A growing chorus in Washington seems convinced that those of us who served in the George W. Bush administration oversold the benefits of the U.S.-India strategic partnership forged from 2005 to 2008. The centerpiece of that partnership was the bilateral defense agreement of 2005 and a civilian-nuclear agreement ratified by both countries' parliaments and blessed by the international community in 2008. Many critics are drawn from the non-proliferation community that largely opposed the civ-nuke deal because of India's original sin of developing nuclear weapons outside the Nuclear Non-Proliferation Treaty -- to which India is not a signatory -- and even though it has a clean proliferation record. Their case has legs today less because they were right about the civ-nuke deal -- they were not -- than because the Obama administration has presided over a period of drift in Indo-U.S. relations that has been matched by drift in Delhi on India's reform agenda. The result has been a benign sense of disappointment in each country, despite the compelling structural and ideational logic that continues to push the relationship forward.

Several of us recently debated the question of whether U.S.-India relations were "oversold" at the American Enterprise Institute. Today's Financial Times charges that U.S.-India relations are "wilting" in light of various policy spats between the two countries that belie the mutual optimism of 2008. These claims need to be put in perspective. This is the first of several posts that will try to take the long view by highlighting how extraordinary the transformation of U.S.-India relations actually has been in light of their complicated history -- and why the U.S. strategic bet on India, and India's on America, remains smart policy for the long term, despite short-term disappointments.

Recall the context in which U.S. and Indian officials, nearly 15 years ago, sought to forge a new relationship. For half a century, the American and Indian governments were alienated by India's refusal to sign on as one of Washington's Cold War allies; by the U.S. military alliance with Indian rival Pakistan, forged in 1954; and later by America's tacit alliance with Indian rival China, countered by India's tacit alliance with Moscow. Following wars with both Pakistan and China, India launched a covert nuclear weapons program, leading the United States to muster its allies to impose sweeping sanctions on technology trade with India -- further stifling its development after state socialism had already undercut India's growth potential. Even after the Cold War, Washington and New Delhi spent the 1990s feuding over proliferation, culminating in the imposition of even more U.S. sanctions following India's1998 nuclear weapons test.

It was Indian, not American, leaders who then suggested that India and the United States should break from a half-century of discord to transform their relations for a new era. According to its leaders, India had tested nuclear weapons in response to existential threats from China and the ally it had helped to develop nuclear weapons, Pakistan. India was the world's largest democracy, and its people had friendly views towards the United States. Converging threat perceptions and common values meant that India and the United States were in fact "natural allies," according to then-Prime Minister Atal Bihari Vajpayee. They should forge a partnership to manage the dangers of the 21^st century and to amplify the strengths of the world's biggest open and pluralistic societies. President Clinton's unprecedented support for India over Pakistan in their near-war of 1999, followed by his 2000 trip to India in which he echoed Vajpayee's call for an alliance of interests and values, made possible the breakthroughs that came later.

India's change of administrations in 2004 did not change New Delhi's support for developing a new partnership with the United States. Nonetheless, Bush administration officials who worked with both Indian governments faced a stark challenge. Not only did the Indian and U.S. bureaucracies have no tradition of working together, but the international sanctions regime the United States had put in place following India's 1974 "peaceful" nuclear explosion remained in place. Then-State Department Counselor Philip Zelikow called this legacy the "Gordian knot" which statesmen in Washington and New Delhi somehow had to untie in order to forge an enduring foundation for a transformed partnership.

The answer was the 2005 U.S.-India civilian nuclear cooperation agreement. Under its terms, India would separate its civilian and its military nuclear reactors, submit the former to international monitoring, make a series of binding commitments not to proliferate nuclear materials or technologies, and in return secure the support of the U.S.-led international cartel governing trade in civilian nuclear components for India's access to these materials on the international market. The judgment of not just the Bush administration but of the United States Congress, the International Atomic Energy Agency, and the Nuclear Suppliers' Group was that the nuclear non-proliferation regime would be stronger if India were a part of it on these terms -- rather than remaining excluded and untethered as a nuclear weapons state not bound by the Nuclear Non-Proliferation Treaty.

