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Release peace: the magazine

Release peace: the magazine

Analysis & Background Stories on International Affairs

Beyond Hard Power: The Multifaceted US - India Relations

Article by: Pranav Kaginele

This article was published as part of a collaboration with the India China and America (ICA) Institute. It was written by Pranav Kaginele from Johns Hopkins University’s program in International Studies.

US-India Relations – A Macro View

When Indian Prime Minister Narendra Modi paid a state visit to the White House in the summer of 2023, he and Biden released a joint statement. This statement, The US-India Comprehensive Global and Strategic Partnership from June 2023, listed new areas of cooperation and reaffirmed hope for deepening the US-India partnership in areas of technology, trade, defense, and space. While it featured the usual positive rhetoric emblematic of two countries wanting to present democratic friendship to the world, the statement also revealed several interesting details about the way the two countries view their relationship. In it, there was plenty of discussion about the military and overarching strategic goals for the future, but a large portion of the statement centers on the role of private business and tech development. This is a base from which the leaders of the countries feel like their relationship may be able to flourish into the future.

US-India Relations – A Micro View

According to Atlanta-based think tank ICA Institute, the United States and India have highly intertwined private sectors. Indian foreign direct investment in the United States currently sits at $14.4 billion dollars. Indian companies created 72,000 direct jobs in the United States. The total trade between the two countries in goods and services sits at about $192 billion USD. There are also 200,000 Indian students in American colleges and university, two-thirds of whom are in STEM fields. All of this has meant that in the first half of this year, the United States became India’s top trading partner.

The Growing Importance of Private Companies in International Relations

To understand the implications of US-Indian trade and interchange, we must examine the new role of private actors in international relations. Currently, private companies have extraordinary influence on global politics. However, in the past, conventional wisdom held that nation-states were an indivisible unit in the global sphere. The domestic happenings of a country only mattered to the extent that they affected the power of that country – a factor of the country’s population and economic strength, which could be turned into military strength. However, individual companies, especially multinational companies may now hold enough strength to be considered unitary players in international relations. For instance, following the January 6th insurrection following the 2020 US presidential election, in which Democratic candidate Joe Biden defeated incumbent Republican Donald Trump, many companies were able to take action to prevent further unrest. Twitter and various other social media removed content spreading election misinformation to make sure the former president couldn’t incite more violence through his words. Research from the ICA Institute also notes that these companies also hold political power in countries outside of which they are based through political action committees, local political engagement, and diplomacy.

The Power of Economic Interdependence

The fact is technology companies now hold immense power to control people’s behaviors and interactions. They also play important roles in cybersecurity and cyber defense, even for national governments which in the past has been a matter to be addressed by the military. On a macrocosmic scale, there are those who believe that economic interchange between companies of different states can neutralize instability and foster cooperation. This follows the classical economic interdependence theory of liberal internationalist thought. The theory goes that if two countries mutually benefit from trade with each other, then they are less likely to pursue violent actions such as war that would harm both economies. While there is mixed evidence for the theory, there is a robust base of literature backing it up.

Overall Implications and the Future of US-India Cooperation.

Historically speaking, India has traditionally pursued a foreign policy of non-alignment. This means that since its independence in 1947, it has attempted to non-ideologically work with different nations based off principles of mutual benefit. This is the reason for India’s historically stable cooperation with the Soviet Union through the Cold War, and later Russia in the present day. Through different leaders and throughout multiple conflicts, the two countries have remained close and work together in numerous agreements, forums, and international institutions. However, recently, India has been leaning more and more towards the West and away from Russia. One potential reason for this could be Russia’s growing closeness with China. China and India are historically hostile to each other. The two countries have, and continue to fight skirmishes over the border (such as in 1967, 1987, and even from 2020-2022), and China’s position as a rising great power has raised anxieties in Delhi. If China and Russia continue to deepen their relationship, it could pose a conflict of interest with Russia’s friendliness towards India. Another large reason for this break in relations could be the current state of the Russian economy. The Russian invasion of Ukraine has resulted in numerous countries (and companies) placing sanctions on Russia, causing their economy to take significant hits. Additionally, Russia is facing a severe demographic crisis with a rapidly aging population. The war has worsened this issue, as younger men have left the country/ their jobs? to fight. Thus, the Russian economy, which was already fairly weak and reliant on fossil fuels, has much less to offer India than the US economy which is far richer, more innovative, and growing. The growing ties between Indian and US companies should signal a growth in overall closeness between the two countries.

Concluding Thoughts

The combination of push factors – Russia’s allyship with China and suffering economy – and pull factors – the strong United States economy – seems to illuminate a clear path for the future of US-Indian relations. India, again, historically pursues relationships based on self-interest rather than ideology or emotion. Whether Indian companies have realized this fact and are shifting based off that, or whether they themselves are driving this shift (most likely a combination of the two), paying close attention to their actions may provide some of best indications of shifting great power relations in the near future.

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