File photo of Prime Minister Narendra Modi with US President Donald Trump at Hyderabad House | Praveen Jain | ThePrint
File photo of Prime Minister Narendra Modi with US President Donald Trump at Hyderabad House | Praveen Jain | ThePrint
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The Covid pandemic offers India and the United States an opportunity to bolster their partnership. The large-scale loss of human life, social disruption, and economic devastation caused by the pandemic will almost certainly be followed by massive rehabilitation efforts.

During that phase, India-US cooperation, and American encouragement of India’s role as a regional leader could help foster a global order that maintains ascendancy of democracies, especially against the rise of an authoritarian China.


Also Read: Covid may be watershed, but from Bush to Clinton, US has accommodated China for years now


Chinese influence in the region 

China is clearly preparing for the changes that the world faces in the aftermath of the havoc wreaked by Covid-19. With one of the world’s largest foreign currency reserves and a centrally directed economy with capitalist features, China sees itself as having an economic advantage.

Beijing is also building its military capabilities, and developing alliances, to flex its muscle as a global power, in opposition to the United States. Its influence is already significant in Asia and Africa.

India, the largest country in South Asia with a population matching China’s, is ideally suited to take a central role in rebuilding its neighbourhood because of its central location and its larger economy relative to others in the region. It would be in the interest of the US to encourage this outcome, with a view that it will enable an Indian challenge to China.

The Chinese government has always preferred to deal with countries unilaterally — dealing with Nepal, not South Asia, Vietnam not South East Asia, or Germany not the European Union.

China understands the challenge it faces if India is able to play the role of regional hegemon. For the last few decades, Beijing has expanded its influence in South Asia and right now, is stepping in more aggressively to assist governments — weakened during Covid — with an intention to control them in the future.

China’s Ambassador to Nepal is trying to replicate her counterpart in Pakistan and is dabbling in Nepalese domestic politics. In early May, tensions along the unresolved India-China border escalated in the Sikkim region.

China has long objected to Sikkim’s integration into India and has claimed its territory as Chinese. While the immediate tensions have been lowered, such incidents will only increase in the long-term.


Also Read: US-shaped void forces Australia to stand up to assertive trade-partner China


India against China

India was concerned that in the economic aftermath of the Covid-19 crisis, Chinese companies may attempt to take over Indian companies. This led New Delhi to change Foreign Direct Investment (FDI) rules in end-April.

The new rules mandate that any companies from “border-sharing countries” will need the government’s approval prior to making investments in the country. Beijing immediately pushed back against the new rules calling them “discriminatory”.

While Delhi has been reluctant to openly blame Beijing for the Covid-19 pandemic, it has sent sufficient signals. India has for decades had a ‘One China’ policy, while maintaining relations with Taiwan. In recent years, there has been a rising demand in Indian policy circles that unless China recognises a ‘One India’ policy – namely, gives up claim to Indian territory — India should not accept the ‘One China’ policy either.

This idea has gained wider support in the broader Indian intelligentsia post- Covid-19 crisis, including demands that Taiwan be allowed to participate in the World Health Organization (WHO). With India heading the executive board of WHO at the next meeting, there are those arguing that Delhi should agree to Taiwan returning as an observer.

The US has long asked India to step up and play a bigger role in its region and the Indo-Pacific. Under the Trump administration, Washington has asked India to stand up to China. But Delhi can do that only with economic and technological support from the US.


Also Read: India isn’t ready yet for foreign companies that want to quit China


Attracting foreign companies

Secretary of State Mike Pompeo and other US government officials have often spoken of the need to “restructure” global supply change chains and reduce dependence on China.

American companies have indicated their desire to move out of China and this process has been strengthened after Covid-19. The government of Japan is reportedly going to pay its companies to leave China.

Although these companies could choose from any of the Asian countries offering lower wages and other incentives, encouraging them to relocate to India could serve a strategic purpose. Of course, India would have to make the proposition economically attractive.

In his 12 May 2020 stimulus package of Rs 20 lakh crore, Prime Minister Narendra Modi committed his government to helping India’s small-scale sector — the Micro, Small, and Medium Enterprises, MSME.

Labour market reforms are also being discussed. On 8-9 May, three BJP-led states, Gujarat, Madhya Pradesh and Uttar Pradesh, announced that new manufacturing plants would be exempt from almost all existing labour laws for a period of three years.

Another proposal to boost manufacturing is a finance ministry proposal to offer tax exemptions up to 10 years to any companies that establish new factories in labour-intensive areas, such as textiles, food processing, leather and footwear.

If these proposals and ordinances actualise, they could provide the ease of business, tax incentives, and labour market reforms that both domestic and foreign companies have been seeking from New Delhi for years.

An Indian willingness to treat American companies as preferred investors, and a US commitment to encourage American investment in India as a strategic priority, could enhance India’s capacities in meeting China’s rising challenge.

The author is Research Fellow and Director, India Initiative at the Washington-DC based Hudson Institute. Her books include ‘Escaping India: Explaining Pakistan’s Foreign Policy’ (Routledge, 2011), ‘From Chanakya to Modi: The Evolution of India’s Foreign Policy’ (Harper Collins, 2017) and ‘Making India Great: The Promise of a Reluctant Global Power’ (Harper Collins, 2020). Views are personal.

