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Full Text: ‘More Than Geopolitics, There’s Now Also an Economic Basis to Indo-US Ties'

Siddharth Varadarajan spoke to India’s former National Security Adviser Shivshankar Menon about Prime Minister Narendra Modi’s state visit to the US, the deals signed, the politics and economics involved, and China's role in bringing the two nations together.
Former National Security Adviser Shivshankar Menon. Photo: The Wire

The Wire’s founding editor Siddharth Varadarajan spoke to India’s former National Security Adviser Shivshankar Menon about Prime Minister Narendra Modi’s state visit to the US, the deals signed, the politics and economics involved, and China’s role in bringing the two nations together. The following is the transcript of a video interview that was published on June 23, 2023. The text has been edited lightly for syntax, style and clarity.


Joining me to discuss Prime Minister Narendra Modi’s visit to the United States, his talks with US President Joe Biden, his address to the joint sitting of Congress and of course the joint statement issued by the two sides, is former National Security Adviser of India, Mr Shivshankar Menon.

Mr Menon, thank you so much for taking the time for this.

Thank you so much for having me.

And let’s start with the big picture. I don’t want to get too much into the weeds in terms of what the two sides agreed. The joint statement is a very lengthy document, covers all kinds of things. But at the heart of it, I suppose, if you were to focus on what the two sides are emphasizing, is the sort of push on cooperation in critical technology areas, as they call it; a whole host of emerging technologies and fields have been identified. And of course also in the sphere of defence, whether it’s talk also of potential joint production of GE engines for Indian fighter aircraft.

To your mind, what’s the grand bargain in this visit or in this document that the US is trying to strike when it comes to its dealings with India at this time?

I think for both sides, the other is an increasingly important partner in this new world that’s emerging. And I think what you see in the joint statement is a lot of strategic convergence. China is the glue, there’s no question. Both sides are increasingly bothered by what China’s rise means, how China has behaved, but it’s more than that. From an Indian point of view, I think the US is an essential partner in India’s transformation. If we want to build a modern, technologically capable state, then I think you can’t do that if you have bad relations with both of the two biggest economies in the world and certainly the source, the major source of technology in the world is the US today. So, there is that congruence on technology.

From the US point of view – and for me this is the qualitative change that I see. There aren’t very many places where you can actually use technology and manufacture cheaply. Not just, I don’t mean just assembly, but where you can actually find process engineers; find firms which are capable of helping you to produce things cheaply. Producing outside China, when you go to Japan or Korea or Western Europe or America, these are all expensive places to work in. So, India offers more than just the market. It offers, today, since it’s developed and grown and changed so much in the last 30 years… therefore, it offers a place where you can actually start thinking seriously of some co-production; of locating some manufacturing and that’s a thread that runs through the joint statement. If you look at most of these technological things that they’re talking about, ultimately from an Indian point of view, the aim is to produce in India. But, it would mean integrating into global value chains and supply chains, most of which originate one way or the other in the US – or end in the US. So, for me, that’s the big advance, if there is one.

And the deal is simple, frankly. We agree on how the world looks; we’re both worried about the same thing, so you see the reference to the Quad right at the beginning; you see what they both say about the Indo-Pacific; you’ve seen the speeches that they’ve made. But more than the geopolitics I think, there’s now also an economic basis. Because for a long time, it was the politics that drove the relationship, not so much the economic complementarity. But, by bringing high-tech into it, I think you’re now seeing much more. Now, that means both sides have to, I think find a new balance in that economic relationship. It’s not easy because protectionism has risen on both sides. So there is a lot of work still to be done to realise this.

Just so we understand clearly, in the area of defence and critical emerging technologies, part of the political economy of de-risking – if that’s the current trend on the part of the US – is to look for partners which are much less risky than say, of course China, but also Taiwan, Vietnam – places that may be vulnerable to disruption in a way that India perhaps would not be.

