American Enterprise Institute

February 26, 2008

[Edited transcript from audio tapes]

2:45 p.m.	Registration
3:00	Panelists:	Lisa Curtis, Heritage Foundation
		Timothy D. Hoyt, Naval War College
		Ashley J. Tellis, Carnegie Endowment for International Peace
	Moderator:	Christopher Griffin, AEI
4:30	Adjournment

Proceedings:

Christopher Griffin [Moderator]:  Ladies and gentlemen, good afternoon.  Welcome to the American Enterprise Institute.  My name is Chris Griffin.  I am a research fellow here in Asian Studies and I couldn’t be more pleased, or humbled, to be honest, to be sitting on a panel with such a great set of experts to discuss the U.S.-India defense relationship. 

We’ll very quickly have a couple of preambular thoughts before getting into the introductions of our panel today.  The first of which is, that for almost three years now, we have been negotiating the U.S.-Indian deal to allow civilian nuclear cooperation, and all that portends. Probably the easiest way to describe the response of the American policy community and the Indian policy community to the deal would be something along the lines of wailing and gnashing of teeth; there hasn’t been much easy about it. 

But, one thing that has happened, very rapidly, and has been common to the bond at varying degrees has been the development of the U.S.-Indian defense relationship that’s usually described as the one-part to the bilateral relationship that is far ahead of everything else.  Increasingly, when looking at the nuclear relationship, the economic relationship along with the defense relationship, one can imagine a person being held back by his two arms hands while the head is stretched out; you can’t tell if it’s crossing the finish line or about to be chopped off. You can see how quickly the defense aspect of the relationship is developing, leaving the other parts behind. 

 The second very quick thought is that I am actually just back a week ago today from a trip to India where I attended the Defense Expo and conducted a couple of interviews regarding the U.S.-Indian relationship. Looking at the title of this panel, Navigating the U.S.-Indian Relationship, the reason that the nautical metaphor is always such a useful one is that it can end at any particular place you want it to.  You can find safe harbor or rocky shores. 

The striking thing that really hit me speaking to people in India, at least last week, was the sense that time is on India’s side. This relationship progresses, if you look at the fundamental economic questions, the security questions, and the regional environment around India, is going, more or less, to be getting better over the next five to ten years, and as long as this is the case, India can make progress on any issue it wants to now, or it can return to it in five years time, in ten years time, and make progress on it then, with basic, better fundamentals from which to approach it. 

 To introduce our speakers in the order they’ll be speaking, we’ll start with Ashley Tellis, who is senior associate for the Carnegie Endowment for International Peace, and additional biographical materials available, but, I think anyone who follows strategic issues is familiar with his work on China’s grand strategy, on India’s nuclear posture, on almost any other issue that you’re likely to be working on. 

Lisa Curtis is a senior research fellow at the Heritage Foundation. Before that she was with the Senate Foreign Relations Committee working, on Senator Lugar’s staff, and, previously, also with the U.S. State Department and the CIA. 

Tim Hoyt is a professor at the Naval War College where he teaches on a variety of issues, but wrote his dissertation on defense industry policy, with India as one of his case studies, and will be addressing that issue, along with others.  So, without further ado, we will hand the mic over to Ashley to begin with our first presentation. 

 Ashley Tellis:  Thank you, Chris.  It is a pleasure to be here with you this afternoon to talk about the issue of U.S.-India defense relations. With the visit that is now underway of Secretary Gates to India, his first to the region, the Administration hopes to have a consolidation of a relationship that actually began with great promise in 2001.

 What I want to do is just give you a snapshot of where I think the defense relationship is today in terms of a broad survey.  Let me start by simply stating what I think is a clear fact, at least in retrospect, that the U.S.-India defense relationship was the leading edge of the transformation of U.S.-Indian relations, especially from 2001 to 2004.  We really owe our colleagues in the Defense Department a great deal of debt for the burden that they bore in pushing the U.S.-India relationship forward at a time when there were great uncertainties in other dimensions of the relationship. 

In fact, the role played by Secretary Rumsfeld, Mr. Wolfowitz and Mr. Feith in the first term, in setting the defense relationship on a course that has really continued very successfully into the second term, cannot be underestimated.  When the Administration began in 2001, we began at a point when U.S.-India relations were actually quite fraught with a great deal of anxiety, a great deal of uncertainty, because of India’s 1998 nuclear tests. 

To look at where the defense relationship ended in 2004 leaves you with absolutely no doubt that if we did not have the defense relationship, the transformation of the larger relationship itself would have been at risk.  One day I hope I will be given the requisite permissions to write the story because it’s really quite a story and I think I will be able to tell the story quite convincingly that defense really drove the transformation. 

 In the second term, there was an inflection.  The U.S.-India defense relationship consolidated, it provided the ballast for the relationship in uncertain times, and continues to provide the ballast, now that the other big initiative, the civil nuclear agreement, seems to be in some kind of jeopardy.  I see this as being the normalization of the bilateral relationship because the activities that were put into place in the first term now acquired a certain momentum of their own; the defense relationship did not need to be flashy in the second term. 

Instead, it continued its role of being a slow but consistent plodder, and the plodding, moving now in the direction of deepening the complexity of the interaction, expanding the scope, and things like that.  So, to my mind, the fact that defense is no longer on the front burner, that it’s no longer, in a sense, in the public eye, is actually a tribute to its success because it’s now become part of the background architecture, the background furniture of the relationship. 

To my mind, there is no better indicator of success than precisely this kind of normalization.  A defense relationship that is enduringly sexy, that is enduringly in the public eye, that is enduringly a lightning rod, is actually a relationship that is quite fraught. 

 And, so, when we look now, in 2008, at the state of the U.S.-India defense relationship, I think we can be quite content that we have bridged a huge chasm, a chasm that defined the difficulties in the bilateral relationship for a very, very long time. 

 Let me just give you, in a sense, a tour of the different dimensions of this relationship where I think we’ve done well and where I think we have still a ways to go. 

 When one looks at the defense relationship, I think you need to think of five distinct aspects to the relationship.  The first is the nature of military to military ties.  The second is the quality of defense trade.  The third is the character of defense industrial cooperation.  The fourth is joint research and development.  The fifth is joint operations.  If you look at these five dimensions, I think what you get is a hopeful picture, one where there is improvement and progress, but where the improvement and progress has not necessarily been uniform.  Some areas have, of course, done better than others, and I will try and explore, in the few minutes that I have before me, where we are and why that is so. 

 I think the most impressive breakthroughs have been made in the area of military to military ties, which is, essentially, economizing abstraction for a whole range of military to military interactions, whether that be high-level visits, exercises, or consultations.  In this area, the strides have truly been phenomenal, and let me just give you one data point which I think sets the point I want to make in very sharp relief. 

India and the Soviet Union, when it existed, had a very close defense relationship that went back at least to 1964.  From 1964 to 1990, it was the most distinguishing element of the Indian-Soviet relationship, and, yet, during that entire period Indo-Soviet military to military ties were virtually non-existent.  The Indian military never interacted with the Soviet military, they never exercised with the Soviet military, and they never consulted with the Soviet military. 

In eight short years, from 2001 to 2008, we’ve reached a point where India, which is still formally a non-allied nation, does not think twice about entertaining more and more ambitious proposals defining an expanded military to military relationship.  Of course there are hiccups.  There are moments of hesitation, mostly caused by the complexities of Indian domestic politics.  But, by and large, there is a very clear understanding within the Indian military that improved military to military ties with the United States are straightforwardly a winning proposition.  For a country that never had, never entertained, this kind of a relationship with its long time partner, the Soviet Union, to do this with this U.S is a very stunning demonstration of how different the U.S.-India partnership is, and how different it is destined to be. 

