Tracing the arc of American ‘exception-ism’ for India 

Tracing the arc of American ‘exception-ism’ for India 

U.S.-India bilateral ties have grown for the past 25 years due to America’s unprecedented exceptions for India — from the nuclear waiver in the 2000s to the transfer of technology in 2023

The growth of the relationship between India and the United States is often traced from its nadir 25 years ago, when the U.S. imposed sanctions against India (and Pakistan) after they tested their nuclear weapons in May 1998. Since then the arc of the relationship between India and America has grown year-on-year, some years more than others, built by five American Presidents (Bill Clinton, George W. Bush, Barack Obama, Donald Trump, Joe Biden) and three Indian Prime Ministers (Atal Bihari Vajpayee, Manmohan Singh, Narendra Modi) over the first two decades of the 21st century. While the Clinton-Vajpayee-era gave impetus to summit-level diplomacy in the relationship, the Manmohan-Bush and Manmohan-Obama relationship highlighted nuclear diplomacy and Modi-Obama and Modi-Trump worked on trade and military diplomacy.

After his visit to Washington in earlier this June, Mr. Modi’s meetings with Mr. Biden during his state visit to Washington have led to the two nations forging ahead with technology diplomacy, including the unprecedented new promise of Transfer of Technology (ToT) from the U.S. as a result of the Memorandum of Understanding between General Electric (GE) Aerospace and Hindustan Aeronautics Limited (HAL) “to produce fighter jet engines for the Indian Air Force”.

For India, the rapidly rising arc of ties has been seen in terms of shrugging off what Mr. Modi in 2016 called the “hesitations of history” and of renouncing the government’s Cold War muscle-memory in Indian foreign policy towards the U.S. The more important arc, however, is the shift in the U.S.’s belief in “American exceptionalism”, to a more pragmatic era of “American exception-ism for India”. In other words, it is the U.S.’s decision to make a series of exceptions specifically for India in the first quarter of this century that has been responsible for the big surges in a relationship billed as the most “defining partnership of the century” by Mr. Obama (2009), and Mr. Biden (2023).

The civil nuclear deal

In 1998, just six months after the U.S. imposed sanctions on India mandated by the Arms Export Control Act, in November, Mr. Clinton signed a waiver to the sanctions on both India and Pakistan. The Bush administration’s push for civil nuclear exemptions, resulted in the India-U.S. Joint Statement in 2005, a waiver under the Non-Proliferation Act, the Henry Hyde Act and the 123 Agreement with India, which also led to an India-specific exemption at the Nuclear Suppliers Group in 2008. The Obama visit to Delhi in 2010 saw a breakthrough in implementing all the waivers of the previous decade to make another set of exceptions for India on export controls and high technology trade and transfers under the U.S. Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR).

The significance of all these exceptions was that they were made despite the fact that India never joined the Nuclear Non-Proliferation (NPT) Treaty regime; nor did it sign the Comprehensive Nuclear-Test-Ban Treaty. More importantly, these were “India-specific” waivers not available to other non-NPT countries such as Pakistan, and were crucial indicators of the shift in U.S. alignment in South Asia.

The Russian angle

Over the past decade, the U.S.’s waivers have been on regulations dealing with Russia, such as the Countering America’s Adversaries Through Sanctions Act (CAATSA) of 2017. The Trump administration avoided sanctioning India for the (Russian S-400 missile system, but sanctioned Turkey and China for the same purchases. In 2022, the U.S. House of Representatives passed the “[Ro] Khanna amendment”, which if made law, would exempt India entirely from CAATSA sanctions.

In the wake of the Russian war in Ukraine, the U.S. has ruled out secondary sanctions against India for its considerable oil imports or defence engagement from Russia. This is indeed an exception, given that Mr. Biden ordered sanctions in 2022 on even German entities for the Nord Stream 2 pipeline.

Finally, there are the International Religious Freedom Act exemptions the U.S. has accorded India for the past four years. Despite repeated recommendations from the U.S. Commission on International Religious Freedom to place India on a list of “Countries of Particular Concern” which includes China, Russia, Iran, Saudi Arabia, Pakistan and Myanmar, the State department has not complied.

It is pertinent to note all these exceptions have been made for India, despite its disavowal of ever becoming an ally, or alliance partner, and in spite of its strong ties with U.S. adversaries such as Russia and Iran.

The exceptions have come without India accepting conditionalities on cutting ties with these adversaries, withdrawing from groupings such as the Shanghai Cooperation Organisation or BRICS (Brazil, Russia, India, China and South Africa) that pose a challenge to the U.S.-Europe world order, or of any commitments to join U.S. military operations against them. And they have been granted even though very few commercial contracts have fructified for U.S. companies (nuclear power plants, fighter jets, weapons systems) thus far.

A perspective

Why has the U.S. institutionalised such a broad based waiver policy for India over two-and-a-half decades? The first reason is obviously the promise of ties with India: the world’s most populous nation, that has been an inclusive, pluralistic democracy for most of its history as a republic with a record in non-proliferation. Where there are concerns on these issues, the U.S. calculation is that expressing them is unproductive. In Mr. Obama’s contentious interview to CNN last week, he said that he dealt with Chinese President Xi Jinping and Mr. Modi on the Paris climate accord despite concerns on “authoritarianism”, due to their size. Second, there is India’s attractiveness as an economic market and a military buyer. Third, there is India’s geography in Asia, and its boundary problems from Beijing, that could make it a more dependable partner than European allies in providing a counter to China. Fourth, both Mr. Biden and Mr. Modi acknowledged the Indian-American diaspora, that has distinguished itself as a professional, law-abiding, prosperous and unproblematic community, and is the biggest votary of better India-U.S. ties.

Paradoxically, the biggest challenges to this relationship’s untrammelled arc lie precisely in the mechanism used to strengthen it: the exceptions made for India, which can be reversed at any time. Former close partners of the U.S., such as Pakistan, Egypt, Turkey, Saudi Arabia and even China, today complain about the “fickleness” of American foreign policy towards them. Second, despite India’s growth story, the relationship remains largely one-directional on issues such as investment, hardware or technology transfer, and thus require the U.S. to “give” and India to “take” more than the other way around, at a timetable decided by the U.S. The GE-HAL deal, for example, took more than 13 years after the U.S. had in principle cleared India’s access to high-tech transfers; the next big leaps in high-tech co-production, clean energy transitions, semiconductor technology, and Artificial Intelligence will also go on a case-by-case basis, at an unpredictable pace. The geopolitical context of ties, driven by a desire to counter China, or rein in Russia is also essentially an American construct, not one followed by India. A quantum leap in U.S.-India ties will then follow, not from exceptions that become the rule, but by a change in the rules themselves, that would transform a series of transactions into a relationship between partners equally respectful of each other’s strategic autonomy.

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