FOREIGN SERVICE ACADEMY(MINISTRY OF FOREIGN AFFAIRS)ISLAMABAD

34TH SPECIALIZED DIPLOMATIC COURSE(July-April 2014)

INDIA-US STRATEGIC PARTNERSHIP: IMPLICATIONS FOR PAKISTAN

SUBMITTED BY:JUNAID SULEMAN

SUPERVISOR:ZAFAR NAWAZ JASPAL

Word count excluding Preliminaries and Bibliography = 4000

Executive SummaryThe 21st century heralded the beginning of strategic partnership between worlds oldest and largest democracies. Tectonic shift in geopolitics has prodded Washington to court New Delhi as a counterweight to contain China. Motivated by its strategic vision to become a Great Power, New Delhi has sought to transform its relations with Washington.This paper argues that on both sides, high expectations of the relationship have dampened in recent years. Cooperation in economic, defense and political areas has slowed down due to Indian emphasis on strategic autonomy, protectionism, nuclear liability law and bureaucratic hurdles. Notwithstanding its de-hyphenation policy, Washington recognizes that normalization of India-Pakistan relations qualifies Pakistans role in supporting stability in Afghanistan. Growing Sino-India economic ties have restrained New Delhi to confront Beijing. To Washingtons ire, India has supported Moscow in the on-going Ukrainian Crisis. However, common interests and shared values provide a sound foundation to India-US strategic partnership which does not require a Cold War style alliance for its consummation. An open partnership, which considers interests and priorities of both countries, would suffice. Being the only option in the region, Washington has made a long-term strategic bet on New Delhi which explains its boundless patience and its unprecedented efforts to build a constructive relation with its stubborn partner. India-US strategic partnership would exacerbate military disparity between India and Pakistan which would erode mutual nuclear deterrence. It would trigger arms race which would weaken Pakistans economy. Buoyed by American support, New Delhi would pursue a more aggressive policy vis--vis Pakistan. Pakistans stature in American foreign policy calculation would be reduced. US-supported Indian role in Afghanistan would undermine Pakistans security.In order to deal with new challenges emerging from India-US strategic partnership, Pakistan should strengthen itself politically, economically and militarily. It should convince Washington of its constructive role in normalization of India-Pakistan ties. It should work with new Afghan government to check Indian-funded cross-border terrorism against Pakistan. It should consolidate its strategic partnership with China. It should increase economic cooperation with India and collaborate on non-traditional security threats. It should also engage Moscow and Iran. List of Abbreviations

UNSCUnited Nation Security Council NSGNuclear Supplier GroupFDIForeign Direct InvestmentUSTRUnited States Trade RepresentativeWTOWorld Trade OrganizationBITBilateral Investment TreatyEUMA End-Use Monitoring AgreementEEUMAEnhanced End-Use Monitoring AgreementMTCRMissile Technology Control RegimeNPTNuclear Non-Proliferation TreatyIAEAInternational Atomic Energy AgencyTTP Tehreek-i-Taliban Pakistan BLA Baloch Liberation Army

Table of Contents

Executive SummaryIList of AbbreviationsIISection 1: Introduction11.1 Background11.2 Statement of Problem11.3 Literature Review2

Section 2: India-US Strategic Partnership42.1 Indian Objectives42.2 American Objectives4

Section 3: Dimensions of India-US Strategic Partnership63.1 India-US Economic and Trade Relations6 Overview6 Trend7 Issues83.2 Security and Defense Cooperation9 3.2.1 Defense Trade9 3.2.2 Military to Military Cooperation11 3.2.3 Counterterrorism and Intelligence Cooperation11 3.2.4 Space and Ballistic Missile Cooperation123.3 Civil Nuclear Cooperation133.4 Political Dimension13 3.4.1 China13 3.4.2 Afghanistan14 3.4.3 Pakistan14 3.4.4 Iran 15 3.4.5 Russia15 3.4.6 Recent Developments15

Section 4: Implications for Pakistan16

Section 5: Conclusion and Recommendations19

Bibliography 21

I

Section IIntroduction1.1 Background:India and America has figured prominently in Pakistans foreign policy. India and Pakistan share a tortuous history of hostile relations due to territorial disputes and divergent strategic visions. Islamabad has always considered Washington as an equalizer vis--vis New Delhi. A strategic partnership has been forged between worlds superpower and Pakistans belligerent neighboring country which would have far-reaching implications for Pakistan.