 The second area is defense trade, the Indians buying American equipment for its military.  I think in this issue area, we are still at the first steps.  There have been some important breakthroughs, but the breakthroughs, have, unfortunately, been very long in coming.  I will spend some time talking about why I think this is the case.  But I would end this, my short remarks on this subject, by saying that the future is actually brighter than it seems.  I am also going to say a few words about why I think that is the case. 

In the defense trade relationship, I think we have taken first steps that are significant, they’re not trifling; the most recent agreement that we’ve had with India’s commitment to purchase the C-130J for its Special Forces, is actually a very important indicator.  I think it may be, in fact, the biggest ever defense purchase that India has made from the United States.  There have been others in the last few months, like, for example, the transfer of the USS Trenton, and other smaller purchases for Special Forces equipment, etc., etc., along the way.  But we have just opened this door.  There’s really no telling, at this point, how far we can push it. 

 The third area is defense industrial cooperation.  I see this as being an avenue that will increasingly become important in the future, for the simple reason that it meets the interests of both sides.  At the Indian end, the Indians are not interested in a pure defense trade relationship that simply involves buying off the shelf.  They’re very interested in buying equipment off the shelf leading up to a transfer of technology, or some kind of domestication of technology.  Their whole procurement process, which has a heavy offsets component, which is very controversial, clearly indicates that they are thinking of defense trade as a stepping-stone to defense industrial cooperation. 

If we are to make breakthroughs in the Indian market, defense trade inevitably will be the leading edge of defense industrial cooperation.  I think there are significant barriers to making this successful, but I at least want to flag this as being an issue area where we are likely to see important developments in the future. 

The fourth area is the whole question of joint research and development.  And, again, this is an area where India has expressed a great deal of interest in, for the reasons that all of us are very familiar with, that India does not want to be a simple recipient of technology from the outside.  It wants to become a partner whose foreign relationships actually end up improving its own defense industrial base.  And, so, the idea of joint research and development is seen as a means of providing technology injections to improve India’s defense industrial capabilities. 

For those of you who know the Indian Defense Research and Development Organisation, you must know that there is a very large operatus in India.  In fact, it’s an operatus that is not always performed at par.  And, so, its attempts to reach out to foreign partners, especially the United States, are driven very much by a calculation that these partnerships would end up strengthening India’s defense research and development capacity. 

In the last few years, the United States has put in place institutional mechanisms to at least begin a conversation to take us in this direction.  We have a variety of working groups that have looked closely at the questions of technology cooperation research and development.  I think progress has been slow, and I’m going to talk about why, again, when I talk about the obstacles and the promise.  But, again, this is an area where I think we have some promise. 

The last area, and this is, in some sense, the proof of the pudding, is the whole question of joint operations.  Obviously, from a U.S. perspective, the strategic rationale for the partnership with India is that eventually we hope we can operate together.  We can operate on a variety of missions, depending on circumstances, where we can, in a sense, exploit each other’s competitive advantage.  This is the vision that has driven the partnership on both sides, and, very importantly, from my vantage point, this is a vision that has not been repudiated in India. 

Now, there are constraints and there are caveats that always come when Indian interlocutors discuss the question of joint operations, but no one has said prima facie that there is no way that we are going to operate with the United States in any imaginable circumstances.  No Indian official has ever said this.  This, to my mind, conveys what I think is the revolutionary transformation in India’s own national strategy as it were, and in its thinking about its relationships with the United States.  Whatever we have done so far I think has been relatively small in comparison to its potential, but, again, in absolute terms, not insignificant. 

To just give you a simple example, the cooperation that both sides demonstrated during the tsunami was nothing short of spectacular.  It was nothing short of spectacular, actually, for a range of reasons that are not commonly appreciated.  First, the Indian ability to generate the forces that were required on such short notice, and bring those forces to bare, in an area of the world that is not exactly adjacent to, although some areas of the operation certainly were adjacent to India, certainly left us with a profound admiration for the professionalism of the Indian military. 

The exercises that the U.S. and India have conducted in the last several years, the aid to Iraq exercises, for example, have left U.S. operators with a very impressive sense of how good the Indians are at what they do.  Whether we can now take this further into operations in the real world is really going to be the test.  I think, that this is an area where progress will be made in measured steps, but the fact that the Indians have not rejected the idea of operating with the United States, and have actually demonstrated it in at least one case - the case of relief operations - is a very good portend of things to come. 

Let me take just a couple of minutes to talk about the impediments; why haven’t we moved faster than we have.  I think there are impediments that are real on both sides and which need to be recognized.  In India, there are at least four major impediments that are worth thinking about. 

First, the nature of coalition politics in India.  The Prime Minister of the day may want to do much, but the fact that India’s national politics is dominated by coalitions, which feel more uncomfortable than India’s Prime Minister’s may be with working with the U.S., always acts as a break on how quickly India can move. 

 The second element is India’s labyrinthine bureaucracy, which takes forever to conclude matters, especially matters of procurement where you can begin a process in one generation and then conclude the process many, many generations later. This pace is completely commonplace in India, completely acceptable, but a pace, obviously, that is not in sync with the rest of the world. 

 The third is the asymmetry in the size of the U.S. and Indian bureaucracies.  This is really a paradox because even though the processes in India are labyrinthine, the actual number of people who are assigned to working defense cooperation issues is very small, and actually quite beyond the capacity of the Indian state to sustain.  Defense cooperation in India does not have more people than exists on the digits of my hand.  These same people were running this office in 1998 when we had zero defense cooperation, and these same people are running that office today, in 2008, when our defense cooperation has multiplied ten fold.  And, in contrast, if you look at the U.S. bureaucracy, almost every office in the Pentagon, in the NSC, in the State Department, has someone who either works full-time or can be allocated to work the India cooperation account.  We just simply don’t have this analogy in India. 

 On the U.S. side, I think there are two or three big issues.  The first issue is the question of the regulations in the United States with respect to how technologies are transferred.  Those regulations were designed at a time when we were essentially in a Cold War context.  It will take some time to change those regulations.  I think the process has begun, but it is still not complete. 

There is a second impediment, and the second impediment is that we still have to make our minds up with respect to how willing we are to move towards a full defense partnership with India, and this implies transfers of technology, sharing of critical information, etc., etc.  Again, I see this as part of the maturation of the process; it’s not something that can be done overnight.  But the process has begun; we have become far more liberal in what we are willing to supply to India, both in terms of technology and in terms of information.  I think we have simply opened the door in this regard. 

 Let me just end by saying, what do I think is the future of U.S.-India defense cooperation.  This is something we can talk about further in the Q&A.  I think the future is actually extremely bright.  I’ll just point to two important reasons why I draw that conclusion.  First, there is a strategic alignment of our interest today that simply has not existed in the past 50 years.  Second, we are in an international system where India actually has few alternatives for defense partners.  When you look at partnership as being a composite in terms of quality of capabilities technologies, and willingness to work with India in ways that are very transparent, incorrupt and upfront, India has few options. India has many defense partners in principle, but there are very few partners outside the United States that actually meet these criteria that I have outlined. 

And, so, even though the universe in principle looks large, the universe of alternatives to U.S., when you actually start stripping away layers of the onion, that can provide India with really sophisticated technology, that, after sales, have support packages that are second to none, that are willing to do business in a very transparent way, and that are willing to do business without engaging in corrupt practices, and, therefore, ensuring a certain predictability in terms of the long-term relationship are virtually none. 

