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A robust relationship with the US is central for India. But at what cost?

 

Narendra Modi has wisely gone to the strategic Maldives on his first overseas trip after re-election. It speaks for itself that the leader of the world’s largest democracy has begun his new term by visiting the world’s smallest Muslim nation — in population and area. Generous Indian financial assistance, including $1.4 billion in aid, has helped president Ibrahim Solih escape a Chinese debt trap and enabled his Maldivian Democratic Party to sweep the April parliamentary elections.

Modi also shrewdly kept out troublesome Pakistan from his inauguration by inviting leaders from the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) grouping. While the moribund South Asian Association for Regional Cooperation (Saarc) boxes India in a narrow, artificial framework limited to the Indian subcontinent, the east-oriented Bimstec seeks to realign India along its historical axis. India’s main trading and cultural partners in history were the countries to its east. From the west, India experienced mainly invaders or plunderers.

Indeed, Pakistan greeted Modi’s re-election in North Korean style — by firing the nuclear-capable, Chinese-designed Shaheen-II ballistic missile. Its intelligence then harassed and turned away guests invited to the Indian High Commission’s iftar reception in Islamabad. All this is a reminder that Pakistan must be kept in the diplomatic doghouse.

Modi has had little time to savour his landslide win. His second term, paradoxically, has started with troubles caused by India’s close friend — a superpower that regards India as the fulcrum of its Asia strategy. Despite an unmistakably US-friendly Indian foreign policy, US president Donald Trump’s administration has mounted pressure on India on multiple flanks — trade, oil and defence. Through its actions, Washington is presenting the US as anything but a reliable partner and unwittingly encouraging India to hedge its bets.

India is the new target in Trump’s trade wars. It was not a coincidence that on the first day of Modi’s second term, Trump announced the termination of India’s preferential access to the US market. Expelling India from the US Generalized System of Preferences (GSP) was intended to drive home the message that the choice before Modi is to yield to US demands or face increasing costs. America’s array of demands ranges from lifting price controls on heart stents, knee implants and other medical devices to relaxing e-commerce rules, even though Amazon and Walmart have been allowed to establish a virtual duopoly on India’s e-commerce. Would the US permit two foreign companies to control their e-commerce?