1.2 Statement of Problem:Since 9/11, India-US bilateral relations have been on a positive trajectory. Presently, Washington is bolstering India as a Great Power in South Asia which has the potential to emerge as a global power. The cementing relations between India and US would have far-reaching ramifications for regional strategic environment in particular and global politics in general. Pakistan cannot ignore these developments due to its strategic competition with India. The primary objective of the paper is to study the emerging contours of India-US relations and their likely implications for Pakistan.

1.3 Literature Review:Purpose of literature review is to evaluate existing body of knowledge on the topic and to contextualize ones arguments. Essential materials which have been reviewed during the course of this research are presented below:In U.S.-India Strategic Partnership: Shared Vision, Different Prescription, Prem Trivedi argues that though both India and America share broad-brush convergence of strategic visions, particularly with regard to containment of China, they dont see eye to eye on appropriate means to realize the potential of this strategic partnership. Indias reluctance to intervene outside

Subcontinent, its skepticism of Western-dominated multilateralism and its emphasis on strategic autonomy are the main stumbling blocks.[footnoteRef:1] [1: Prem Trivedi, U.S.-India Strategic Partnership: Shared Vision, Different Prescription, Foreign Policy, October 2014, accessed November 7, 2014, http://southasia.foreignpolicy.com/posts/2014/10/30/us_india_strategic_partnership_shared_vision_different_prescription.]

In Opportunities Unbound: Sustaining the Transformation in US-Indian Relations, while appreciating irritants of the relationship, Ashley J. Tellis advocates that Washington should continue to support New Delhi economically and militarily without any demand of reciprocity from the latter because a stronger India fundamentally serves American self-interest in the region.[footnoteRef:2] [2: Ashley J. Tellis, Opportunities Unbound: Sustaining the Transformation in US-Indian Relations, Carnegie Endowment for International Peace, January 7, 2013, 11, accessed November 7, 2014, http://carnegieendowment.org/2013/01/07/opportunities-unbound-sustaining-transformation-in-u.s.-indian-relations.]

In India-US Security Relations: Current Engagement, K. Alan Kronstadt and Sonia Pinto have contended that security and defense cooperation have flourished since 9/11. However, bureaucratic hurdles and Indian stress on defense autarky have stymied progress. The authors recommend that both New Delhi and Washington should take a strategic view of security relations, warding off short-term, transactional approach.[footnoteRef:3] [3: K. Alan Kronstadt and Sonia Pinto, India-US Security Relations: Current Engagement, Congressional Research Service, November 13, 2012, accessed November 8, 2014, http://www.fas.org/sgp/crs/row/R42823.pdf.]

In India: Domestic Issues, Strategic Dynamics, and US Relations, Paul K. Kerr, Michael F. Martin and K. Alan Kronstadt discuss the political, economic and nuclear dimensions of India-US strategic partnership. Though the volume of bilateral trade has increased many folds during last ten years, protectionism and India-US differences along North-South lines have emerged as major areas of friction. Civil Nuclear Deal, 2008 has redefined the relationship but Indian nuclear liability law has baulked its implementation.[footnoteRef:4] [4: Paul K. Kerr, Michael F. Martin and K. Alan Kronstadt, India: Domestic Issues, Strategic Dynamics, and US Relations, Congressional Research Service, September 1, 2011, accessed November 8, 2014, http://fas.org/sgp/crs/row/RL33529.pdf.]

In The Indo-US Strategic Relationship and Pakistans Security, Zafar Nawaz Jaspal is of the view that Indo-US strategic partnership would disturb the strategic balance between India and Pakistan. It would trigger conventional and non-conventional arms race in the region and would lower the nuclear threshold between the belligerent neighbors.[footnoteRef:5] [5: Zafar Nawaz Jaspal, The Indo-US Strategic Partnership and Pakistans Security, SASSI Report 9 (2007), accessed November 8, 2014, http://www.sassu.org.uk/pdfs/The%20Indo-US%20Strategic%20Relationship%20and%20Pakistan%27s%20Security%20.pdf.]