And, so, given the complimentality of these two realities, the convergence of strategic interest, and the attractiveness of the U.S. as a defense partner, to me, this is simply the opening of a door that won’t shut any time soon.  Thank you very much.

 Lisa Curtis:  Well thank you all for coming today, and thank you, Chris, for inviting me on such a timely topic, to be meeting at the very time that the Secretary of Defense is in India.  I’d like to start by giving a little bit of context to the India-U.S. relationship, and then to get into the specifics of today’s topic, which, of course, is the defense relationship. 

 I think the Secretary’s visit is both practically and symbolically important.  Symbolically, I think that when we in the South Asia policy community think of Secretary Gates’ trip, we think of his very famous mission in May 1990, to try to diffuse a border crisis between India and Pakistan when he was serving as Deputy National Security Advisor. 

The U.S. relationship with India has changed dramatically since then.  India is no longer seen through the South Asia prism, and is seen as an emerging global power in its own right, and one that is likely to play a significant role in contributing to the security and stability of the broader Asia region.  Practically speaking, Secretary Gates’ current mission to the subcontinent can help solidify our military to military and our defense trade relationship, which I would argue must be the cornerstone of our broader strategic relationship. 

 I would argue that U.S.-India relations really started to improve in the early ‘90s after India began liberalizing its economy.  But, at that time, the lingering mutual suspicion, because of the Cold War, Indo-Pak tensions, which had resulted in three serious military crises between the period of 1990 and 2002, and, of course, the 1998 nuclear test really precluded any genuine strategic engagement.  President Clinton’s famous visit in 2000 created a lot of good feelings between the two countries, but it really wasn’t until President Bush came into office with a clear and strong vision for where he wanted to take the relationship with India, that we began to see a substantive shift in our ties. 

India’s expanding economy, as I said, was a primary driver to building this relationship, but I would argue that it wasn’t until after 9/11, when U.S. officials realized how significant India’s example as a multi-religious, multi-ethnic democracy was, that the ties gained an ideological foundation.  This is why India so often is referred to as a natural partner.  We see strong bipartisan support in Congress for this relationship.  Some congressional members even say that the U.S. relationship with India could be one of the most important in the 21st century. 

 But despite this broad consensus in the U.S. on moving closer to India, there is still a debate within Indian strategic circles and Indian political circles over the extent to which it wants to associate itself with U.S. power and policies.  Many of India’s policy elites envision India becoming a major pull in a multi-polar world, and they want to insure India maintains its strategic autonomy.  The leftist parties, which, of course, the Congress-led government relies on to stay in power at the center, are particularly skeptical of U.S.-India ties, and they would like to see India prioritize other relationships in part to check America’s global influence. 

At the same time, we see an emerging generation of Indian foreign policy thinkers who view a strong relationship with the U.S. as essential for India to achieve major power status, and they want to develop a new framework for these ties.  I think we’ve really seen this debate come to the fore over the last seven months as the leftist parties have objected strenuously to the completion of the U.S.-India civil nuclear deal on the grounds that it would tie India too closely to the U.S., and jeopardize its independent foreign policy. 

 Without a strong military to military relationship, and healthy levels of defense trade that would lead to inner-operability of our forces and co-production arrangements, the U.S.-India relationship will lack substance and depth.  Military to military contacts, as Ashley pointed out, have improved considerably since 2001 when the defense policy group meetings were reestablished. 

We’ve had extensive training exercises, maybe 50 or more, but, although we’ve seen this, the defense trade relationship has been much slower to develop.  The recently agreed sale of the C-130J’s, hopefully, will mark the beginning of a substantial defense trade relationship.  Within the context of the stalled civil nuclear deal, the announcement of the sale was certainly a welcome development. 

Washington is watching very closely to see what happens with the tender for the 126 fighter aircraft, in which U.S. companies, Lockheed and Boeing, are competing with Russians, French, Swedes and a European consortium.  I understand that the opportunity for companies to bid on this was extended to late April, it was originally going to close in March. 

 Certainly, India’s military market is one of the fastest growing in the world, and it will become a key leverage point for India to use in its relations with major powers.  Some analysts see India purchasing around $40 billion worth of arms over the next five years.  As Ashley mentioned, India has long relied on Russia, with about 75-80 percent of its existing military equipment of Russian origin. 

However, we see Indian military personnel complain about the quality, the reliability of the Russian equipment, you still see an appreciation for the fact that Russia has been willing to share sensitive technology through all the ups and downs, through all the regional crises, etc.  I do think the Indian strategic planners realize that the U.S. has the advanced weapon systems that they’re interested in.  Another advantage, of course, is that U.S. military sales involve U.S. companies fulfilling their offset requirements which can help stimulate India’s economy in many ways. 

 So we’ve seen the Indian defense community complaining that questions about U.S. reliability as a supplier have dissuaded them from buying American.  The civil nuclear deal, of course, was aimed at trying to get over some of those suspicions and bringing Washington and New Delhi into closer alignment, particularly on the nuclear issue.  The signing of the 10-year defense framework agreement in 2005 has helped boost confidence between our two militaries, but, as Ashley pointed out, there’s still some distance that we have to go. 

 I want to talk a little bit about missiles and missile defense because I think this is a marker of how far the U.S.-India defense relationship has come, in fact, the overall relationship.  I think the U.S. position toward Indian missile development and Washington’s interest in discussing missile defense systems signifies that our confidence in each other is increasing.  Throughout the 1980s and 1990s, the U.S. looked with a great deal of suspicion on India’s development of missile technology, and viewed its program mainly with respect to Pakistan. 

Now, however, I think U.S. officials look at the modernization of India’s missile programs as an opportunity to enhance our own cooperation, and as a way to check Chinese influence in the region.  In fact, India was among the first countries to strongly support U.S. moves away from the anti-ballistic missile treaty, and toward the national missile defense program unveiled by President Bush in 2001. And the U.S. and India, have, of course, engaged on the issue of missile defense ever since it became the fourth plank of the next steps in strategic partnership in early 2004. 

 Pakistani reaction to the U.S.-India cooperation on missile defense has been interesting and varied.  The Pakistanis have used the occasion to request their own missile defense cooperation from the U.S., but, at the same time, they’ve downplayed the potential for an Indian program, arguing that it would not be economically feasible for India to develop an effective missile defense system. 

 I want to end by talking a little bit about the civil nuclear deal.  I know this has consumed our discussions over the last two and one-half, almost three, years, and we may not want to keep discussing it, but, I think it’s still very much on our minds.  We saw, in the face of the growing pressure from the leftist parties, Indian Prime Minister Singh announcing on October 12th of last year that he would slow negotiations with the U.S. on the civil nuclear deal.  This announcement came as a surprise, shock, I might say, disappointment, certainly, for the U.S. Administration who had spent over two years negotiating the deal and convincing a very skeptical U.S. Congress to support it. 

With the U.S. presidential election looming, the Indian government is starting to lose time in terms of building consensus within India for completing the safeguards agreement.  I understand they’re in the fifth round now of those negotiations, and then will need to obtain a green light from the nuclear suppliers group, all which has to be done before the U.S. Congress would vote on the deal before summer recess. 

