India’s growing international clout

India, once the jewel in the crown of the British Empire, became independent in 1947. Three years later, the country adopted a new constitution, following America’s example in rejecting a monarchical system in favour of a republic. That event is now celebrated every year on January 26 as Republic Day, with all the pomp and pageantry that one associates with India.

And on each Republic Day, the government carefully chooses a foreign dignitary as a guest of honour. Quite a few illustrious names have had the honour. This year’s guest was Barack Obama, president of the most powerful ex-colony of all.

And so earlier this week, the leader of the world’s most populous democracy welcomed the leader of the world’s most powerful democracy. Obama was the first U.S. president to be the chief guest for this peak national celebration, the only U.S. president to visit India twice while in office, and the first Republic Day chief guest under Prime Minister Narendra Modi (a politician who had been conspicuously denied entry to America for a decade while under general Western ostracism). Indeed, Modi broke from protocol to greet Obama at the airport in person.

Obama’s visit was as deep in concrete deliverables as it was in symbolism, setting the stage for a transformative up-shift of the bilateral relationship from Cold War-era “estranged democracies” to “engaged allies” of this century, if without a formal alliance pact.

The most important of these outcomes was the decision to overcome the hurdles that had stymied the last historic breakthrough – the bilateral civil nuclear cooperation deal.

That deal, signed in October 2008, had come about after President George W. Bush reversed the long-standing nuclear isolation of India to launch negotiations in 2005. India agreed to separate its civil and military nuclear programs in exchange for full civil nuclear cooperation with the United States.

This was quickly followed by a new safeguards agreement with the International Atomic Energy Agency (IAEA) and an India-specific waiver by the Nuclear Suppliers Group (established in response to India’s first nuclear test back in 1974).

But in August 2010, India passed a stringent Civil Liability for Nuclear Damages law permitting the operator of a nuclear power reactor to sue the supplier in case of an accident. Indian, U.S. and other foreign companies strongly objected to this and no supply agreement has been signed as a result.

Now India, while maintaining the law, has agreed to set up an insurance pool from domestic sources and to provide a legal memorandum exempting suppliers from general tort claims – a market-based and innovative solution to the seven-year impasse. The fine print on this is still to be worked out, but, given the high-level political engagement, a legally watertight document will presumably be concluded. For its part, Washington has dropped demands for U.S. tracking of U.S.-supplied equipment and materials on top of IAEA inspections.

In addition, the Delhi Declaration of Friendship envisions more frequent high-level exchanges, while a Joint Strategic Vision for Asia-Pacific and the Indian Ocean region puts Washington’s seal of approval on India’s new willingness to be visibly active in a security role in the region. The two countries will cooperate in defence production under a renewed ten-year framework agreement in countering terrorism and piracy, as well as on clean energy, climate change (although a deal comparable to the U.S.-China agreement proved too elusive), trade, intellectual property rights and other benchmarks.

In other words, Modi is betting on Washington being crucial to India’s future growth and development as a market and a source of investment capital and credit, technology, and defence supplies. Obama is betting on India’s continuing rise and a partnership that, if consolidated and properly managed, will help both countries adjust to and indeed shape the emerging multipolar order in Asia and across the world.

However, this bonhomie will quickly revert to suspicion if Washington foresees India as a pliant client-state ally, or if the Indian elite succumbs to habitual suspicion of U.S. motives and intentions. They should cooperate where they can and be mutually respectful of differing priorities where policies diverge, not lecture each other reproachfully.

Both political cultures are guilty of self-justifying rectitude that grates on others. Both executives are hostage to multiple points of opposition, as well as equally noisy and boisterous democracies. But both are also capable of articulating inspiring visions and mobilizing national will to realize them.

No doubt the role of the three million-strong, politically organized and savvy Indian diaspora in the U.S. (increasingly affluent and influential in the domestic U.S. political jostling) will be especially critical in providing ballast to, and intermediating, New Delhi-Washington differences.

India’s geopolitical weight and its critical role in promoting common strategic goals may not yet have registered on mainstream U.S. media consciousness. It should.

An earlier version of this article was published with the Australian Institute of International Affairs. Akhilesh Mishra, Consul General of India, will be discussing the historic election of Narendra Modi and its impact on the Indian economy at a CIC Toronto Branch event on January 28.