Section IIIndia-US Strategic Partnership2.1 Indian ObjectivesThe principal driver behind New Delhis transformation of its ties with Washington lies in its strategic vision to become a Great Power:1. Washington wields unparalleled influence in global governance institutions. New Delhi seeks American support to enhance its political status in international arena by becoming member of exclusive clubs like UN Security Council (UNSC), Nuclear Supplier Group (NSG), G-8 etc.2. In order to transform its economy, India needs American capital, managerial expertise and technology.3. It wants to build a credible, offensive military force to meet its strategic objectives. American cutting-edge defense industry promises sophisticated military hardware in this regard.4. New Delhi wants to ensure a peaceful neighborhood to facilitate its rise. Being a status quo power, it sees Pakistan as spoiler of regional peace. Thus, it seeks to reduce American political support and military and economic assistance for Islamabad. 5. New Delhi aims to contain China which is disturbing strategic balance in the region and intruding in its traditional sphere of influence. 6. New Delhi wants to project soft power in American society and expands its influence in American policymaking circles by incorporating services of Indian Diaspora.[footnoteRef:6] [6: Mr. Muhammad Syrus Sajjad Qazi, interviewed by author, December 8, 2014. ]

2.2 American ObjectivesThe principal driver behind American pursuit of a strategic partnership with India lies in tectonic shift in geopolitics which challenges its primacy:1. Given Chinas growing assertiveness, America aims to maintain balance of power in Asia which is not inimical to its interests. It envisages India as a potential counterweight.2. Washington considers India as a guarantor of arc of peace and economic prosperity extending from East Africa to Strait of Malacca due to its unique geopolitical location and shared democratic values.3. America considers India to be an economic partner of choice due to its educated middle class, its open economy and market size. It believes that a strong India-US relation will revitalize its stagnant economy by providing trade and investment opportunities. 4. Indian military demands also provide lucrative economic opportunities for American defense industries.

Section IIIDimensions of India-US Strategic Partnership

3.1 India-US Economic and Trade Relations:Overview India is currently Americas 11th largest goods trading partner. The top exports from America to India in 2013 were precious stones, aircrafts, machinery and medical instruments while the five largest American imports from India were precious stones, pharmaceutical products, mineral fuel, chemicals and textile articles.[footnoteRef:7] [7: India, Office of the United States Trade Representative, Last modified: November 15, 2014. http://www.ustr.gov/countries-regions/south-central-asia/india.]

In 2013-2014, total bilateral trade amounted to $96.8 billion. America had a trade deficit of $25.4 billion. Category-wise facts and figures are given in Table no. 1.[footnoteRef:8] [8: Trade News Release, US Department of Commerce: Bureau of Economic Analysis, Last modified: November 15, 2014, http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm.]

For America, education and tourism was the largest services exports to India while outsourcing of jobs by American businesses, especially in IT sector, was the leading services import from India.[footnoteRef:9] [9: Joshua Meltzer, Growing the India-US Trade and Investment Relationship, The Brookings Institution, September 2014, accessed November 15, 2014, http://www.brookings.edu/research/opinions/2014/09/23-india-us-trade-investment-relationship-meltzer.]

American foreign direct investment (FDI) in India was $28.4 billion in 2012, mainly in technical services, manufacturing, and finance and information sectors. India FDI in the United States was $5.2 billion in 2012, primarily concentrated in the professional services and banking sectors.[footnoteRef:10] [10: India, Office of the United States Trade Representative, Last modified: November 15, 2014. http://www.ustr.gov/countries-regions/south-central-asia/india. Note: Latest official figures for investment are available for the fiscal year 2012-13. ]

Table 1: India-US Trade in 2013-2014[footnoteRef:11] [11: Trade News Release, US Department of Commerce: Bureau of Economic Analysis, Last modified: November 15, 2014, http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm. Note: Table is formulated using data from Bureau of Economic Analysis.]

US EXPORT IN GOODSUS IMPORT IN INDIAN GOODSTRADE IN GOODSUS TRADE DEFICIT IN GOODS

22.24264.219.7

US EXPORT IN SERVICESUS IMPORT IN INDIAN SERVICESTRADE IN SERVICESUS TRADE DEFICIT IN SERVICES

13.51932.45.6

TOTAL EXPORTTOTAL IMPORTTOTAL TRADETOTAL US TRADE DEFICIT

35.761.196.825.4

Note: All amounts are in billions of US dollars.

Trend In the last ten years (2003-2013), total bilateral trade had increased by 400 percent with notable 600 percent growth in trade in services. American trade deficit with India has increased to $25.4 billion in 2013, up from $6.3 billion in 2003. It is mainly concentrated in services sector even though the U.S. runs a services trade surplus with the rest of the world. American FDI in India has also increased by 600 percent while Indian investment in the U.S. has experienced 1,400 percent growth since 2003.[footnoteRef:12] [12: Joshua Meltzer, Growing the India-US Trade and Investment Relationship, The Brookings Institution, September 2014, accessed November 15, 2014, http://www.brookings.edu/research/opinions/2014/09/23-india-us-trade-investment-relationship-meltzer.]