 It is clear that the top levels of the Indian government remain committed to the deal.  Last week, in fact, former Foreign Secretary, and now the envoy to the nuclear talks, Shyam Saran, noted that those opposed to the deal in India had lost sight of the bigger picture.  Speaking to those critics who complained that the deal would tie India too closely to the U.S., Saran argued that the Indo-U.S. nuclear deal was important because it’s only the U.S. that could lead the process of opening up the existing global non-proliferation regime to accommodate India’s interest. 

 So we’re in a situation if the left parties don’t back down, the government will either have to continue to keep the civil nuclear negotiations on hold, or call a confidence vote, which, of course, would likely lead to early elections. 

 The situation does look a bit grim from our vantage point, but, I would note that every step of this process, as Chris pointed out, has looked impossible until it has been done.  If history is any guide, then it may be too early to put the final nail in the coffin on the agreement. 

 Certainly, the civil nuclear deal is the core of a larger vision for the U.S.-India relationship, and it’s a vision that has obviously alarmed some parties in India.  Rejection of the deal would be a setback for the realization of this vision.  Missing this opportunity to finalize the deal would be a setback both for India’s relationship with the U.S., as well as its reputation as a major world player.  If only for a brief period, the United States and India would likely approach new initiatives with lower expectations and much more circumspection. 

However, since this is a vision that remains the best hope for providing stability and security in Asia and beyond, it is likely that the two sides would find ways to kindle the relationship through other aspects and especially through a stronger defense and military to military relationship.  That concludes my remarks, thank you. 

 Timothy Hoyt:  I should point out you can tell who still works for the United States government, because I have PowerPoint, and I will try and use this PowerPoint actually in an instructive way rather than simply pummeling you with data, although that is definitely an option.  It also allows me to put up my disclaimer, which says that although I do work for the United States government, these views are my own; they are not those of the United States Navy, the Department of Defense, or any other government agency. 

 Now, to think about the U.S.-Indian defense relationship, we have to start by thinking about how India sees the world.  I think that that is fundamental because India sees the world in a very different way than the United States sees the world.  India’s threat matrix is fundamentally different, and even though the Cold War is over, that threat matrix has expanded, rather than contracted, since 1990. 

We all know, and I won’t go into detail here, of the problems with China: a 1962 war that ended in a humiliating defeat for the Indian armed forces.  China still maintains control of a significant portion of territory that India has a national claim to. 

Both the United States and India look at Chinese interest in the Indian Ocean with some concern.  However, we should also note that that interest in the Indian Ocean is natural because China is becoming the world’s leading oil importer, and that oil is coming through the Indian Ocean.  It is natural that China would be concerned about that.  Still, as that presence grows, it will become a common interest. 

Second, India has to worry about Pakistan.  This relationship not only has to do with ongoing territorial disputes, most significantly Kashmir, but also with Pakistan’s links to international terrorism, which are simply indisputable, and had been inflicted on the Indian public for a period of over 20 years. 

More important for India recently is the development of genuine internal security threats.  The Naxalite Movement has now spread across large portions of India, and the violence against Indian police and security forces continues to increase.  It has been identified by India’s Ministry of Home Affairs as the single greatest threat to Indian security. 

More recently, however, maritime issues have become very important.  India has always had a maritime vision but it has rarely had the resources, the will or the capacity to do much with that maritime vision.  Since the end of the Cold War that has been expanding.  India recognizes that two-thirds of the world’s oil trade goes through the India Ocean. 

India also recognizes that there are many, different small problems in the Indian Ocean, problems with which it can cooperate with the United States, be those problems trans-national crime, terrorism, drug trade, arms trade, or any of a number of other issues that have to do with good order at sea, and the free use of sea lanes in the maritime commons by the entire international community. 

Last but not least, there is the nuclear question.  I’m not going to go into that in detail because we’ve talked about it for years.  I’m sure we can deal with that in the Q&A.  However, the fact that now the nuclear equation does not just include Pakistan and China, but may include Iran, is a significant issue that India will eventually have to deal with. 

Now, opportunities.  At the same time, since the end of the Cold War, there have been significant opportunities for India, at least in part because the resources that are available for spending on security issues have skyrocketed.  This is the result of India’s economic miracle, which resulted after 1990, of opening markets, of India suddenly achieving growth rates that average between 7 and 10 percent for over a decade.  This allows India to spend much more money on defense, even though the percentage of gross domestic product that it spends on defense declines every year.  There are simply more resources available for the spending.  This allows India to acquire more capability if it desires it, and there’s evidence that it wants it. 

It also, as I think Ashley pointed out, this transformed relationship with the United States is really deeply meaningful.  It is extraordinarily important.  We have to remember not only how far we have come, but, where we have come from.  Remember that the U.S.-Indian relationship simply was not that positive throughout the Cold War.  There were serious differences in national interest.  There were serious differences in foreign policy. 

This is fundamentally changing, and it’s changing for a number of reasons.  One is economic interaction, a second is the growth in the United States of an Indian domestic population that is powerful economically, that is committed politically, and that also has contacts back home.  Many of the suspicions that Indians had of Americans, and vice versa, are being ameliorated by this domestic constituency.  Equally important is this new international security relationship, which starts with Kicklighter exercises in the 1990s, and continues up through today.  The military to military contacts are very important because they help to assuage a long-standing Indian tradition of suspicion of U.S. military force in the region, and of U.S. motives. 

Now, here I’m going to beat you to death with data, but I promise I won’t spend too long on it.  The important issue here, first off, these figures include Indian military pensions, so they look a little bit different than the official Indian figures.  Indian military pensions run roughly 13 to 16 percent of this figure in any given year.  They’re a substantial expenditure, but it does indicate that India’s defense expenditures have increased significantly since 2001.  They grew roughly 60 percent, perhaps a little bit more, between 2001 and 2006. 

There have been two large spikes in Indian defense spending since the end of the Cold War.  The first is not on this chart because I couldn’t fit it on a PowerPoint and still allow you to read it.  That was in 1999 and 2000.  The second, as you see here, is in 2003-2004.  Each of these spikes came after a nuclear crisis with Pakistan.  India’s regional security environment does play an important role in determining its defense spending. 

Now, another issue that’s worth thinking about is how India is spending this money.  Roughly 20 to 30 percent of the total budget is available for procurement in any given year.  That number tends to be below 25 percent right now, although the Indian government is trying to spike it up.  I’ve divided it here between the Army, the Navy and the Air Force.  This is important because if you think about how the Indian military is structured, it is Army dominant.  Of 1.3 million people in the active Indian military, 1.1 million are in the Army.  This is a huge and dominant command structure. 

But, as you can see, the procurement is shifting.  The Army got a dose in 2003-2004, but it has leveled out.  The massive amount of capital expenditure increase is going to the Navy and the Air Force.  The Indians are more interested in high technology, in force projection, and in regional reach.  Seventy-five percent of the budget is still spent on pay allowances, training, welfare and exercises. 

According to the Indian Defense Minister last year, although the $40 billion figure for five years may be the total amount of procurement that India will spend over the next five years, the Indian Defense Minister last year said that Indian would import about $35 billion of foreign equipment into the military over the next 20 years.  So, remember, a lot of India’s military spending will take place at home.  Those procurement funds will be spent in the local industry. 

Last, but not least, the share of the defense budget for the Army is plummeting, but the manpower is not.  That is going to have an impact on India’s military capability.  It creates a dysfunction right now between the Indian Army’s desire, I’ll talk about in a moment and later in the Q&A, between the Indian Army’s desire to create dramatic, new, high technology ground forces, and the resources that will be available to accomplish that.   Now this can change, again, depending on the government, and the budget share that’s allotted.  But, at the moment, the Indian Army is becoming increasingly obsolescent and under-funded. 

