Jag Venugopal's Blog

July 28, 2010

India’s relationship with the US: It’s economic, stupid!

Filed under: Project Management — Jag @ 1:03 am

I’ve argued in the past that India’s relationship with the US should not be predicated upon this or that nuclear deal, bromides about shared values and such, and carping about Pakistan every time an Indian official travels to the US.

Arvind Panagriya of the Brookings institution says it much better than I could. He asks what’s in it for the US to have a closer relationship with India, and what that should entail. The answers he finds are that the US interest in India is informed by where it sees the Indian economy, not now (11th largest in the world, behind Brazil and China) but in 15-20 years after growth at 10% per annum.  He also rightly states that there is little the US and Indian governments can do to move the relationship forward, other than cooperation in generic mom-and-apple-pie areas such as environment, clean energy and the like. The real relationship is built on solid economic interests, such as investments, import/export and outsourcing. Panagriya’s last sentence is the most impactful —  “While continuing dialogue has signalling value, the ultimate key to achieving a true partnership remains sustained rapid growth that turns India into a $5 trillion economy in no more than 15 years”. Read the entire essay at http://www.brookings.edu/opinions/2010/0623_india_us_relations_panagariya.aspx

In other words, as Abhishek Bachchan so eloquently lip synchs in Hinglish, “The whole thing is that ki bhaiya, subse bada rupayya”. Restated for my American readers, it means “economic interests trump all else”. Nuclear power plants matter a lot more than nuclear bombs, in the ultimate analysis.

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