Yeah. I think you’re right and for any company that’s looking for a “China plus one” strategy, it’s not necessarily moving things out of China but looking to hedge their bets, then India is a logical place to come and India has been growing. India looks today as a good, as a very good prospect.

The Indian side and the Indian media are very bullish on the prospect of high-tech transfer. There’s been a lot of breathless coverage about the GE engines deal. The GE press release itself speaks of potential production in India. It’s not clear to what extent finally production or joint production will happen and if so, with technology transfer not. Given your experience with how these kinds of agreements work, not just with the United States but also with other partners with whom we’ve done similar things like the Russians, how easy do you think it would be for India to actually accomplish transfer of technology in these kinds of areas?

There’ll always be a very complicated negotiation in all these and the higher the technology, the more closely it’s held, the more sensitive it is. But, I think if both sides are reasonable, they will both find some accommodation and then as they learn to work with each other, it’ll develop. I mean we’ve seen this happen with the Russians in certain aspects of defence technology and we’ve seen that process. As you get comfortable, as you learn to work with each other, you learn more and more about the technology, your own capability and your ability to absorb the technology and to use it also improves. So for me, many of the things mentioned so far in the visit are potential. [US chip manufacturer] Micron [has promised to invest] up to $825 million [in a Gujarat factory]. So, a lot of this is indicating potential lines of advance and if even half of this is done, it would be a huge advance on where we are today, certainly.


So, there is a net gain…


…In the process. It’s not going to be easy; it’s not going to be complete; it’s not going to be everything is transferred. I mean nobody does that. There are commercial interests here as well.

The devil is often in the detail. I mean back in 2005, you were part of the Manmohan Singh government which negotiated the Indo-US civil nuclear deal. There was language in the joint statement of 2005, which to the Indian mind was very clear about what we were agreeing to give and what we were expecting to receive. But the actual negotiations saw a lot of pushing and pulling where attempts were made to claw back and extract more from the Indian side.

And we tried as well. That’s normal. I think that’s the normal business of give and take between states, between countries. But in this case, the interesting thing I think – unlike the civil nuclear [deal], which in India at least is almost entirely government. Unlike that, many of these things that we’re seeing talked about now are with private firms and companies which are used to doing this and know the limits of what they can do. And I think the Indian industry also today is capable of this. You’ve seen what Tata has done with the aircraft industry, with Boeing for instance. So, I think over time, I think we’ve now got to the stage where we can think a little more ambitiously and I think that’s what we’re seeing now.

Right. If I come back to the sort of the larger geopolitical bargain that the US thinks it’s entering into, going back even to 2005. The Bush administration clearly was motivated by or driven by the idea that the rise of China in Asia and the world required some kind of balancing and it was a good proposition to bring India inside the tent in some ways. Clearly, the Biden administration also has the same concerns, perhaps, even heightened concerns given the deterioration in US-China relations. But then you have sceptics or analysts like Ashley Tellis, who say that the US is making a bad bargain. At the end of the day, India will not deliver what the US expects it will. Do you think there is a danger of some kind of mismatch?

You know, I think obviously, both sides are not identical. So, we will have slightly different points of view. I think for the US, China is a much bigger factor in the calculus of the India-US relationship. For India, it’s India’s transformation that the US is very important for. So, also China is a factor but it’s not the factor that the way India’s transformation or development is. So yes, there’ll be some differences. But you know when Ashley Tellis says it’s a bad bet, frankly it depends… bet for what. What are you betting for? I mean it’s not a defence alliance, certainly not. We’re not committed to defending America and America is not committed to defending India. But who asked for a defence alliance? Not us. The Americans never offered one. We’ve never offered one. We’ve never sought one. So, we’re not an ally and when people say, “Oh India won’t fight America’s wars.” Yes, we won’t. We don’t expect America to fight ours either.