IssuesFollowing issues have hampered bilateral trade and investment:

1. Indian disregard for intellectual property protection rights is a major bone of contention. United States Trade Representatives (USTR) Special 301 Report, 2014 placed India on Priority Watch List. Out-of-Cycle Review has been initiated in fall of 2014 which could entail some trade restrictions. America is of the view that Indian Patent Act, particularly its Section 3 (d), may have the effect of limiting the patentability of potentially beneficial innovations.[footnoteRef:13] [13: Office of the United States Trade Representative, 2014 Special 301 Report (Washington DC: Office of the United States Trade Representative, 2014), 40.]

2. Due to investment and trade barriers, Americans have limited access to Indian market especially in agricultural and multi-brand retail sectors. Though Congress government announced retail reform package in 2011, strict conditions have discouraged FDI in multi-brand retail. India has also restricted import of American subsidized agricultural goods which, in its view, would threaten livelihood of its farmers.

3. America sees Indian protectionism as hurdle to global trade liberalization. Both countries have clashed at Doha Round along North-South lines. They have resorted to World Trade Organization (WTO) time and again for settlement of trade disputes. Recently, there was difference between the two countries over Trade Facilitation Agreement. However, an agreement was reached in November, 2014 when America accepted Indian food security concerns.[footnoteRef:14] [14: Statement by Ambassador Froman on US-India WTO Trade Facilitation Agreement, Office of the United States Trade Representative, Last Modified November 30, 2014.]

4. So far, India and America have failed to sign a bilateral investment treaty (BIT). From American perspective, limits on foreign ownership, local contents requirement and technology transfer obligations are the main sticking points. On the other hand, India considers American insistence on enforcement of labor and environmental laws stymieing BIT. New Delhi is concerned that it would be required more to yield in terms of regulatory space and the burden of reform will fall disproportionately on it.[footnoteRef:15] [15: Mathew Stokes, BIT and beyond: Advancing the US-India Economic Relationship, Centre for Strategic and International Studies, November 2012, p.25, accessed November 17, 2014, http://csis.org/files/publication/121126_Stokes_BITandBeyond_web.pdf.]

5. Protectionists have raised hue and cry about deleterious impact of employment of immigrants and services outsourcing on job opportunities for Americans. This has led to passing of an immigration bill by Senate in 2013. Its section 4304 essentially bans companies that employ between 50 to 75% of their workforce on H-1B or L1 visas which includes all Indian IT companies.[footnoteRef:16] As a similar bill has not been passed by House of Representatives, these restrictions are not effective. On the other hand, India has demanded an increase in H-1B visa cap for its skilled labor. [16: S.744, Border Security, Economic Opportunity, and Immigration Modernization Act, 1st Session, 113th Congress, 2013, Section 4304, p. 967. ]

3.2 Security and Defense Co-operation

3.2.1 Defense TradeIn post- 9/11 era, there has been a significant upward trend in Indian arms purchase from America which has increased to $981 million in 2013 from $1 million in 2000 (Chart no. 1 below). America has displaced Russia as its biggest arms supplier in 2013-14.[footnoteRef:17] Defense trade has allowed Indian access to more sophisticated military hardware. [17: Gill Palmer and Victor Mallet, India becomes Biggest Foreign Buyer of US Weapons. Financial Times, February 24, 2014, accessed November 25, 2014, http://www.ft.com/intl/cms/s/0/ded3be9a-9c81-11e3-b535-00144feab7de.html#axzz3KtjAkoHM]

Defense trade between India and America is complicated by a host of factors. There is currently a strategic dissonance. Washington judges success on how defense trade would translate into an alliance in Asia. India, by contrast, judges success on how much Washington will assist it in building its indigenous defense capabilities while maintaining freedom of its foreign policy options[footnoteRef:18]. Bitter historical experience of arms sanctions has also engendered trust deficit in Indian policymakers to consider America as a reliable arms supplier. [18: S. Amer Latif, US-India Defense Trade: Opportunities for Deepening the Partnership, Centre for Strategic and International Studies, June 2012, p. IX, accessed November 19, 2014, http://csis.org/files/publication/120703_Latif_USIndiaDefense_Web.pdf.]

Chart No.1: India-US Defense Trade (2000-2013)[footnoteRef:19] [19: Arms Transfer Database, Stockholm International Peace Research Institute, Last Modified: November 19, 2014, http://www.sipri.org/databases/armstransfers/background.Note: Chart is plotted using data from above source.]

