India's New American Romance
D'MONTE, DARRYL
A MATTER OF ECONOMICS India's New American Romance BY DARRYL D'MONTE Bombay Indira Gandhi's midsummer visit to the United States????after an absence of 11 long years????Marked the resumption of...
...Imports will be eased, and foreign collaborations and royalty payments made simpler, thereby severely eroding the long-nurtured policy of economic self-reliance...
...She is coming to realize that whatever India's political and military dependence on the Soviet Union might be, only the U .S...
...As a token of its goodwill, Washington is already making preparations for arms sales worth $1 billion to India...
...Strong words indeed, particularly coming from an Indian leader who has a friendship treaty with the USSR and in the past has made no secret of her special feelings for that Communist giant...
...Yet these and other obstacles were surmounted with an ease that took everybody's breath away...
...And given the only other use that could be made of them, she said, India has been forced to raise its own defense expenditure "a little...
...Gandhi told NBC: "We don't want one friendship to obstruct another...
...India has been increasingly indebted to what the Left calls surrogate U.S...
...could hardly think of a more diplomatic rationalization itself...
...In the area of foreign relations at least, Indira now appears to be precariously following in the footsteps of her father, India's illustrious first Prime Minister, Jawaharlal Nehru, who wanted thecountryto remain truly nonaligned...
...But the fact remains that the Prime Minister's seemingly perfunctory courtesy call on President Ronald Reagan in response to his invitation became something of a passionate reunion between the world's two largest democracies????Perhaps to the surprise of the two leaders themselves...
...Commentators in both countries had pointed to several stumbling blocks in Indo-American relations on the eve of the meeting...
...In return, Delhi has allowed the economy to be monitored by the "gnomes of Washington," and has liberalized many regulations...
...At the start of the '60s, though, Washington blundered seriously by trying to make India dependent on American aid: When an opportunity arose for helping India to become self-sufficient in steel or oil prospecting, Washington refused technical assistance...
...Gandhi made some vague conciliatory noises about what is considered the touchstone of her pro-Soviet stance, New Delhi's present policy on Afghanistan...
...A MATTER OF ECONOMICS India's New American Romance BY DARRYL D'MONTE Bombay Indira Gandhi's midsummer visit to the United States????after an absence of 11 long years????Marked the resumption of an on-again, off-again love affair that began in the early '60s...
...Moreover, on several occasions lately the Prime Minister has cold-shouldered the Kremlin...
...Senator John Glenn (D.-Ohio), a critic of India on nuclear nonprolifera-tion, said: "I believe that our strategic interests in the region would be served by an improved relationship with India????a country which is strategically, demographically and economically the most important state in the arc...
...Gandhi will have a hard time convincing the Politburo that she hasn't made a major switch in foreign policy...
...Further, in response to what the Indian Left condemns as arm-twisting, the government has promised to raise the prices of food-grains and key industrial inputs to make the economy pay for itself, in effect removing subsidies for poor consumers and nascent industry...
...Pravda'i sole comment on her U.S...
...rushed to India's defense with arms and other supplies...
...Whilecalling at the White House, the Prime Minister explained India's concern about the military strengthening of its biggest foe...
...She did not consult her so-called Soviet mentors before recent border negotiations with China...
...Nevertheless, because of a U.S...
...because how can the Soviet Union have the impression that there cannot be an anti-Soviet government in Afghanistan...
...and has been trying unsuccessfully to fill the vacuum created by Sanjay's death, is equally, albeit unobtrusively, inclined toward the private sector and multinationals...
...India has always stood for noninterference in other countries," she assured the Americans...
...Significantly, American wariness of disbursing hefty loans to India hasdwindled since the Prime Minister's visit...
...America supplied most of the22 million tons of foodgrains needed to tide things over under Public Law 480...
...The IMF has also persuaded India to adopt "a more realistic policy in regard to exchange rates," a euphemism for devaluation...
...Sensing a new thaw, American leaders sought and received a firm declaration of affection from the 65-year-old Prime Minister...
...arming of Pakistan...
...Gandhi began tilting heavily toward Moscow with the signing of a Soviet friendship treaty...
...Rajiv's advisers are all former Cambridge classmates who are proven professional managers in large corporations and in the advertising business...
...In the course of her July 27-August 2 visit to the United States, Mrs...
...The next two years saw India experiencing the first of a recurring series of food crises resulting from its Soviet-style five-year plans begun in the '50s, emphasizing heavy industry exclusively...
...There was prolonged applause...
...One Indian official put it succinctly: "Following the achievement of self-reliance, it is imperative that there be revolutions in management and increases in efficiency in order to make the infrastructure work...
...The most important of these to date involved the $5.8 billion loan the country has obtained from the International Monetary Fund (IMF), the largest in that organization's history...
...Then she added, "If we do not do so, what reply can we give to our people and Parliament...
...The Sino-Indian war of 1962 changed matters dramatically, as theU.S...
...This came in the context of a Reagan Administration plan for reducing the American contribution to the IMF (where the U.S...
...The U.S...
...approval...
...In Washington, World Bank President William Clausen assured Gandhi that he would try to step up aid to India, that it was a model for other receiving countries...
...How the Soviet Union will react to this unexpected development is difficult to say...
...And Mrs...