Key elements of Indian defense modernization efforts.  There are, of course, strategic forces.  The nuclear question has dominated U.S.-Indian relations for 20 years.  India has come a long way.  They have established a strategic force command.  They have developed a nuclear doctrine that is public.  They are developing delivery capabilities, and they’re developing a wide range of delivery capabilities.  Not only does today mark the date when the Secretary of Defense visits India, it also marks an Indian submarine launch ballistic missile test.  It’s unclear, yet, from Indian reports, whether they consider that a success or a failure, but India is developing not only land based forces, but also a sea based deterrent, based around locally designed submarines, sea launched cruise missiles and sea launched ballistic missiles. 

Other parts of Indian defense modernization efforts include the development of jointness.  This is not going quickly, but that is not surprising; it did not go quickly in the United States either.  I work for the U.S. Navy, I enjoy working for the U.S. Navy, but it took the U.S. Navy 20 years to recognize that jointness was a good thing.  It’ll take a while. Jointness is the kind of thing that tends to have to be imposed from above.  Right now, Indian governments are not interested in doing that, for one reason or another.  We can, again, discuss that in the Q&A. 

You have the development of Army doctrine in response to the cargo crisis of 1999 and the 2001 and 2002 compound crisis, both of which had a nuclear dimension.  The Army wants to be able to respond rapidly in a limited fashion to Pakistani threats and Pakistani escalation. 

You have an increase in force projection capability.  The Indian Air Force in the last couple of years has acquired air-to-air refueling capability for the first time.  This is going to allow it a lot more presence in the region.  It is acquiring sophisticated air early warning and surveillance systems. 

The Indian Navy is very interested; it has just released its maritime military strategy.  It’s interested in maritime domain awareness, in reach and sustainability.  Both of those are identified as, and I quote, “thrust areas,” in Indian Naval capacity.  They’re also interested in anti-submarine warfare, in anti-air capability and in expeditionary capability. 

To achieve any of this, however, India has to modernize its weapons.  The existing stock is obsolescent.  There are vast numbers of MiGs that date back to the 1960s and early 1970s.  The Navy is running ships that are very, very old.  Some submarines are still in the force posture, even though they are dangerously old.  Replacing obsolescent weapon stocks is fundamental to Indian military capability.  This is where defense production reform and the arms trade that both Ashley and Lisa alluded to are going to be crucial to India, and where America is going to be fundamentally involved. 

Thinking about the history of Indian procurement is very different from thinking about the history of American defense procurement.  India emerged from colonization in 1947, and what it wanted to do was make sure it could never be colonized again.  It wanted to have the most modern, the most sophisticated military capabilities, so it could never again be overrun by an outside power.  I emphasized multiple sources, choosing non-alignment, buying primarily from the British, the French, and then eventually from the Soviets because they got particularly good terms of trade. 

There was an emphasis on domestic production.  They produced things under license, and they also set up a large, very centralized state control defense infrastructure, which includes, now, eight defense public sector units, and 39 or 40 ordinance factories.  These produce the weapons for the Indian Army that are produced at home.  There is an emphasis on indigenous design and research.  Ashley alluded to the Defense Research and Development Organization.  I can only say that its record is, in the most optimistic evaluation, spotty. 

There was a minimal role for the private sector.  India’s economy, as it was set up after independence, was Fabian socialist.  Weapons were to be under the control of the state, not put in the hands of dangerous, private enterprise types, who might go and sell them to other people.  This has created an enormous complicating factor in Indian defense production.  

First off, the Indians have always had to rationalize the fact that on the one hand they can’t produce the weapons they want at home, but, on the other hand, they don’t want to get overly reliant on any one supplier.  This leads to a tension between whether bad to mediocre weapons should be designed and produced indigenously, or mediocre to good weapons should be imported from abroad and produced under license, or whether they should just go and buy the top of the line stuff on the arms market.  That has always been a complicating factor in Indian defense procurement. 

The issue of licensed versus indigenous production -- do you buy things, do you buy technology and then produce under license, or do you try and develop whole new systems yourself?  DRDO has consistently reinvented the wheel as part of its research and development programs.  That means that programs that DRDO works on tend to come in over budget and with long, long time delays.  On the other hand, at least in theory, that then secures the technology for India to use and to replicate at home. 

However, there are strong structural and institutional impediments to technology absorption as opposed to acquisition.  In the case of Israel, Israel imports defense technology, absorbs it, and then scatters it not only to the defense industry, but also to the private sector.  This is why Israel has a world-class electronics industry, why it has world-class defense electronics and computing.  The entire nation’s economy absorbs this technology, and then applies it to other sectors. 

The Indian defense industry has specifically been designed so that cannot happen, and it does not happen.  India has spent billions of dollars designing aircraft, or building aircraft under license, but that technology has not been transferred to a civilian aircraft industry because it can’t be under the existing domestic infrastructure. 

Also, there are questions of global versus regional standards.  The weapons that India has produced have, by and large, been sufficient to win its wars against Pakistan.  They are, at this point, by and large, sufficient, should it come to it, to perform well in a conflict against China.  Now, they may not be as good as NATO, they may not be as good as the United States, but they may be good enough.  So, at what point do you begin to prioritize in your procurement between hitting the highest standard, or hitting the standard that you probably need?  And if you look at that standard, India may not have done so badly. 

Last, but not least, a couple of other institutional issues: the weak bureaucratic position of the military.  Civil military relations in India are dominated by the civilians.  The military has very little input into defense procurement decisions.  It’s not that it has none, it just has very little.  At the end of the day, civilians are making decisions, and many of those civilians continue to have an institutional distrust of the military. 

There are also contracting difficulties.  There have been problems, as Ashley mentioned, with corruption, an inability to spend procurement funds in a timely manner, so that then those funds disappear from the military budget and go back to the Treasury, to the Ministry of Finance. 

Indian reform is necessary for significant improvement in joint production and joint R&D.  At the end of the day, when Ashley said, this is a good area for the United States to move forward, and that is true, but we can move no more quickly than India itself will allow us to move, and all of this is premised on India’s ability to reform itself. 

Now, there are some good signs.  I’m not going to try and pronounce the Hindi, because I’m just not very good at it, but this RUR program is the first systematic attempt to get the Indian private sector into the defense industry.  Firms can be allowed basically the same economic benefits that the public sector defense units are allowed in terms of importing technology and equipment, in terms of competing for public sector defense contracts. 

This is a five-year grant that can be renewed by the government.  It will allow Indian private firms, which have top of the line quality standards, to begin to compete in important areas of the Indian defense infrastructure, especially if you think electronics and computing would be areas where private firms could rapidly move in and make fundamental changes in the way that India does its defense business.  This will probably take time, it will probably meet with bureaucratic resistance, but it is a very fundamental change in the way that the Indians have done their defense procurement and their defense production. 

What have the Indians learned from all this?  The first is, the value of soft power.  India’s economy has allowed it to take a new place in the world, and it has had a whole bunch of very interesting spin-off effects.  It has greater international influence.  This allows it to create new partnerships.  India wants a strategic partnership with China at the same time it has a strategic partnership with the United States. 

This is possible because India’s definition of strategic partnership means normal diplomatic relations between great powers.  That may mean something different than what we think strategic partnership means.  And it’s important to consider that as perhaps a significant constraint in the development of this relationship.  We may be engaging in some kind of constructivist activity by redefining words in different ways. 