But what we do today, if you look we do more military exercises with the US than we do with anybody else; than we’ve ever done with anybody. You look at the kind of interoperability, now that we have all the foundational agreements in place. Now that we’re talking about sourcing, we’re talking about repairing U.S navy ships in Indian shipyards, we’re talking about a level of military engagement and defence cooperation. We’re talking even of sharing underwater maritime domain awareness, through the Indo-Pacific. These kinds of things are significant.

Frankly, to my mind, you are doing with the US everything that allies do, more than many of their allies do with them, short of that Article 5 NATO commitment to defend each other. So, I’m not sure that it’s a bad bet or a good bet. I think the fundamental decision, as Condoleezza Rice said in her Foreign Affairs article before President Bush was elected, that the rise of India is in the US interest and that’s been common through administrations, whether it was the Obama administration… the Bush administration certainly.. but Obama and Trump as well. And now, the Biden administration. I think that conviction remains. If anything, the state of the world makes it even more so.

And I think that’s why you see the bipartisan consensus. That’s why you see the administration going out of its way to make the visit a success in every which way. I mean this is only the third state visit we’ve had, apart from President Radhakrishnan and Prime Minister Manmohan Singh. This is only the third state visit by an Indian leader to the US. That’s big. The second address to joint sessions of Congress and they’ve really gone out of their way.

Prime Minister Narendra Modi addressing the US Congress. Photo: Twitter/@SpeakerMcCarthy

Right. Given the salience of China, you mentioned the reference to the Quad and the very first para of the joint statement. Later on, there’s references to you know, freedom of navigation in the South China Sea. Mr Modi in his address to Congress emphasized, used the pet American phrase, “Free and open in Indo-Pacific.” Do you think going from here on, that say the securitisation of the Quad is more likely? So far India has been a bit reluctant to embrace that dimension. Do you see that happening to a greater extent?

You know a lot of this is in the mind. I mean already the Quad members do a great deal with each other – in terms of maritime security…

At a bilateral level.

Bilateral and some trilateral. [The] Malabar [naval exercise] is more multilateral. Some of the exercises are multilateral. But when you look at where they exercise, what they do, what they exchange, the kinds of intelligence they share… you know that’s a whole quantitative leap over what there was 20 years ago or even 10 years ago. So, if it’s the deterrent effect of what the Quad does, when you say securitisation I, think that’s already there. How much they put in a communique, whether they mention the word China and so on… Frankly, that is, those are matters of detail and depends on… It’s contingent on what you see at a particular moment. But it is already securitised. And the Chinese, in their mind at least – they have already said it’s the beginning of an Asian NATO – see it as a security pact which is aimed at them. So, they respond accordingly.

So, in practice, I think, the securitisation that you’ve mentioned has already happened. Maybe not in the words, not in the expression. But there is more to Quad than just that. It does try and provide public goods, global public goods, by what it’s doing for resilient supply chains, what it did for vaccines for instance and so on. And I think that actually a lot of Maritime security is a public good because everybody benefits.

If I were to invert Ashley Tellis’s concept of a bad bet and ask whether there is a risk in India actually putting itself in a situation of de facto military confrontation with with the Chinese because of groupings like the Quad, because of the US expectation of India being more active in the wider Indo-Pacific region, is there a risk that we go down that path and end up further complicating our relations with China without necessarily getting any tangible benefit of payoff that would help you deal with China? Is there a risk of that?

Theoretically? Yes. But I have two responses to that. One is, it depends on how confident you are of your own ability to deal with the world. If you don’t get anything out of it, after all this… you know, it’s basically an open door, an invitation to collaborate, to gain things. If you choose not to walk through the door, that’s your problem. So, it really depends on your self-confidence and how well you handle this situation and the opportunities that it’s thrown up.

