Modi’s pragmatism provides the opening. The U.S.-India Trade Policy Forum, a cabinet-level formal dialogue, has not met since 2010. Restarting this exchange should be an urgent priority, as should be the completion of the Bilateral Investment Treaty already under negotiation. Washington can leverage Modi’s interest in restoring India’s role as a major trading power by supporting efforts to pull India into the trade groupings involving the United States and Asia, starting with membership in the Asia-Pacific Economic Cooperation Forum (APEC), which promotes trade openness and transparency in a non-binding manner, a good stepping stone for eventually getting India into the Trans-Pacific Partnership (TPP), a major trade initiative.

New Delhi sees the United States developing trade deals across Asia and Europe, and wonders where it fits. Signalling these paths to broadened economic ties will restore confidence in India that the United States has a strategic goal in sight. Getting India on a path towards the hugely important TPP will underscore the priority Americans place on ties with India, on track to become the world’s third-largest economy by 2025. It will also create a more constructive atmosphere in which both governments can continue working on current market-access frictions.

Filling the void in Afghanistan

The U.S. and NATO troop drawdowns in late 2014 create great uncertainty for India. New Delhi fears that once the international presence departs from Afghanistan, the Taliban and related groups — like the Haqqani network or the Lashkar-e-Taiba, both designated terrorist organizations under U.N. and U.S. authorities — will refocus more forcefully on Indian targets.

India has played a critical role providing development and humanitarian assistance to Afghanistan since the turn of the century, emerging as its fifth-largest bilateral donor. It is also the region’s dominant economic power, with companies willing and able to explore opportunities in Afghanistan, and the business knowledge networks to provide trade linkages for a country that desperately needs to develop its own sustainable economy. India stands out as the country most capable of providing ongoing assistance, development partnership, technology transfer, education, and business connectivity appropriate for Afghanistan’s greatest needs. It has also, in response to requests from Kabul, begun to provide security sector assistance such as training, and funding Afghan equipment purchases from Russia.

The United States should begin to consult much more intensively with New Delhi as the drawdown continues, pulling India into conversations akin to those of a close NATO partner. Washington should also focus urgently on the unresolved problem of Pakistan as a terrorist safehaven, including the egregious example of Lashkar-e-Taiba chief Hafiz Saeed — about whom the United States in 2012 authorized an award of up to $10 million for information leading to his arrest — openly holding rallies across Pakistan. Many in India believe that the United States has not focused as much as it could on terrorism in Pakistan, which they see as undermining India’s security.

As the international community’s ability to ensure security in South Asia becomes more attenuated following the drawdown, the United States and the international community must further pressure Pakistan — including through limiting military assistance and rebalancing to a development-led agenda — to prevent terrorist plots from incubating on its soil. Doing so will support India’s role in South Asia’s regional stability, and help allieviate Indian worries about a re-hyphenation of India and Pakistan. It will also be in the best interests of Afghanistan and regional security — and will demonstrate to India that the United States is a reliable security partner aligned with India’s interests.

Papers, please

Visas have emerged as a central friction in the U.S.-India relationship, because New Delhi and the Indian IT services sector sees them as a market access barrier in the United States. This is a shame, because the growth in people-to-people contact has been one of the most successful aspects of the changed relationship between New Delhi and Washington. To keep up with the visa demand over the past decade, the United States has invested more than $100 million into building larger consulate facilities across India; the country is now the fourth-busiest non-immigrant visa-issuing mission for the United States anywhere in the world. Of all the H-1B visas (for highly skilled temporary workers) issued worldwide, 64 percent go to Indian citizens; China is second, with a mere 8 percent. From Washington’s perspective, it’s hard to see how Indians could perceive such a dominant position as constrained by barriers. But it’s also true that the total number of H-1B visas available has shrunk since its high point at the end of the Clinton administration.

The United States should be able to respond to India’s visa concern in a mutually beneficial and pragmatic way. My colleague Edward Alden has argued that the White House should use executive branch authorities to increase the visa cap for the H-1B category, allowing one piece of immigration reform to move at a time when the demand clearly exists.

Washington should also examine more closely the level of scrutiny Indian scientists face when applying for visas to the United States. Science and technology cooperation has become a leading success of the bilateral relationship, but it is not always easy for Indian scientists to receive visas to attend conferences or give lectures in the U.
S. quickly;  processing delays can cause travelers to miss their trip. U.S.-India scientific collaboration is at the forefront of research on clean energy, climate, space exploration and earth observation, among other areas; Washington should encourage and facilitate this critically important component of U.S.-India ties rather than inhibit it.

The U.S. scientific community has been tracking this problem for years, issuing numerous multi-organization letters urging review. The 2009 statement signed by the heads of the National Academy of Sciences, the American Association for the Advancement of Science, the Institute of Medicine, and 28 other leading institutions in the United States indicates that the current policy does not work. The National Academy and its signatories provide several specific steps to alleviate this problem, including reducing repetitive processing for well-known scholars, and reducing the list of sensitive areas.

Fixing these matters would go a long way toward addressing many concerns from India. It would also underscore U.S. interests in seeing a more reciprocally responsive and streamlined visa regime in India for U.S. citizens, enhancing the two-way exchange becoming increasingly common as more Americans seek to study, work, write, research, or volunteer in India.

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As the new Indian government settles into New Delhi, this pragmatic agenda, building on campaign promises critical to India and the United States will reinforce the larger strategic importance of a strong U.S.-India relationship. While the jury may be out for some time on how Modi will govern India, the urgent need to regain a collaborative spirit on the economic front should be at the top of Washington’s inbox. As U.S. withdrawal from Afghanistan proceeds, India should be at the forefront of U.S. consultation to ensure sustainable stability for the region. Finally, given the difficulties advancing comprehensive immigration reform in Congress, there are some concrete steps the Obama administration can take to alleviate several frictions related to visa issues. Each of these would result in meaningful progress for both sides, and would advance U.S. national interests.

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