However, more resources are available, and there is more public support for spending those resources on security in ways that make the Indian nation take a greater role in the international community.  Private sector involvement will help defense production.  It will increase quality.  It will create greater domestic competition, which is a fundamentally good thing for India, and an area where the United States can get engaged. 

On a note of caution, elements of the Indian leadership and society still have a deep and profound distrust of the United States.  This is not to say that it is a majority opinion.  This is not to say that we are going to go back to the Cold War days.  It is simply a note of caution.  In discussions with Indian leadership, it is clear that there are still Indian leaders who are very reserved about the relationship with the United States for good historical reason.  They are very concerned about a relationship with Pakistan. 

They are very concerned about our interest in controlling technology.  Technology acquisition is going to remain an Indian priority.  That will slow the relationship in some ways because the Indians would like us to simply change our laws.  Well, laws do not change that easily in the United States, particularly when they’re laws that have been on the books for almost 50 years. 

Export controls remain an issue that we will have to work through over an extended period of time.  I would suggest the transformation is going to take place on Indian terms, not on our own.  It’s going to take place much more slowly than we would like to, even though we see this enormous growth in the relationship, even though we see how this relationship has changed so much in such a short period of time.  It’s worth, again, reflecting on where we came from, because if your baseline is low, change may be rapid.  Where we want to get to may still take a great deal of time, a great deal of patience, and a great deal of diplomacy.  And, with that, I’ll stop, and we can talk about other issues in Q&A.

Christopher Griffin:  Thank you all three for just excellent presentations.  Shifting to Q&A, we have about half an hour left, very basic rules: please state your name and your organization, please wait for the microphone which we’ll have coming around the room, and please phrase your statement in the form of a question.  Very quickly, I’ll abuse the prerogative of the moderator, and ask one quick question. 

In all of your presentations you seem to have varying degrees of optimism and varying degrees of caution with which to temperate.  Do you see truly fundamental pitfalls to the relationship or to India’s growing into this role as a great power that it sees itself filling?  Is there anything that should truly block the trajectory that at least Indian policymakers seem to foresee themselves upon? 

Lisa Curtis:  I don’t think I see any fundamental pitfalls or obstacles.  I think, as Tim was pointing out, it might be more in terms of the pace of the relationship and Americans may be not as understanding of why things can’t move as quickly.  For instance, I pointed out the defense trade relationship, for one, has been pretty slow in developing, despite, what I would say, enormous investment by U.S. Administration officials to try to appease India over some of these concerns about transfer of technology. 

We have come a long way.  I remember in 2002, I was in India when Congress announced, or rather the Administration announced, the congressional change that items under $14 million, defense items, would no longer have to be notified to the U.S. Congress, putting India on the same level as Japan and South Korea in terms of importing defense items.  So I think we have seen changes in the way the U.S. handles exports, sensitive exports, and I think there is an expectation that this should help clear the underbrush, clear the suspicion, and move the relationship on to that next claim. 

So, I think I don’t see any fundamental obstacles or anything tremendous happening, but it may just be more of each side having a different view of the pace of the relationship and that may cause some complications. 

Timothy Hoyt:  Let me piggyback on something Ashley said earlier, because it’s always good to use somebody else’s great idea when you can.  It makes you sound very learned.  Ashley made an interesting remark about capacity, and I think that that, in the short-term, is going to be, in some respects, the most dangerous issue, the ratio between Indian capacity and U.S. expectations.  If you think about it, what does the U.S. do whenever we change a relationship with somebody?  Well, we have lots of people at the Pentagon and in the State Department who can get tasked to do things, and they are given lists of things to do. 

The first thing that you need to do, if you are the member of a working group, especially if you are the leader of a working group, is to have a meeting.  So you have a meeting at home.  That’s fine.  It doesn’t involve any Indians.  But then to show that you’re making progress, you have to go over to India and have a meeting there.  Now, that’s fine if there are one or two working groups.  When there are dozens of working groups, and the people that you’re talking to have only limited numbers of people who can make decisions, and, by the way, they also have portfolios.  The NEA has a section of the Americas, not a dedicated section for the United States, a section of the Americas that includes our entire hemisphere.  There aren’t that many people who can make decisions in that group.  If we start sending dozens of working groups over, asking for rapid decisions, eventually we’re going to get stonewalled, and then U.S. bureaucrats come back very frustrated because we know how to do this, we can do this in Washington.  Right?  We all get on the Metro, we go over to the Pentagon, we have a meeting, we fill all the checklists, we get new working points, and we go off to do things again. 

It’s not happening that way, and it’s not going to happen that way.  We have to temper our expectations and recognize that this is going to move slowly.  That probably means that we really have to be very selective at prioritizing what we want motion on, and finding a way to put all those other working groups a little bit on the backburner and not have expectations of immediate success for them. 

I think that that may be a big issue in this relationship in the near-term because it will appear as though things are moving very slowly, when, I would go farther than Ashley, we are plodding inconsistently with military to military cooperation.  I think things are continuing to accelerate in some very meaningful and positive ways.  However, one of the reasons that this is happening is that we’ve dialed back a little bit on some of this pressure over the last year. 

Ashley Tellis:  I concur with both the points made.  There are issues of pace and there are issues of bureaucratic impediment.  I think there’s one more, particularly at the Indian end, and that is the capacity of leaders to carry the polity along.  One of the most distinguishing elements of the post-’98 period has been initiatives that are very bold, but initiatives that are taken by individual leaders who are actually far ahead of their own domestic politics. 

You see this with Mr. Vajpayee, in the first Bush Administration; you see this with Mr. Singh, in the second Bush Administration.  In both cases, what you have are visionary leaders who boldly march forward and then are tugged back, essentially, by the constraints of their own domestic politics.  I don’t see this changing any time soon.  And, so, I would add that as the third in the list of constraints that we will have to find ways of managing. 

Male Audience Member:  Thank you. It was a great and educational event this afternoon.  Two quick questions.  One, recently, U.S. Senators have given an ultimatum on the U.S.-India civil nuclear deal, and they said now or it will die by July.  Was the ultimatum from the U.S. lawmakers or from the Administration? 

And, second, as far as military to military and defense relations with the U.S. and India is concerned, I think many people in India in the government and also the Indians in common, they feel that why they’re not trusting the U.S. is because of U.S. and Pakistan military to military relationship, and they say that we cannot trust the U.S. because most of the U.S. aid going to Pakistan is against India and spending on the Pakistani military rather than educating the people or turning terrorists into the common people like other countries in the U.S. and in India.  Pakistan is a hub of terrorism, and all the U.S. aid is going to feed the terrorists in Pakistan. 

Lisa Curtis:  I think in reference to the second question, we have to keep in mind the fact that India is also interested in stability in Pakistan, and whereas there may be differences on the U.S. approach, or where exactly the U.S. has allocated its assistance, I think there’s an understanding that there needs to be a U.S.-Pakistan relationship in order to encourage stability in that country, particularly now.  I don’t think we see the same kind of knee-jerk reaction in terms of the U.S.-Pakistan relationship, and vice versa, I don’t think we see it in Pakistan in regard to the U.S.-India relationship. 

The Bush Administration, as I pointed out in my remarks, has definitely separated the two relationships.  That hasn’t always worked perfectly, and I pointed that out in terms of the missile defense discussions  There are still issues that the U.S. has to keep in mind as it moves forward with each country individually.  But, clearly, in terms of the vision, I think it’s much different than it was throughout the ‘80s, ‘90s, in that the U.S. has different objectives in terms of its relationship with India, which have more to do with east Asia, looking east, and with Pakistan; it’s more promoting stability, countering terrorism, and other things that are also in India’s interests. 