Washington is also concerned about transfer of its sold defense technology to its strategic competitors like China and Russia. Therefore it has sought inspections under End-Use Monitoring (EUMA) and Enhanced End-Use Monitoring (EEUMA) agreements.[footnoteRef:20] [20: Brahma Chellaney, Factsheet on U.S-India Accord on End-Use Monitoring, India Abroad, July 31, 2009, accessed November 25, 2014, http://chellaney.net/2009/07/22/factsheet-on-u-s-india-accord-on-end-use-monitoring/.]

Indian weapons procurement process works on lowest bidder system where the company offering the lowest price for listed military goods wins the tender. American companies are at a disadvantage since they offer advanced defense equipments at high price.[footnoteRef:21] [21: K. Alan Kronstadt and Sonia Pinto, India-US Security Relations: Current Engagement, Congressional Research Service, November 13, 2012, p.29, accessed November 25, 2014, http://www.fas.org/sgp/crs/row/R42823.pdf.]

Indian Defense Procurement Policy, 2013 demand that 30% of any defense deal valued at more than Rs.3 billion has to be reinvested in India as an offset in form of co-production.[footnoteRef:22] American companies have remained critical of this policy due to poor capacity of Indian defense industries to absorb investment. [22: Indian Ministry of Defense, Defense Procurement Procedure, 2013(New Delhi: Ministry of Defense, 2013), 52.]

3.2.2 Military-to-Military Co-operationIndia now conducts more exercises and personnel exchanges with America than with any other country; more than 50 formal events are occurring annually.[footnoteRef:23] [23: K. Alan Kronstadt and Sonia Pinto, India-US Security Relations: Current Engagement, Congressional Research Service, November 13, 2012, p. 8, accessed November 19, 2014, http://www.fas.org/sgp/crs/row/R42823.pdf.]

Formal and informal contacts among servicemen of both countries have improved coordination and communication mechanisms between the two armies. Driven by convergence of interest in Indian Ocean, navy-to-navy co-operation appears to be growing more robustly in comparison to other services. However, New Delhi remains partial to UN-endorsed multilateral initiatives over purely bilateral exercises because it does not want to project any defense alliance with America against China. [footnoteRef:24] [24: Ibid.]

3.2.3 Counterterrorism and Intelligence CooperationIn post-9/11, India-US counterterrorism and intelligence cooperation has been on a positive trajectory. Under Anti-Terrorism Assistance Plan for India, the State Department has trained more than 2,000 Indian personnel for critical incident management and investigation.[footnoteRef:25] After Mumbai attack 2008, American forensic experts were allowed access to gathered evidence while Indian investigators were permitted to question David Headley. [25: US Department of State, Antiterrorism Assistance Program Review 2012(Washington DC: State Department, 2012), accessed November 19, 2014, http://www.state.gov/documents/organization/215593.pdf.]

American concurrence with Indian threat perception emanating from Pakistan-sponsored terrorist groups has bolstered counterterrorism cooperation at a strategic plane. However, institutional hiccups cast a gloomy shadow over tactical collaboration. With states being the primary law enforcer in India, there is no national-level authority with which America can engage. The proposed National Counter-Terrorism Centre exists only in paper due to opposition from various intelligence agencies in India. There is suboptimal alignment of U.S. and Indian bureaucracies which has resulted in poor interagency communication and coordination.[footnoteRef:26] Indian sensitivity regarding exposing its intelligence setup to foreign country has also hampered effective cooperation. [26: S. Amer Latif, US-India Defense Trade: Opportunities for Deepening the Partnership, Centre for Strategic and International Studies, June 2012, accessed November 19, 2014, http://csis.org/files/publication/120703_Latif_USIndiaDefense_Web.pdf.]

3.2.4 Space and Ballistic Missile CooperationAmerica has supported Indian Space and Ballistic Defense Missile programmes. It has amended its Export Administration Regulations by removing all Indian defense and space entities from the Department of Commerces Entity List in 2011. It has added India to a preferential Country Group which consists of members of the Missile Technology Control Regime (MTCR).[footnoteRef:27]As a result, India can now buy dual-use technology from America. The latter has also supported the transfer of Arrow missile technology by Israel. Budgetary restraints, Indian focus on developing indigenous technology and weak implementation of export controls by India have slowed the pace of cooperation. [27: US Government removes Indian Organizations from Entity List, USA Embassy New Delhi, Last Modified November 7, 2014.]

