The Telegraph
Since 1st March, 1999
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- The nuclear deal is not the symbol of successful Indo-US relations

It is unfortunate for India's potentially robust long-term partnership with America that the nuclear deal between the prime minister, Manmohan Singh, and President George W. Bush has become the most important symbol of relations between India and the United States of America. The status acquired by the deal ' of a touchstone for bilateral relations ' is obscuring important progress in ties between New Delhi and Washington in significant areas other than nuclear energy.

America's top executives, for instance, are increasingly finding out that their experience in dealing with India ' when things were far less rosy in the country than they are today ' can be a huge advantage on their r'sum' while negotiating top jobs in US conglomerates.

Take Jim McNerney, who took over as chairman of the board, president and chief executive officer of the Boeing Company, America's number one export giant, ten months ago. Boeing has big plans for India: not just in selling commercial planes to Indian flag carriers, but in the emerging Indo-US defence relationship. And McNerney's earlier experience as president of General Electric Asia-Pacific and his role in successfully promoting GE's Indian operations had something to do with his choice as Boeing's CEO and president.

GE's revenues in India are now about $700 million ' and will rise to $3 billion by 2008 ' at a time when more and more American companies that operate globally are no longer in the pink of financial health. Although a lot of the credit for GE's multi-faceted India operations ' which are seen as a model for other multinationals seeking a slice of the Indian pie ' have gone to Jack Welch, the company's former CEO and Scott Bayman, GE's country head in India for 13 years, corporate insiders in America say that GE's Indian success owes a lot to McNerney. He was one of the first Americans outside the US government to personally congratulate Manmohan Singh shortly after Singh and Bush announced their landmark nuclear deal at the White House on July 18, 2005.

Many Indians, including Singh and the finance minister, P. Chidambaram, who are globalizers, can learn much from how Americans combine statecraft and promotion of their country's economic interests. It was no accident that McNerney was one of the invitees to the rare state dinner that Bush hosted in honour of Singh during his visit to the White House with a seat at a specially high profile table. Nor was it by chance that two other guests at that dinner were Jeffrey Immelt, the CEO of GE, and Bob Stevens, the chairman and CEO of Lockheed Martin.

These three American companies have a lot to gain from the opening up of Indo-US high technology trade, including trade in civilian nuclear equipment, defence cooperation and joint ventures in space between Washington and New Delhi, indeed, in any strengthening of a strategic partnership between India and America. And these giants of American industry, with support from the US government, are working overtime to leave their international competitors behind in the race for Indian business.

But it required a three-day visit by this columnist to Boeing's secure and protected Integrated Defence Systems headquarters in St. Louis, Missouri, together with numerous briefings, to comprehend the extent to which the changing pattern of Indo-US government relations was also changing the way Americans look at India. In St. Louis, in America's midwest, where Boeing is the second biggest employer, India is no longer the land of snake-charmers and cow-worshippers. From the pin-stripe-suited business executive smoking rare, pre-embargo Cuban cigars and sipping premium cognac at the Ritz Carlton's Cigar Club to the taxi-driver who was an illegal immigrant not long ago, India is the latest flavour in St. Louis. Word that India may be about to order 126 multi-role combat aircraft has many Americans there wide-eyed in disbelief. Because if that happens, and if the order goes to a single manufacturer, it will be the biggest military aviation deal in history.

But it is not just the MRCA procurement that is giving India leverage in the military-industrial complexes in the US, Russia, France, Sweden and several other European countries, which are in the competition for orders from the ministry of defence in South Block. A month ago, Boeing submitted a separate proposal to develop and deliver eight long-range maritime reconnaissance and anti-submarine warfare aircraft to the Indian Navy. Under this proposal, Boeing is offering India a variant of its P-8A multi-mission maritime aircraft, which is currently in development for the US navy. The Indian navy has already concluded another agreement to train its naval pilots in Kingsville, Texas, on American T-45TS aircraft.

All of which provides in equal measure an insight into India's projected rise as a global power and American projections on where India fits into Washington's strategic thinking. For close to a decade, the Indian Navy has more than hinted about its ambitions, its plans for littoral undersea warfare capability, intelligence, surveillance and reconnaissance. But on the assembly line for the T-45 training system aircraft in St. Louis, one gets a coherent picture of how such plans are taking shape.

India and the US are at two ends of the globe, but a common destiny, more important than defence, has brought them closer in recent years. The Asian tsunami in 2004, for example, brought home to both Washington and New Delhi the reality that when a disaster of that magnitude strikes Asia, there are not many countries which can swing into action to deal with it. It was noted in Washington that India's navy was ahead of everyone else in reaching relief to Sri Lanka and the Maldives: it also helped the Indonesians to partly cope with the tsunami disaster.

On India's part, its naval officers who were subsequently stationed for some time at American installations in Thailand and in the US for the first time got a first-hand idea of the potential of the US navy for disaster relief. A common vision for future cooperation that was not strictly limited to warfare emerged from the joint effort to deal with the tsunami.

If India opts for the American P-8A MMAs to replace its ageing Russian IL-38 and TU-142 maritime aircraft, it will signal the navy's desire for maximum interoperability with the US navy as they together look towards joint operations in the Indian Ocean in future. It is for the same reason, especially in the area of joint disaster management, that India may consider American Chinooks to augment its medium-lift capabilities on a global scale in the long run. As Boeing and other companies from western Europe and Russia respond to an Indian request for proposals to meet its requirement of 126 MRCA, New Delhi may be tempted to put its desire for a safe passage of the Indo-US nuclear deal in the US Congress above all else as a consideration in giving the order to the Americans. Surely, it will persuade Boeing, GE and others to lobby hard in Washington on India's behalf.

But what India needs to do, instead, is to get the best bargain for its defence agreements on a standalone basis, excluding considerations such as the nuclear deal. If India strikes any deal with the US on the T-45 planes for its aircraft carrier, it must work out a deal that will augment and upgrade India's own ongoing production of Hawks: the T-45s are a derivative of the British Hawks, a variant of which is made in India.

Similarly, any purchase of F-18 Super Hornets must involve a supply chain, which mandates production of spare parts in India. The biggest deal in the history of military aviation does not happen every day. Those Indians who negotiate with the Americans must do so knowing their strength and with the full realization that all the bargaining chips are on their side of the table. But that is possible only if the political leadership in New Delhi stops looking at the nuclear deal as the symbol of successful Indo-US relations.

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