That said, I agree that there is a question from our own U.S. Congress on whether the assistance has gone exactly where it should have gone.  But, in terms of the overall idea of providing assistance and having a relationship between the U.S. and Pakistan, I think Indian officials, by and large, realize that’s also in their interest. 

Ashley Tellis:  I endorse everything Lisa said.  I think if there is a residue of discomfort on the U.S.-Pakistan relationship it’s probably more in the popular perception than on the part of the leadership.  The Indian leadership recognizes very clearly that there is a difference in how the U.S. relates to Pakistan and how the U.S. relates to India.  I don’t think there’s any doubt in their minds about it.  The magnitude and the complexity of the two bilateral relationships clearly show that we have de-hyphenated quite successfully.  In fact, if you were to ask me in 2001 whether we could have de-hyphenated as successfully over the next eight years, I would not have been someone who would bet on it, but we actually managed to do quite well. 

On the question of the ultimatum, I think there was no ultimatum.  I think it was the way in which the press spun it.  First, it didn’t come from the Administration.  These are lawmakers who were giving India their best judgment about what would be required to make this succeed.  I don’t think there was ever an intention to compel the government of India to do more than the government of India wants to do. 

But it was a reminder that this is something that is subject to the constraints of a calendar.  And, so, they just wanted to make the point that there are windows, and if you miss those windows, then you’re taking a big risk if you hope that something like this will come back again.  I think it was more in the nature of friendly advice and really a reminder of our own constraints, rather than an attempt to coerce the government of India. 

Timothy Hoyt:  Just briefly, one other issue that perhaps the Senators were alluding to is that both India and the United States are undergoing an election cycle right now.  I think the fact that both countries are undergoing an election cycle is going to provide natural constraints on whether this can get done before two new governments take power, and I think that’s what the Senators were referring to.  If you want to get it done before a new U.S. or a new Indian administration comes in, this is the timeline that you have to work on from our side, not an ultimatum so much; it’s just an effort to lay out what the ground rules are going to be. 

Christopher Griffin:  There we go back to the nuclear deal.  The gentleman in the white shirt up front, please. 

Male Audience Member:  Thank you.  My question is for Dr. Tellis, can you give us some sense of the nature and structure of advanced scientific R&D within India, is it more university based, is it increasingly based in private corporations?  We read that India is accelerating, in absolute numbers, the numbers of scientists and engineers that they’re producing every year.  They are leaders in software development.  Is most of this, where did this policy originate, and is it geared more toward assisting the private sector, and what might happen? 

Ashley Tellis:  If you look at the totality of Indian R&D, the bulk of Indian R&D actually is done in state institutions, and, there is, in fact, an elaborate R&D infrastructure both on the civilian side and on the military side.  On the military side, of course, the key nodal agency is the Defense Research and Development Organization.  To the degree that there are other strategic sectors, like Atomic Energy and Space, the atomic energy program does its own R&D, the space program does its own R&D.  Between atomic energy, space and defense R&D, that really accounts for the bulk of India’s national R&D. 

On the civilian, there is a civilian R&D program, which is overseen by the CSIR, which is the Council for Scientific and Industrial Research.  But, again, overseeing, primarily, R&D done in public sector institutions. 

Now, this is slowly beginning to change, and it’s changing, I think, in two ways.  At the university level you see an increasing interest in doing what I think of as R&D in the basic research.  This is not research that necessarily has immediate commercial applications.  Indian industry, traditionally, has not done as much R&D as their counterparts in the west have.  And, except in certain key areas, like, for example, in software, in computation, in nanotechnology, in biotechnology, you will find areas where the Indian private sector has a predominant presence, but this is mainly because these are new disciplines that were not subject to past government regulation. 

And, so, it will be some time before the Indian R&D regime shifts from what is still state dominated R&D to the private sector.  Now, increasingly, as India liberalizes, this is an inevitable consequence.  But, again, there are issues of pace; one, it will not be fast, and, two, there are issues of scale, because the state is still the largest investor in R&D, and it is primarily R&D that is driven by strategic necessity.  And, so, the commanding heights of the Indian R&D sector, which is essentially atomic energy, space, defense, and, to a lesser degree, commercial science and technology, will continue to dominate the R&D market. 

Male Audience Member:  I guess I’ll pose this question to Ashley first, but invite others to comment too.  It has to do with the nuclear issue, but, as someone who worked in the U.S. government on both the nuclear issue and defense trade, I’m worried about negative fallout from the collapse of the first onto the second, particularly here in Washington, not so much in Delhi.  Ashley, you made a comment about the nature of coalition politics, and I hear a lot of Indians referring to this almost as a structural problem, that no mere human being can do anything about, but, isn’t it also a question of the sort of immaturity of the Indian body politic? 

I mean, this is an issue that is widely regarded by most newspaper-reading Indians as something clearly in the national interest, and yet the two major national parties cannot see their way clear to cooperating on it, and the BJP, which Ashley knows better than anyone, really kicked all of this off with the next steps in strategic partnership, which Lisa also mentioned, really, just played sort of petty politics with this issue.  Had they been able to hold some sort of vote just on this one issue, a vote of confidence, and drive the thing forward, I think we would be on to the next stage already.  So, I just wonder if you’d comment on the nature of Indian politics as it interfaces with the outside world.  Thanks. 

Ashley Tellis:  I’m really in two minds.  I don’t, by any means, want to give the impression that it is on the cusp of failure.  This thing will be dead when I say it’s dead, and I’m not ready to say it’s dead yet.  That would just mean that I’m a mindless optimist.  But, I think the last word has not been said, and I think Lisa was absolutely right, we need to be careful about premature burials of this initiative. 

But, having said that, the larger point that you make, is is troubling that something that is so clearly a godsend would be treated in the way that it is.  But I think you’ve got to think of it as a problem of competitive politics. 

My old boss, Bob Blackwell, always used to say that when domestic politics is at issue, no other outcome takes precedence.  I think this is a good example of the fact that everyone has agreed, including the BJP, that this is the best deal that India is going to get.  But the near-term prospect of being able to overthrow the guy who is currently in power and take his place is so alluring that you’re willing to give up on what is seen, in relative terms, as a more distant prospect. 

Unfortunately, I think as long as we are rational egoists, I don’t see any way of being able to overcome this.  If we win this, it will be only because domestic rationality works its way, and that domestic rationality will take the following form. 

The government will go to the left and say, look, we are ready to go forward, and if the price of going forward is your willingness to reduce your own term in office by a year, we’re willing to take that chance.  And then it gets kicked back to the communists who then have to decide whether their discomfort with the U.S.-India deal means so much to them that they are willing to give up one year’s worth of staying in power with all the benefits that one year’s worth of staying in power brings them.  And, so, again the issue will be decided in terms of cold, calculating, egoist politics.  I’m just hoping that that, they’ll make the right call. 

Christopher Griffin:  And, of course, it would seem that every day that they put off putting that ultimatum to the communist parties, the shorter the period of term they have to lose is.

Male Audience Member:  Thank you.  As far as I can tell, certain Indian sources have succeeded in creating something of a buzz, a rumor, if you will, about the potential sale of the aircraft carrier Kitty Hawk to India, at a low price, in exchange for a high price purchase of the aircraft that would go on the Kitty Hawk.  Just setting aside the notion, or the question of whether this is actually going to materialize as an offer from the United States, I’d just like the panel to explore this idea.  Would it overstress the Indian-American defense relationship at this point, or would it be viewed as an opportunity here in DC and in Delhi?  Thank you. 