Secondly, India-China relations are sui generis. I mean they have gone… you know, if you look at your trouble with China, it’s not because of the Americans. And if you look at that triangle – India, China and the US. When there are bad relations between China and the US, you’ve had trouble with China; you’ve also had periods when you’ve had a stable, managed relationship. When there are good relations between China and the US, same thing. You’ve had trouble with China; you’ve also had periods when you’ve managed the relationship. So, I don’t see… frankly, when you think of this, if it’s a triangle it’s a very weak triangle. And it’s not a triangle that…

So, I don’t see what you’re doing with the US. If the Chinese are unhappy with what they see India doing with the US and this qualitative step forward in – especially technological and defence cooperation between India and the US – then frankly, they should actually be blaming themselves. What they did in 2020 in Galwan and the progressive pressure on the border and various small things that they’ve done over time to build up pressure and to not address the irritants in the relationship which could have easily been addressed – things like the trade deficit and so on. It was within their power to actually deal with them. So, I’m not so sure whether I would say that there’s a big risk of going that way. Yes, theoretically, there’s always a risk. But it would be the result of your own foolishness and a lot of it would I think be because of the inherent dynamic of India-China relations rather than what the US [has done]. And ultimately, you have to take charge and responsibility for your own relationships. You’re not going to work yourself into a position where somebody else determines what you do.

Right. The other big part that would be watching the Modi visit and the joint statement is Russia, which of course, has its own reservations about the quad but is today preoccupied with Ukraine. Ukraine doesn’t seem to have figured very prominently in the public part of the visit. Of course, there was a reference to it that Joe Biden made in his opening remarks at the press conference. Prime Minister Modi mentions it in Congress but he said he was willing to do whatever it takes, which to my mind is a kind of very general statement and the joint statement also makes a broad reference without getting into specifics. Two parts to my question. Do you feel that Ukraine is not an irritant between India and the US and that, you know, the US has kind of accepted that the two sides will not look at Russia-Ukraine in the identical, in the same way, and secondly how do you think Russia is going to react to the increasing bonhomie, particularly, on the defence side, between India and the US?

Well, you know to my mind, Ukraine is a European problem primarily. And I think for any realist in the US to expect India to take the same attitude and be as involved as the US or NATO countries are in the Ukrainian issue, I think that would be very unreasonable. And as far as I understand, the Americans are always ultimately pragmatic. They might clothe their presentation of foreign policy in various ways, in ideological ways; in principled ways, but basically, they’re pragmatic. And my best example is really our purchase of Russian oil. You see a lot of noise in the media and the Western media and so on. But if India and China were to stop buying from Russia and buy oil from the same places that Western Europe is now buying from, having cut off Russia. Think of where the price of oil would be and think of the strain it would place on trans-Atlantic relations, on the Western alliance itself. Because the Europeans would really… I mean inflation would be through the roof. It’s bad enough already. Which is why sanctions, no sanctions apply to our buying [Russian oil]. It’s legal.

And the US and the Europeans are buying refined Russian oil…

Refined Russian oil from India. And for all the noise that you hear, ultimately the world comes to an arrangement which works best for everyone. I think therefore one shouldn’t overstate… Now, the Americans would be happy if you were close, much closer aligned to them on Ukraine. But I think they understand also. They are realists. And they also know that our ability to actually affect the outcome in Ukraine is very limited, just as China’s is. It’s not as though there’s much that we can do about what’s actually going to emerge out of Ukraine. About the Russian reaction to what they see, I don’t think they’d be happy. But it’s part of an ongoing trend. If in 2005, 80% of our defence imports were from Russia, by 2019 the Russian share was down to about 30%. But it’s fairly solid. I mean that 30%, because of the legacy platforms [like] tanks, fighter aircraft that we still have. So they might not be happy to see us shifting out. We’ve bought more US defence equipment in the last three years than we have Russian. But I think they are also going to be sensible enough to realise that their own capacity to supply right now is limited. They’re stuck in Ukraine. They need what they have and they’ll probably need their own production as well.

The S-400 [missile system] pipeline seems to have gotten clogged.