3.3 Civil Nuclear Cooperation

Civil Nuclear Deal, 2008 changed the strategic context of India-US relations. From American viewpoint, the deal was meant to influence Indian answer to the question whether New Delhi would join Washington in containment of China or not.[footnoteRef:28] It also changed the nuclear world order. India got a waiver from NSG without being a signatory to Non-Proliferation Treaty (NPT). As result, India can now acquire nuclear fuel and plants from international markets and can participate in international nuclear research and development.[footnoteRef:29] [28: Ashley J. Tellis, Opportunities Unbound: Sustaining the Transformation in US-Indian Relations, Carnegie Endowment For International Peace, January 7, 2013, p. 11, accessed November 7, 2014, http://carnegieendowment.org/2013/01/07/opportunities-unbound-sustaining-transformation-in-u.s.-indian-relations.] [29: Wade Boese, Nuclear Deal Centre Stage for US and India, Arms Control Today, March 2006, accessed on November 30, 2014, http://www.armscontrol.org/act/2006_03/MARCH-usindia.asp.]

Several factors have stalled effective implementation of the deal. American companies have their reservations about legal liabilities under Indian Civil Liability for Nuclear Damage Act, 2010. Its Section 17(b) gives Indian government the right to sue suppliers in case of nuclear disasters.[footnoteRef:30] Washingtons delay in according clearances to American companies under Code of Federal Regulations Part 810 and its insistence on end-user verification visits have stymied progress.[footnoteRef:31] There are also differences regarding unit energy cost between Westinghouse and Nuclear Power Corporation of India Limited. [30: 38, Civil Liability for Nuclear Damage Act, 15th Indian Parliament, Section 17(b), p. 8.] [31: W.P.S. Sidhu, Re-energizing India-US Civil Nuclear Cooperation, The Brookings Institution, September 2014, accessed November 30, 2014, http://www.brookings.edu/research/opinions/2014/09/23-reenergizing-india-us-civil-nuclear-cooperation-sidhu.]

3.4 Political Dimension:

3.4.1 China:Washington considers India as a counterweight to China in its Asia Pivot strategy. Suffering from "status anxiety", India is also trying to catch up with a more assertive China.[footnoteRef:32]It sees Chinas String of Pearls policy as its encirclement. It also views Sino-Pakistan strategic partnership as a destabilizing factor in the region. Chinese claims on islands in South China Sea clash with Indian economic and maritime interests. As a result, American presence in the region has received tacit welcome from New Delhi. [32: Esther Pan, India, China and United States: A Delicate Balance, Council on Foreign Relations, February 2006, accessed November 30, 2014, http://www.cfr.org/india/india-china-united-states-delicate-balance/p9962#p3.]

Chances of a formal alliance are blurred due to Indian emphasis on strategic autonomy. India has not been included in Trans-Pacific Partnership which is the economic arm of Asia Pivot strategy.[footnoteRef:33] On the other hand, Sino-India economic relations have registered an upward trend with $66 billion worth trade in 2013. Both countries have agreed that unsolved territorial disputes will not affect their economic ties. Chinese response to growing India-US relations has been uncritical, giving it appearance of one-sided strategic rivalry. Direction of Sino-US and Sino-India relations, and Chinese aggressiveness would determine India-US embrace in this regard. [33: Atul Aneja, India wont Join anti-China Coalition led by US, The Hindu, October 1, 2014, accessed November 30, 2014, http://www.thehindu.com/news/international/world/postprime-minister-narendra-modis-us-visit-china-says-india-would-not-join-antibeijing-coalition-led-by-washington/article6465509.ece.]

3.4.2 Afghanistan:India and America both envisage a stable Afghanistan which does not become a safe haven for terrorist networks. Washington also sees India as a linchpin of New Silk Route. However, India worries that American planned troops drawdown would lead Washington to accept Pakistans influence in Afghanistan which it considers detrimental to its strategic interests.[footnoteRef:34] It has viewed with suspicion American backdoor negotiation with Afghan Taliban in Doha because it has opposed the latters inclusion in any future dispensation. To Washingtons ire, New Delhi supports Irans role in Afghanistan. [34: Sumit Ganguly, Afghanistan is Now Indias Problem, Foreign Policy, July 2009, accessed December 1, 2014, http://foreignpolicy.com/2011/07/19/afghanistan-is-now-indias-problem-2/.]

3.4.3 Pakistan:Despite being a frontline ally in War on Terrorism, America has decoupled Pakistan from India in its strategic calculus. But Washington recognizes that Pakistan has an influential role to play in Afghanistan endgame. It also supports normalization of ties between the two nuclear states which would directly affect situation in Afghanistan. India is concerned about the military assistance provided to Islamabad which, it believes, would be used against it.