Timothy Hoyt:  It looks like I get this hot potato.  To the best of my knowledge, that is a rumor that emerged.  I know that it showed up in a Weekly Standard article.  I know that it’s a piece of buzz that has been floating around Delhi since August or September, at a bare minimum. 

It was in Washington, actually, in August, when I was down here for a conference somebody was talking about the Kitty Hawk.  This is a very old ship.  I think that at a bare minimum you can see many Indian Naval figures comment on the fact that this is a very old ship.  If they want a ship in this class, there are two sitting in Newport right now that have been stripped down, the Saratoga, they keep trying to make into a museum and send across the bay to Quonset, Rhode Island, and the Forrestal is just sort of sitting there, it’s like a giant paperweight, except it’s floating. 

I suppose if the Indian government requested these things we would have to consider that seriously and take it under advisement.  Right now I suspect, again, given the size of the Indian Navy and the manpower that a Kitty Hawk class carrier would require, even without the air wing, the strain on the Indian Navy would be excessive, and it would be too expensive to operate.  However, any decision about the Kitty Hawk at that level would be a political decision rather than a military decision, and that’s above my pay grade.

Christopher Griffin:  The gentleman on the wall. 

Male Audience Member:  Last year, Dr. Kumar gave a pretty inspiring speech at Boston University where he laid out some ideas about cooperation in space.  I’m wondering what you think about are the prospects for U.S.-Indian cooperation in the space arena? 

Ashley Tellis:  We’ve actually done quite well in terms of cooperation in space.  In fact, one of the early breakthroughs as part of the next steps in strategic partnership was space cooperation.  And, historically speaking, of course, NASA and ISLO had a cooperative relationship that goes back to the ‘60s.  So  there is a history of very strong U.S.-India space cooperation.  This cooperation kind of hit rocky shores in the ‘70s, and, more particularly the ‘80s, because of the fear that assisting Indian space would inevitably bleed into their strategic program. 

But now that we have in principle made the decision that we can live with India strategic program, I think there is a compelling case to be made for de-visiting some of the old constraints that held us back with respect to space cooperation.  We’ve already begun resuscitating some avenues of first, pure scientific research.  And so the effort to put in payloads, for example, on the Indian program is a good example. 

To my mind, this is really the tip of the iceberg because we are slowly moving to a regime where India is going to be extremely competitive, in fact, ferociously competitive with respect to small payloads lofted into orbit.  At some point they’re going to be competitive at our own space launch capabilities, at least in these areas.  And, so, there may be opportunities here for some cross-fertilization. 

Even beyond that, I think we can work in the area of space services, in the area of support capabilities, working, for example, precision navigation, there are a whole range of things that can be done in the commercial sector; I’m not even talking government to government.  I see this as essentially a door that is increasingly going to open, particularly once we put the civil nuclear agreement behind us and also modify some of our positions with respect to the dual use technologies, which are critical in the space arena. 

Christopher Griffin:  Good, and, sir, unless you have a yes or no question, I think you’re going to be the last question of the day. 

Male Audience Member:  Last year, Undersecretary Burns penned an Op Ed piece in which he called for two areas of greater progress, defense trade and counterterrorism cooperation.  It seems counterterrorism cooperation has been maybe thinner than it could be, given a clear confluence of interests.  So, my question, is is it thinner than it should be?  Is the U.S. relationship with Pakistan relevant here?  What might be some good areas for more progress in that area? 

Lisa Curtis:  Well, I think it certainly is thinner than it could be, although, there’s probably a lot that’s out of the public eye, that we’re not seeing.  We have to assume that, to a certain degree.  There probably remains the problem of the U.S. relationship with Pakistan, and the Pakistan’s historical relationship with militant groups that fought in Kashmir.  It probably still halts India’s willingness to engage as substantively as perhaps we could both benefit from.  

I’ve argued for looking at broader counterterrorism cooperation in Asia involving India more in a forum that involves other countries as well, and more as a symbolic effort, to look at the ideological aspects of countering terrorism.  I think India could play a tremendous role in that.  There are many things the U.S. could learn from India in terms of dealing with a large Muslim minority, which has largely been satisfied within India, and with its democratic rights. 

There is a lot of room for engagement, not only on the classifying and sharing of intel, but also looking at ideological aspects, and how to deal with that, and looking at developing a pluralistic view of Islam, which India obviously has been successful with its Muslim minority community.  There are opportunities, but I think the U.S. relationship with Pakistan will probably, for some time to come, limit the extent to which we can have direct bilateral counterterrorism cooperation. 

Ashley Tellis:  I just want to say a couple of things on that.  I agree with Lisa completely, but there’s a structural problem that confronts the U.S. and India with respect to counterterrorism, and that is the U.S. is threatened essentially by international terrorism, and Pakistan becomes a critical element of the solution for dealing with international terrorism, whereas India is confronted primarily by Pakistani terrorism, or at least terrorism that has linkages with Pakistan.  It is the inability to manage this contradiction that essentially limits the pace of a counterterrorism cooperation. 

We’ve also had a longstanding policy of not discussing friends with friends, but I think we are now at least beginning to rethink how this policy ought to be implemented because it’s becoming a pattern that what is happening in Pakistan today is no longer simply a threat to India, but a threat to a larger international community.  That opens the door a little to realize some of that potential. 

Christopher Griffin:  Point on that, in terms of the Afghan question, that it seems like, where you point out the two diversions as between international terror, Pakistani terror, that the convergent point may be Afghanistan.  Have you seen cooperation there that would lead you to be more optimistic, or anticipate cooperation there? 

Ashley Tellis:  Cooperation in the sense that we have encouraged India to cooperate with the rebuilding of Afghanistan, but we have sought to stay away from any direct counterterrorism cooperation involving Afghanistan because Pakistani sensitivities are extremely crucial in this area, more than most others.  I think the judgment of the Administration has been, and, by and large, it’s a correct judgment in my view, is that, give India an opportunity to work with has a competitive advantage, and that is with respect to renewal and reconstruction in matters that don’t directly impinge on Pakistani security.  I think for some time to come that is probably the best solution, it just avoids the knottiest elements we have no control over. 

Timothy Hoyt:  Just a note on both of those issues.  The first is India has donated hundreds of millions in humanitarian assistance to Afghanistan.  They are involved in that effort in a meaningful way, if you believe that part of counterterrorism has to do with humanitarian assistance and hearts and minds and rebuilding societies and economies.  They are engaged in that respect. 

The problem with talking about counterterrorism, I would say two more elements, the first is we tend to focus on military to military, which means either we aren’t talking about it, or we can’t talk about intelligence cooperation, which is much harder to measure.  The second is, in addition to the panoply of, or this disjunction in the terrorist threat that Ashley pointed out, actually India’s most serious terrorist threat right now has nothing to do with international Islam. 

It has to do with this Naxalite Movement, it’s class based, it’s got an economic base, it’s something very different, and the Indians may not want our help on that right now because it’s internal to them, or it’s internal to them with some slop over into Nepal or Bhutan or Burma or something else.  So that’s just another dimension because we are perceiving the terrorist threat in different ways.  It makes public attention to certain elements of terrorist threats harder to do. 

Christopher Griffin:  Okay, thank you all very much for your time, thank you for coming, and hope this was a useful presentation. 

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