Seems to have dried up. And I assume that this is part of the readjustment that will happen as a result – not just of Russian actions in Ukraine – but also of the general readjustment that we see. In fact, what we’re seeing now is a rebalancing in Asia as well. And it’s not because of Ukraine so much as the larger issue of people reacting to China’s rise and China’s behaviour. And it’s not only China-US relations determining everything. If you look at Japan, she’s hedging. She’s actually going her own way. So is the Philippines, so are various countries. India also. South Korea suddenly has a very active Indo-Pacific policy. So, for me, you’re watching a much broader realignment where India-US congruence is a very important component.

Right. Do you think the sudden rescheduling… or not rescheduling but the decision to turn the SCO, the upcoming Shanghai Cooperation Summit in Delhi, into a virtual rather than an actual meeting was in some way linked to Indian concerns about American sensitivity?

I have no idea. I really don’t know. I’m out of the loop. I don’t want to speculate on why it happens. It’s very hard to tell.

And G20, upcoming in Delhi, do you foresee a situation where Joe Biden and Mr Putin will be together at the summit? Or do you think one of them will stay away?

In an ideal world, they should all be there. And actually, they should all be talking to each other. And that’s something that is traditional Indian policy you know that. Jaw-jaw is better than war-war. But let’s see, let’s see where it goes. I think there’s going to be a fair amount… I noticed the last line in the joint statement looks forward to Mr Biden’s visit, President Biden’s visit, for the G20 in September.

And Mr Modi is going to go to APEC in San Francisco in November. Mr Menon, you’re a foreign policy analyst so I don’t want to burden you with political questions. But in the run-up to Prime Minister Modi’s visit, President Biden received a letter from 75 members of Congress expressing concerns about the US giving a pass to Mr Modi for violation of you know, press freedom and minority rights and to the extent to which the US does foreground shared values and the importance of democracy. The D-word figures very prominently in the joint statement and in various other things that President Biden said. He was asked to make sure that he raised some of these concerns. Clearly, publicly nothing has happened. Mr Biden at the press conference was pretty guarded when he was asked to direct question…

He said he had a long discussion on democratic values.

Yeah. It was a very broad and sweeping statement where he said India and the US, both share democratic DNA.

And we had a big discussion on democratic values or something.

We had a frank… You know, there’s a phrase used in the last two or three years. But privately, we don’t know what might have happened. Give us your sense of how this issue might be playing out in the US policymaker’s mind. Is it something that they reckon they just don’t need to factor in or is it something that they do feel they need to talk to Mr Modi about?

Judging by the way the administration has gone out of its way to boost this visit… it seems to me that they’ve made a clear choice. That they’ve muted the D-word as it were and that factor. That can’t be based on just a gut feel. I mean, because both leaders face an election next year and clearly, they’ve come to the conclusion that a stronger relationship, a visible partnership and this support for each other is going to play well in the domestic political constituencies. They’re both politicians and they’re both pretty consummate politicians, I mean as they’ve proven. So, as I said, the US foreign policy establishment, to my mind, has always been pragmatic and realistic rather than driven by ideological or principled considerations. In fact, it’s when they have been driven by ideology that they’ve gone wrong.

Now, you know on both sides you will find people criticising the other’s democracy and… But it seems to me that flawed or not flawed, both democracies I think are still works in progress. And ultimately, we have to decide for ourselves. We have to settle our issues ourselves, just as the Americans have to settle their issues. I don’t think the Americans are going to let that get in the way. I mean Ukraine was hardly a wonderful democracy and yet that hasn’t stopped the US from committing itself and they have good geopolitical reasons to do so.

Prime Minister Narendra Modi and US President Joe Biden at the White House, in Washington, DC on June 22, 2023. Photo: PIB

So just as Prime Minister Modi bet on Donald Trump getting a second term when he said, “Ab ki baar, [Trump] sarkar” at that rally. Is Joe Biden or the US system making a bet that come 24, they expect Narendra Modi to be back in the saddle and that they want get in, to make sure that they’re in on the ground floor?

They’ll never say so but by the behavior, it would appear to be so.

On that note, thank you very much for joining us.

Thank you very much. Thank you.

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