3.4.4 Iran:Traditionally, India enjoys cordial ties with Iran but its policy towards Tehran has shifted slowly under American pressure. Though India supports Irans right to peaceful use of nuclear technology, it has urged Tehran to abide by its international obligations under NPT. India has voted in favor of International Atomic Energy Agency resolution, 2006 and UNSC sanctions, 2012 against Iran. It has significantly reduced oil import from Iran, constituting only 6% of total oil import, down from 16% in 2008.[footnoteRef:35] To Washingtons chagrin, India has so far refrained from complete disengagement from Iran. It has also opposed any military action against Iran. [35: Tanvi Mandan, Indias Relations with Iran: Its Complicated, The Brookings Institution, February 2014, accessed November 30, 2014, http://www.brookings.edu/blogs/markaz/posts/2014/02/28-iran-india-complicated-relationship-madan.]

3.4.5 Russia:Historically, New Delhi has a special and privileged strategic partnership with Moscow. Close India-Russia ties has been a major irritant in India-US relations. India tacitly supported Putins annexation of Crimea by acknowledging Russias legitimate interests and disapproved American and European Union sanctions against Russia.[footnoteRef:36] Indian position on Ukraine Crisis has raised suspicion in Washington regarding reliability of New Delhi as a strategic partner. [36: Media Briefing by National Security Adviser, Ministry of External Affairs, Last modified November 30, 2014, http://www.mea.gov.in/media-briefings.htm?dtl/23042/Transcript+of+media+briefing+by+National+Security+Advisor+March+06+2014.]

3.4.6 Recent Developments: Prime Minister Modi has pledged to revive Indian economy through implementation of business-friendly policies. He has also announced $100 billion military upgradation programme and has increased FDI cap from 26% to 49% in defense sector. All this would present America with new business opportunities. Modis Act East policy dovetails with American Pivot to Asia which would lead to greater convergence between the two to contain China. But Modis aggressive policy vis--vis Islamabad and his vow to revise Indian nuclear doctrine would require delicate balancing on part of Washington as American troops begin to withdraw from Afghanistan.[footnoteRef:37] [37: Ambassador Shafkat Saeed, interviewed by author, December 9, 2014.]

Section IVImplications for PakistanIndia-US strategic partnership has far-reaching implications for Pakistans foreign policy, security and economy as discussed below:

1. Washington is bolstering India as a regional power. Given its hegemonic designs, New Delhi would persuade it to endorse status quo in the region. Buoyed by American support, New Delhi would pursue a more aggressive policy vis--vis Pakistan which would hamper conflict resolution and bilateral and regional economic cooperation.

2. American tilt in favor of India would undermine Pakistan-US relations. It would reinforce its tactical, transactional nature. India-Pakistan decoupling policy would put limits to American political, economic and military support and assistance for Pakistan. The latter would be compelled to look for for new strategic partners and diversify its relations. Moreover, if India and America decide to formalize a defense alliance against China in future, Pakistan would have to make difficult foreign policy choices.

3. Washingtons support for Indian role in Afghanistan would exacerbate security problems faced by Pakistan. India has been allegedly training and funding Tehreek-i-Taliban Pakistan (TTP) and the Baloch Liberation Army (BLA) from its consulates in Afghanistan. Indian footprint on Pakistans western border would lead to two-front war situation.

4. Under Civil Nuclear Deal 2008, India would be able to acquire nuclear fuel and plants for civilian purposes. Given the voluntary nature of safeguard agreement with IAEA, it could always divert civil nuclear technology for military purposes. To maintain nuclear balance, Pakistan would have to accelerate production of fissile material significantly. As a result, it would not withdraw its veto on Fissile Material Cut-Off Treaty in the near future.5. India-US defense trade would equip Indian forces with sophisticated conventional arms. It would aggravate the conventional military disparity between India and Pakistan, triggering an arms race in the region.

6. Introduction of Ballistic Missile Defense in Indias arsenal would minimize its vulnerability to Pakistan missile strikes. As a result, Pakistan would be compelled to increase its missile inventory or to acquire Ballistic Missile Defense technology. Indian invulnerability could also encourage it to embrace limited warfare doctrines like Cold Start.[footnoteRef:38] [38: Zafar Nawaz Jaspal, The Introduction of Ballistic Missile Defense in South Asia: Implications on Strategic Stability, Centre on Contemporary Conflict, June 2014, accessed December 3, 2014, http://www.nps.edu/Academics/Centers/CCC/Research/NuclearLearning/11%20Nuclear%20Learning_Jaspal.pdf.]

