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Strategic Relationship


Rahul Mukherji

THE EAGLE AND THE ELEPHANT: STRATEGIC ASPECTS OF US-INDIA ECONOMIC ENGAGEMENT
By Raymond Vickery, Jr.
Oxford University Press, Delhi, 2010, pp. 352, Rs.695.00

VOLUME XXXVI NUMBER 6 June 2012

The Eagle and the Elephant is the best book on Indo-US relations written by an insider in the US administration. Vickery holds a bipartisan American view largely sympathetic to Indian concerns. It surpasses Denis Kux’s magisterial book—Estranged Democracies. There is a remarkable commitment to historical detail to buttress the argument that Indo-US economic relations after 1991 were pivotal for its strategic relations. Positive economic inducements rather than sanctions or military considerations will be the harbinger of friendly ties between the two countries. The relationship between the world’s two populous democracies of considerable economic significance will be the most significant one for the US in the twenty-first century. The chapter on civil nuclear cooperation is central to the argument about economic and strategic relations. India’s nuclear tests in 1998, like the one in 1974, should have brought the relationship to a new low. But the 1998 sanctions were reversed quickly. The United States India Business Council (USIBC), the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian American Forum for Political Education (IAFPE) led by Swadesh Chatterjee played a stellar role in turning conflict into cooperation. This was reflected in the Joint Statement made by Manmohan Singh and George Bush in July 2005 and the final passage of the bill acknowledging India as a nuclear power in October 2008. The chapter provides a graphic account of how commercial interests helped trump political opposition. This agreement laid the foundation for robust Indo-US relations. Civilian nuclear cooperation since 1959 has been signifier of trust between the two countries. The Indo-US economic engagement has far-reaching ramifications. First, sixty percent of the fortune five hundred companies outsource their work to India. Commercial ties between American and Indian companies may have restrained India from taking an aggressive posture in the aftermath of the terrorist attack on the Indian Parliament in 2001. The US Government travel advisories and pressure from General Electric considerably reduced the prospect of Indian aggression. Second, outsourcing created cooperative possibilities among Indian and American companies. This political economy has secured service trade, despite many attacks on the American H1-B visa by the US Congress. Third, both India and the US are dependent on imported oil. While they differ on the propriety sanctions on Iran—the nuclear deal may have played a role in scuttling the Iran-Pakistan-India pipeline project. The Indo-US nuclear deal was clearly delinked from ...


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