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13 COMMENTS

  1. 100 years, 1000 years india will continue depending on other countries, the country never develop if there is corrupted politicians and officer s.

    USA will make money by India, India will get nothing, it remains poor.

  2. Looks like there are many CCP agents here.
    India is hoping for investments just like China did 30 years back- not begging. In my opinion, India can certainly trust US over China. Even if the US may not be a God, it certainly is lesser evil than China

  3. India is the biggest recipient of US economic and military aid, yet it has no intentions to support US interests. India has always been an economically and military weak country and it has no capacity to counter China. Chinese economic and military muscle far greater than India, while India is using US for its South Asian hegemonic designs only. All the America military and economic aid has been utilized by India to bully its neighbors and it is still demanding more aid.

  4. so aparna wants india to fight china for the desire of usa … buying usa technology..and elimination its biggest threat… playground hai kya india???

  5. India needs a helping hand..US needs that too..China is notorious for her foolish tactics like she has been doing in SE Asia, in Africa and in South Asia. No one loves China and Chinese.

    India must utilise this opportunity and must go ahead to stop Chinese hegemony in the world. Chinese communist thinking can never be accepted by the democratic world. India has high hopes from BJP and Modi Hi and they would definitely work towards making India a more powerful and peaceful nation.

    Jai Ma Bharti !

  6. Why does India Allways need a foreign aid?
    There are many hidden reasons behind it:
    1: Corruption, politicians are picketing big monies and I doubt if much has changed even after Modi govt.
    2: We need a very strong finance minister who has a “deep” understanding of finance….. eg: inflation, stagflation, deflation, hyper inflation plus bond markets other borrowing and debt vehicles…… printing more money leads to what…… basically just about everything and this is possible only when we take a stand over what kind of economy does “India” want to be… export oriented or consumer economy.
    4: since I have been abroad I have seen how everyone works but somehow I feel it’s our politicians who are not taking a stand on development modules eg: US needs techies, China is export oriented country…… Russian speciality is exporting energy resource….. but what does our govt wants to brand “ India” as?
    5: Either Modi’s govt is the same as congress as he has so far done none to very limited things or it’s just him and his govt incompetence that even after 6 years into power they don’t know what are they doing.
    6: If I were an advisor to PM…. India has a labour which needs to be put into good use…. 50 percent people are illiterate and poor….. why can’t you use them into waste management sector…. pay them 50,0000 rupees per month for doing hard labour jobs? Create 5-10 state owned companies… list them in stock exchange….. hire people atleast 5 lakh from each state tax their salaries…. wait for them to take credit from banks…. banks should lend them too as they are on full time jobs….. wait for multiple effects in terms of growth and create 28 states x5 lakh = 1.40 crore jobs.
    You got to be doing this., can’t sit idle and keep pocketing monies….. that has become an old thing now….. India shouldn’t elect illiterate or uneducated politicians after this govt.
    7: What degree does Nirmala sitharaman holds? What degree or experience does Rajnath Singh our defence minister holds or experience has?
    8: what good is smriti Irani is, when she doesn’t even report to people about the work that she has undertaken?
    9: What is Ravishankar Prasad doing? How is he helping the sector? How does he plan to use money on? Who all companies is he chairing the meeting with? What are they going to develop going forward?
    10: Does govt has “ nationalised database” to keep a track of number of individuals having jobs? Statewise? Citywise? Age? Area? Hired by? Hired as? Hired for? Designations? How much are they paid for? Do they know the number of migrants working in each state? If you know nothing about it or have no data whatsoever? How would you make decisions based on?
    11: I am very disappointed overall.
    12: Print Monies and create employment for poor …. land reforms missing ? Labour reforms missing …… any beats telling us that daily wage rate is 300 rupees he she should be slapped on his/her face and should be asked if they can survive on such sum?
    13: Unless you wouldn’t think “practically” I wouldn’t count on this country’s development and its shame for us that even after 73 years have passed we are incompetent race on this planet earth!

    • First, your country need to get rid of that incompetent Modi, but it takes one to know one, in this case a billion to know one because they put him up there.

      • First you need to learn the situation or Shut up. Congress was 10 times worse than so called ” incompetent Modi”.

  7. First the US helps China to become a strong global super power by asking its companies to invest in China just because India was strong with USSR support. Now since China is looking them in their eyes they want India to become their frontline warrior. The US can never be trusted because they are selfish and can leave anyone in the ditch after making use for themselves.

  8. The deepening US-India alliance has been driven to a very considerable extent by the purchase of weapons from the US. India is the largest arms purchaser in the world, making it the most lucrative market for the arms sellers around the world. The US now is the third largest arms supplier to India only after Russia and Israel. The growing US-India strategic alliance is encouraging India to aggressively assert its claim to be the hegemon in South Asia, demanding that its smaller neighbours acknowledge its dominance in the region. It is also instigating a number of inter-state conflicts within the region. The US-India strategic alliance, indeed, has very serious implications for the region and is emerging as the major threat to strategic stability in South Asia.

  9. The US and its allies are just economically and strategically using India and they are trying to add their Indo-Pacific concepts aimed primarily at addressing their own challenges in Asia to the agenda. According to estimates, the ideas promoted by Washington together with Tokyo and Canberra are aimed at containing major regional powers and drawing dividing lines by creating closed groups and interests rather than a positive development and open cooperation in the Indian and Pacific oceans.

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