...has the technology the country needs to modernize its industry...
...Darryl D'Wotiefrequenlly writeson Indian affairs for The New Leader...
...and over its 35 years of independence it has shown a remarkable degree of political stability...
...than is in it...
...It is exactly what it says????a treaty of peace and friendship...
...Richard Beal, a special assistant to Reagan who flew to Delhi just before the Prime Minister's trip, declared: "My view is that India's size requires it to do exactly what America's size requires America to do: have a wide proliferation of contacts...
...She turned down a request that a high-level delegation be sent to Moscow to celebrate the 10th anniversary of the Indo-Soviet pact...
...Elder brother Rajiv, who accompanied his mothertotheU.S...
...The Tarapur impasse was neatly sidestepped by arranging for France to supply the fuel under the appropriate safeguards, with U.S...
...This allowed the sale of commodities at concessional rates and the acceptance of payment in the recipient's currency, duly returned as outright grants...
...Only then did Nehru turn to the USSR, which couldn't possibly match American support dollar for dollar, except in these industries...
...for example, was blunt: "We Americans are very spoiled, so I've got to ask you, do you love us...
...Who has misunderstood what will become more apparent in the months ahead...
...leaders overcome their diffidence toward what they had considered a Soviet vassal...
...So it is natural to turn to America, as other nations have done, to meet these needs...
...with lots of nations...
...played a belligerent role in the liberation of Bangladesh by sending an aircraft carrier into the Bay of Bengal, and Mrs...
...The erratic course of India's foreign policy can be traced back to 1954, when Pakistan entered into a mutual security pact with the United States...
...It is very much an emerging economic, military and diplomatic power...
...In fact, with little fanfare India has been taking a series of steps designed to head the economy in the direction of the West...
...India moved firmly into the American camp...
...That friendlier phase has begun...
...By 1963, India owed America $2.3 billion????More than half of its total currency in circulation...
...During the 1965 war with Pakistan, both Washington and Moscow played "neutral" roles...
...India's public sector does provide most of industry's basic needs, like power and steel, and now has turned the corner and is making profits...
...Indeed, Gandhi's younger son, Sanjay (who died in a plane crash in 1980), made no secret of his pro-American bias and castigated the CPI, claiming that it harbored the most corrupt politicians in India...
...Gandhi's visit provides an opportunity to embark on a new relationship with the world's largest democracy...
...because it's good for India's economy...
...controls one quarter of the votes...
...Congresswoman Mil-licent Fenwick (R-N.J...
...Special American teams arrived immediately after the border war and offered this beleaguered country military assistance worth $120 million over the next three years...
...Rajiv's cronies want to exploit the more modern know-how offered by the West to pull India out of its economic morass...
...It was no accident that Rajiv made his first public political appearance at a meeting organized by businessmen in Bombay a couple of years ago...
...arms sales ban imposed on India and Pakistan in 1965, the Soviet Union gradually became this country's main arms supplier...
...sojourn archly blamed Washington for "not fully understanding the independent foreign policy line of India...
...At the top of the list were America's reluctance to provide fuel for the Tarapur nuclear power plant (just north of Bombay), Washington's not unreasonable belief that the Gandhi government was virtually a puppet of the Soviet Union in Asia, and the U.S...
...And she has made apparent her unhappiness abou the Kremlin's failure to reprimand the Moscow-controlled Communist Party of India (CPI) for attacking her Congress (I) Party, and for trying to forge an alliance with the independent Communist Party (Marxist) that currently rules West Bengal State...
...But she would not have hummed that tune a year ago, when the Soviet Union was treated as a steadfast ally...
...Still, it is saddled with obsolete technology, unused capacity and inefficient management...
...Washington did not like this warmth between the two Asian neighbors, yet continued to provide India with economic aid...
...Gandhi's friendly gestures have impressed U.S...
...Gandhi spontaneously replied: "All of us in India love you...
...Clearly, the market offered by a country with 680 million people, the world's 10th or 11th industrial power, has helped U .S...
...We have always wanted outside troops to withdraw...
...political leaders and businessmen alike...
...Nehru denounced the treaty and that same year signed an agreement with China incorporating the famous Panchsheel, or five principles of peaceful coexistence...
...Other investors are bound to show more interest in a country that is now holding the door open for them...
...How lasting and torrid this phase will be is anybody's guess...
...We are friends with the Soviet Union, although people here have tended to read much more into our treaty...
...The same year, the U .S...
...But as a nation with a claim to world leadership, India must recognize the liabilities of too close association with an imperialistic Soviet Union...
...As the Eisenhower Administration saw the situation, India and China were struggling to overcome roughly the same economic problems in diametrically opposite ways, and India deserved help...
...Economic forces, however, seem far more important than political ones in accounting for Gandhi's new romance with America...
...Although America had sold high-technology weapons to Pakistan because of the Soviet invasion of Afghanistan, she observed, it was unrealistic to expect that Islamabad would ever deploy those arms against the USSR...
...I do not know of any country where people don't love the United States...
...The weapons were paid for with cheap consumer goods, so that in 1971 theUSSRsurpassedtheU.S.asan importer from India...
...lending institutions: The World Bank and its soft-loan affiliate, the International Development Association...
Vol. 65 • September 1982 • No. 17