7. Military to military cooperation would increase capability of Indian forces, posing operational challenges to Pakistan army. In September 2003, Indian and American forces conducted joint exercises in Karakorum Range close to Siachen Glacier. Such exercises have increased combat experience of Indian army in Siachen Glacier, making the resolution of this dispute less likely.[footnoteRef:39] [39: Zafar Nawaz Jaspal, The Indo-US Strategic Partnership and Pakistans Security, SASSI Report 9 (2007), accessed November 8, 2014, http://www.sassu.org.uk/pdfs/The%20Indo-US%20Strategic%20Relationship%20and%20Pakistan%27s%20Security%20.pdf.]

8. Strategic stability between India and Pakistan is based on mutual nuclear deterrence. The latter would be eroded if India continues to build its conventional and non-conventional arsenal with American help.

9. In order to maintain the strategic balance, Pakistan would have to increase its defense budget which would weaken its fragile economy. It would be left with meager resources for socio-economic development. In the last five years, the defense expenditure has almost been doubled from around 350 billion in 2009-10 to Rs700 billion for the fiscal year 2014-15.[footnoteRef:40] [40: Ismail Sheikh and Kamran Yousaf, Budget 2014: Government announces 700 billion Defense Budget, Tribune, June 3, 2014, accessed on December 4, 2014, http://tribune.com.pk/story/716913/budget-2014-defence-budget-increasing-at-diminishing-rate/.]

10. India has become an attractive country for American investors. Companies like Microsoft, Dell, Ford Motor and Boeing have invested heavily in India. This trend would increase confidence of other foreign businessmen to invest in it as well. As result, there would be more regional competitiveness for Pakistan to attract FDI.

11. If India becomes member of major arms control regimes like NSG, Pakistan exclusion would become permanent due to their unanimous decision-making procedure.[footnoteRef:41] [41: Mr. Muhammad Syrus Sajjad Qazi , interviewed by author, December 8, 2014. ]

12. Indian permanent membership in UNSC would shelve its resolutions on Kashmir issue for good. Indian veto power would be undermine Pakistans interests beyond measure.

Section VConclusion and RecommendationsTo conclude, the post-9/11 era witnessed the beginning of strategic partnership between India and America. However, high expectations for active engagement in various areas have been moderated in recent years due to Indian emphasis on strategic autonomy and defense autarky, barriers to trade and investment, nuclear liability law and bureaucratic hurdles. Growing economic interdependence between India and China has put a limit to New Delhis willingness to confront the latter. To Washingtons ire, India has supported Russia in Ukrainian Crisis. Notwithstanding its decoupling approach, Washington recognizes Pakistans role in Afghanistan which, it believes, is conditioned by normalization of Indo-Pakistan relations.Broadly speaking, India-US relations stand on sound foundation due to mutual interests and shared values. It does not need a Cold War style alliance for its fruition. An open partnership, which serves interests of both countries, would suffice. India acknowledges that it needs America more than ever if it is to become a Great Power. On other hand, despite being a difficult partner to deal with, Washington has made a long-term strategic bet on its only option in the region which explains its limitless patience and its unprecedented efforts to build a constructive relation with India. India-US strategic partnership would have serious implications for Pakistans foreign policy, security and economy. In this regard, following policy recommendations are suggested:

1. In order to deal with new challenges emerging from Indo-US strategic partnership, Pakistan should strengthen itself domestically. It should revitalize its stagnant economy and ensure political stability. It should address root causes of its security problems in tribal areas and Balochistan.

2. Pakistan should review its conventional and non-conventional capabilities and plug gaps where economically possible. It should expand its indigenous capacity to manufacture military hardware. It should continue to maintain credible nuclear deterrence vis--vis India.

3. Pakistan should convince Washington that normalization of India-Pakistan is sine quo non for regional stability and that it has a constructive role to play in this regard. It should also broaden its relations with America beyond security imperatives to active economic, defense and political engagement.

4. Pakistan should support Afghan-led and Afghan-owed reconciliation process. It should work with new Afghan government to check Indian-funded cross-border terrorism against Pakistan. It should also calibrate its policy with Beijing, Moscow and Tehran on Afghanistan.

5. Pakistan should consolidate its strategic partnership with China. It should continue to enhance bilateral cooperation in economic, defense and nuclear sectors.

6. Pakistan should increase economic cooperation with India. Both should collaborate on non-traditional security threats like climate change, drug trafficking and natural disasters. They should work to resolve less contentious disputes like Sir Creek, Siachen etc.

7. Bilateralism should be the guiding principle of Pakistans foreign policy. It should not let its relations with one country influence its relations with the other. It should constructively engage Moscow and Tehran and cultivate mutually beneficial ties with them.

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