This article appeared in The Washington Times on September 29, 2014

Aparna Pande

High expectations surround the first meeting between President Barack Obama and Indian Prime Minister Narendra Modi. Washington has pinned its hopes of a strategic partnership with India in containing the military rise of China. There is also expectation of large contracts for U.S. corporations as India modernizes its military. But India’s strategic thinking, and its insistence on independence in defense production, will not be as easy to overcome as some in Washington may be inclined to think. India continues to resist private – both foreign and domestic – investment in its defense industries, preferring instead to boost its government-funded public sector enterprises. Modi may want to change that but might not be able to do so on the timetable desired by Americans.

Modi’s election campaign generated expectations of an India which does not just seek to be an emerging power but is willing to take the decisions necessary to become one. Washington DC, like Tokyo and London, expect an immediate change not just in style but strategic decision making by New Delhi on foreign and economic policy issues. Key amongst these is the defense sector.

The British viewed colonial India as critical to the maintenance of their empire and vital to the security of the Middle East. During the Cold War both the Soviets and Americans were keen to have India in their bloc as its size, geographical location and potential resources made India a significant player. It was not as though Indians did not understand this fact.

However, India under its first and long-serving leader Jawaharlal Nehru chose to be nonaligned, preferring to keep away from external military alliances. This meant that while India received development and economic aid from the West, including the United States, military aid was limited only to periods of immediate threat such as the 1962 India-China war.

The colonial legacy fed the Indian perception of multinational corporations as predatory – wiping out domestic industries – and neo-colonialist in nature. This led to India crafting a policy where the government created and funded public sector enterprises in sectors from steel and infrastructure to defense and fertilizer. This has continued over the decades even though the majority of these enterprises are inefficient and a drain on India’s resources with India nowhere near building a domestic defense industrial base comparable to China.

Further, while India continued to purchase military equipment from other countries, the preference was for government-to-government purchases. There was also a partiality for mechanisms whereby there was a joint venture for Indian manufacture of some of the equipment. New Delhi also insisted on foreigners sharing technology with Indian counterparts. While countries like the former Soviet Union were willing to follow these policies, others – like the US – were not. This resulted in the former Soviet Union becoming India’s largest supplier of military equipment for decades.

The collapse of the Soviet Union led to a re-think in India’s foreign and security establishment. There was an urgent necessity to broaden India’s basket of suppliers so that India would never again be dependent on any one supplier. However, along with this there was a reassertion of the belief that India should develop its domestic industry so that it becomes less dependent on other countries.

In the defense arena India-US ties really grew when in January 1995 US Secretary of Defense William J. Perry and Indian Minister of State for Defense M. Mallikarjun agreed to set up a Defense Policy Group (DPG) and Joint Technical Group (JTG). This was continued a decade later when in January 2005 Indian defense minister Pranab Mukherjee and US Secretary of Defense Donald Rumsfeld signed a ‘New Framework for the US-India Defense Relationship’ which established a new subgroup on Defense Procurement and Production Group. This has continued in recent years with annual meetings.

Just as India and Japan share a similar worldview about what the future of Asia look like, India and the US share a similar worldview about the future of the global architecture. India has the largest number of military exercises with the United States. What is now required is a deepening of ties in the arena of defense manufacturing and purchase.

In the next decade India plans on spending around $250 billion to upgrade its Soviet-era military equipment and narrow the gap with China. In July of this year the Modi government in an attempt to boost investment in the defense sector raised the limit on foreign ownership in defense manufacturing to 49% from the existing 26%. However, India still insists on “offsets” from foreign vendors to ensure that the technology is transferred or some of the deal’s value remains in the country.

In his speech on the occasion of India’s 68th independence day on August 15, 2014, Mr Modi asked foreign investors to come and make in India and sell to the world.

American investors are eager to invest in India and keeping in mind India’s domestic content requirements issue the Americans have also offered to jointly manufacture products. However, no company will bring its technology and share its intellectual property rights unless it is certain that those rights and technology will be protected and that it will make profit soon.

There have been purchases of American equipment from Boeing’s C-17A strategic transport aircraft and P-8I Maritime Patrol Aircraft to Lockheed Martin’s C-130J Hercules planes and potentially even Chinook and Apache helicopters made by Boeing. However, there is still more that can be done. Just as the Indian diaspora has been the best representative of India in the United States, deeper ties that exist between Indian and American corporations will make them ideal champions of and promoters India-US ties over the long run.

India has the right to define its national interests and have a large basket of defense suppliers. However, only deep economic and strategic ties between countries will lead to India having friends and partners who will support it during times of crisis. India should never forget that during the 1962 India-China war, the nonaligned world remained ‘nonaligned’ and it was countries like the UK and US who supported India militarily.

In his recent interview to Fareed Zakaria on CNN the Indian premier remarked that ties between India and the US are much more than those simply between two governments. Both Washington and Delhi will benefit from this strategic alignment.

Despite being democracies and sharing values of pluralism and secularism India and the US have never been allies or major partners on the global stage. This is not for lack of trying on the part of individual leaders from either side whether Presidents Eisenhower or Kennedy or in recent years Presidents Clinton and Bush. Similarly in recent years both Prime Minister Vajpayee and Singh sought good ties with the US. In his CNN interview Mr Modi asserted that India and the United States are similar in many ways and their ties will only deepen further over time.

But meaningful relations cannot simply be ties between leaders. They must translate into linkages between institutions, corporations and societies. By the 1990s India-US ties had deepened at the people to people level thanks to the large Indian student population as well as the huge Indian diaspora.

Large-scale institutional and corporation tie-ups are still missing. If Modi, and the Indian business sector he favors, can build these ties, a new level of India-US relations will likely be attained.