The US may just have served notice to India: we may not aid your rise, and we may actually try and undermine it

The US deputy secretary of state Christopher Landau made what many would have called a particularly revealing, and yet insensitive, comment on how the US sees partnership with India.

After waxing eloquent on how this century is going to see the rise of India, and how it is both in America’s and India’s interest to partner for a win-win result, he blew it at the Raisina Dialogue on 5 March by saying: “But again, India should understand that we are not going to make the same mistakes with India that we made with China 20 years ago in terms of saying, we are going to let you develop all these markets, and then, the next thing we know, you are beating us in a lot of commercial things. We are going to make sure that whatever we do is fair to our people. Because ultimately, we have to be accountable to our own people, just as the Government of India has to be accountable to its people.”

The question is: what exactly did Landau mean when he said that the US is “not going to make the same mistakes with India that we made with China 20 years ago in terms of saying, we are going to let you develop all these markets, and then, the next thing we know, you are beating us in a lot of commercial things.”

Or did he mean that the US would not just not help India rise and compete with the US in some areas, but actively try to undermine it globally where possible?

For some time now, India has silently acknowledged that the US is a frenemy, helpful in some ways, but also a roadblock in others. When it comes to India’s rise, both China and the US have an unspoken interest in slowing down India’s rise.

History is worth recalling. After the 1971 trip of Henry Kissinger to China, the US decided to cultivate that country as a counter-weight to the Soviet Union. In due course, as the Mao era faded away, China took advantage of US indulgence to reform itself under Deng Xiaoping. China enabled its own rise by reforming itself internally, transforming itself from a moribund state-led economic disaster to a more market-oriented. This allowed many western companies to shift supply chains to China and build the latter’s global competitive strength even while they managed to cut their own manufacturing costs. During these years, the US silently got China a sweetheart deal to enter the World Trade Organisation and gave it Taiwan’s seat in the UN Security Council. China used these advantages to push internal reforms and grow faster than most Asian tigers for a few decades till recently.

While it would be true to say that the US indirectly aided China’s rise, it would be equally true to say that the US aided Europe’s rise after the Second World War, and also the rise of South Korea, Hongkong (before its return to China), Thailand, Indonesia, Malaysia, Singapore, Taiwan, the Philippines, et al. But the US did not do this only out of the goodness of its heart. This policy suited its geopolitical objectives, and also helped US consumers get the best products at the lowest possible prices. Also, this policy gave the US the huge privilege of making the dollar the global standard, enabling the US to borrow endlessly to finance its own growth. It continued even after the US broke its link with gold under Richard Nixon. Put simply the US got itself the right to print money without fiscal and inflationary consequences.

You could say the same with the US’s “support” for India’s world-beating software services and pharmaceutical industries. Both have benefited India (with high quality jobs), while helping American companies become more competitive by improving their technological capabilities. The setting up of global capability centres in India also helps US companies to not just improve their tech heft, but retain the knowledge generated in the process with themselves. The US’s high-cost Medicare bills are moderated by the use of Indian generics.

So, when Landau says that the US won’t help India build all these markets and then beat them in the same game, he is actually talking bunkum. In fact, there is also the other side of the argument. We in India can see how this over-dependence on the US markets for labour-arbitrage-based software services exports has made us lose sight of our own product and platform development needs. The US has, in fact, made us a partial tech vassal state.

The real import of Landau’s statement could lie in what he may have implied. When he said that India is not going to get the same help that the US allegedly gave China on its rise, maybe he means to say that the US will actually try to derail our rise in some way. The kind of destabilisation we are witnessing in our neighbourhood, and efforts of the Trump Administration to impose tariffs on  India, allegedly for buying Russian oil, could fall in this category.

India needs to worry that the US will actively try to thwart our rise in as many areas as possible, including by fomenting internal dissent and polarisation, even while seeming to help us in some areas that are beneficial to the US.

Caveat India. The days of innocence on US intentions must be put behind.