Ambassador Roemer Recap: Three Macro Reasons Why the United States Should Care About India

Fri, 2018-11-23

By Sharon Kahn (Courtesy of the India Business Initiative at Jerome A. Chazen Institute for Global Business at the Columbia Business School)

Timothy Roemer, former US Ambassador to India, posed a question during a recent presentation at Columbia University entitled “The Age of Disruption: Global Trends and the US-India Relationship: “How do we square ‘Make America Great Again’ with ‘Make in India?’ the slogans favored by the leaders from the two most powerful democracies on earth.

Roemer, executive director at communications company APCO Worldwide, who is also a six-term congressman (D-Ind.), portrayed India as a lynchpin in the modern geopolitical and economic environment. Already, India is spanning developed and emerging sensibilities, acting as a proponent of human rights in a conflicted world, taking on the role of moderator in world hot-spots and providing an alternative to China’s authoritarian growth story.

Although it is making enormous progress on its path to prosperity, India also faces monumental challenges, ranging from environmental and energy issues to political conflicts, all against a backdrop of still paralyzing poverty in some regions of the vast country.

Meanwhile, even as it retreats somewhat from the global stage, the United States is hanging on to its world leadership role, thanks in large part to its history and economic might. Ever the diplomat, Roemer was judicious in his review of the current administration, although he indicated President Donald Trump “has gotten off to a slow start on the foreign relations front.”

Still, he argued that America has a vested interest in encouraging international growth and peace. Suggesting that India is uniquely positioned to help achieve those global goals, Roemer optimistically forecast that “US/India will be the defining relationship of the 21st century.”

In this context, Roemer offered three areas where India is poised to influence the global future, and steps that United States should take to back the country now and in the future.

1.     India is becoming the world’s growth engine. Obscured by the Sino shadow for the past generation, India is currently barreling ahead faster than China, with an annual GDP rise of 6.3 percent to 6.5 percent. Roemer cited efforts from the government of Prime Minister Narendra Modi to propel growth, including implementation of a national goods and service tax, efforts to attract foreign direct investment and an emphasis on building a world class job-creating manufacturing base, as reasons to believe India can sustain its prosperity.

If it doesn’t, the country is in trouble. Half of India’s population is under 29 years old and unemployment is already inching higher. While “demographics are working in favor of India” as the nation’s households supply a steady stream of new wage earners, said Roemer, the country’s youth also represents a colossal challenge. “India needs to create 12 million new jobs for young people each year,” to employ those entering the work force, he said.

Why the United States should care: India’s affluence means more than a billion people will soon be positioned to buy its goods and services. FDI into India from throughout the world, including from the United States, has ticked higher during the past few years. And, in Roemer’s words, “prosperity brings peace.”

What the United States should do: The Trump administration could make it easier for Indian companies to export products to the United States, said Roemer. Although trade deficits are a famous trigger of the president’s ire, so far waivers favoring India have held.

2.     IIndia is assuming a geo-leadership role, especially in its own neighborhood. “India has made great transnational progress in its region,” said Roemer, noting the government and India’s businesses are reaching out economically, forming new partnerships in Africa, Saudi Arabia and Israel. The country is also assuming a mantel of political leadership in its region. Roemer cited India’s role as a peacekeeper in such hot spots as Sri Lanka, Myanmar, the Maldives, Nepal, Afghanistan and even Pakistan.

Noting that seven of the world’s 10 largest standing armies are in Asia, he stressed that other countries don’t see India as a threat. “India doesn’t appear to have colonial aspirations,” he said, a view that has helped it champion “the positive attributes of democracy.”

Altruism plays a role in India’s foreign policy, but so does location. “Every day, India has to wake up to worry about two neighbors: Pakistan, with whom it has fought three wars, and China, which is building ports all over India as part of its One Belt One Road initiative,” said Roemer.

Why the United States should care: The world has become far more complex world than during the cold war when the United States aligned with Pakistan and India sided with the Soviet Union. “That was an age of bilateral relationships,” said Roemer. Today, he said, “is a time of three-dimensional chess,” where countries need to consider how relationships affect a variety of modern dilemmas that seep beyond borders—climate change, geopolitical tensions, intellectual property guarantees, human rights and many additional nuanced issues. Any country—in this case India—that can ease tensions and trumpet the basic tenets that America also stands for, is an invaluable ally, said Roemer.

What the United States should do: Under previous administrations, the United States started to shift focus—“not turn its back on NATO, but start spending more time and attention on Asia,” Roemer said, reeling off some weighty statistics to explain the motivation to pivot toward the East: The region houses the bulk of world population, including 1.4 billion people in China, 1.3 billion citizens of India and millions more in Japan and emerging Asia. Nearly two-thirds of world trade passes through the Indo-Pacific region. And an increasing share of the world’s wealth comes from Asia.

3.     India provides a balance to China. As China’s growth slows and its militarism extends to the South China Sea, some investors have begun looking for an alternative place to park their funds. Roemer indicated certain African countries in particular are becoming wary of what some see as creeping colonialism. Further, the “exorbitant interest rates” that China has levied on One Belt One Road projects have caused Sri Lanka and Myanmar to renegotiate their debt when they were unable to pay.

To truly challenge China’s economic allure, India still must overcome challenges, such as its shoddy and incomplete infrastructure and dependence on fossil fuels. Roemer said the Modi Administration fully understands and is addressing some issues through tax reform and demonetization.

 

Why the United States should care: “People worry that China may be moving into permanent slower growth,” said Roemer, noting the world economy needs a new champion to spur productivity across the globe. He cited “more issues in China, more opportunities in India” for US investors and exporters.

And, of course, there’s the democracy argument, which Roemer maintained should be a crucial geopolitical impetus for a country that spent a generation striving to counteract communism. “‘We the People’ are the first three words in both America’s and India’s constitutions,” he observed.

What the United States should do: Certainly it remains in the best interest of the United States if China continues growing. “The US doesn’t want to contain China, it wants to compete with China, to partner with China,” said Roemer.

But “President Trump likes to win,” he reasoned. “He should think about the largest democracy in the world as a way to get China’s attention” when it comes to issues such as patent infringement or military rumblings.

Roemer said India and the United States have already made considerable progress in some areas, such as cybersecurity. “But we need more true partnerships. It shouldn’t be the United States telling India what to do, but finding ways to help India move forward on its own path.”

So far, President Trump has largely ignored India, and Roemer said this needs to change. “Foreign policy is about the president’s priorities,” said the former ambassador. “Somebody in the administration needs to be executing agreed-upon policies 24/7 and setting the direction of where we’re going in the future.” That, he said, is not happening with regard to India.

But it could. Although foreign aid and trade policies can be contentious issues, India is not really a political liability for either party. “The India Caucus is one of the biggest bi-partisan groups in the Senate, with 60 out of 100 members,” said Roemer. Given the arguments in its favor, he indicated, “most people who understand the issues want a US/India relationship.”

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