For all the attention garnered by the civilian-nuclear agreement, the first long-term partnership agreement between Washington and New Delhi was actually a 10-year defense cooperation agreement signed in June 2005. Most countries without a long history of partnership begin their engagement with trade and diplomatic agreements and only after building trust move on to military cooperation. The opposite held true between the United States and India, in part because of the compelling security threats -- from China, Pakistan, and terrorism -- that drew them together. The defense agreement was a particularly radical step for India to take -- having allied with the United States' primary competitor during the Cold War and condemned America's military primacy in the international system throughout the 1990s, Indian leaders decided by the mid-2000s that the United States was the partner of choice in helping to modernize the Indian military and supply the needs of the world' biggest arms importer.

The success of U.S. and Indian policy from 1998-2008 lay in creating a transformed basis for relations between the world's largest democracies for the new century. The United States would secure not an ally but an independent partner that could help anchor an Asian balance of power otherwise at risk from growing Chinese strength. Washington would be able to point to India's model of democratic development as an alternative to the "Beijing consensus" of authoritarian development that otherwise might appeal to swathes of the developing world. The complementarities between America's hi-tech economy and India's rich human capital would spur growth in both countries. India would secure as a sponsor for its rise and development the international system's predominant power. This seemed like a good bargain from the vantage point of 2008. It remains one today, despite the fact that both India and America have disappointed each other on several key issues over the past three years. These will be the subject of my next post.

The past two months have witnessed a series of revelations regarding China's growing military power. In December 2010, Admiral Robert Willard, Commander of U.S. Pacific Command, declared that the aircraft carrier-killing DF-21D anti-ship ballistic missile had achieved initial operating capability. Last month, photographs and video of the J-20 fifth-generation stealth aircraft, a plane considerably more advanced than observers expected of China, appeared on the internet.

On Monday, Ross Babbage, the founder of Australia's respected think tank, the Kokoda Foundation, issued a monograph, Australia's Strategic Edge in 2030 that examined the changing military balance in the Western Pacific and its implications for Australia. It is a report that demands the attention of policy makers in Washington.

Babbage argued that China's aggressive military modernization is rapidly undermining the pillars that have supported American presence in the Western Pacific for more than half a century. As he puts it, "China is for the first time close to achieving a military capability to deny United States and allied forces access to much of the Western Pacific rim." He catalogues China's anti-access efforts, which include cruise and ballistic missiles that can attack ships and fixed targets; a massive investment in cyber-warfare capabilities, with reports of tens of thousands of Chinese cyber intrusions daily; new classes of both nuclear and conventionally powered submarines; a substantial increase in the Chinese nuclear stockpile; a huge investment in space warfare; and a massive increase in fighter bomber and other airborne strike capabilities.

Babbage argued that Australia will need to take drastic action in order to protect its interests in a region increasingly dominated by China. These include acquiring a fleet of 12 nuclear-powered attack submarines (the report hinted at leasing or purchasing Virginia-class SSNs from the United States), developing conventionally armed ballistic and cruise missiles, increasing Australia's investment in cyber warfare, and hosting American forces on Australian soil.

Read on

By Daniel Twining

It is a quality of human nature to extrapolate the present into the future. What else explains the pervasive gloom about America's future in the international system? Headlines around the turn of the new year were full of learned and normally astute commentators bemoaning the inexorable diminution of the West by the ever-growing economies of Asia in the wake of the global financial crisis and what many perceived to be a lost decade from 2001- 2009.  Surveys show that three in five Americans believe their country is in decline. A little more New Year's cheer is in order.

The United States today enjoys a share of global GDP no different than it did in the 1970s. The spread of democratic capitalism to large parts of the world that, during the Cold War, suffered from closed economies of scarcity is an enormous victory for American power and principles, and has made this country -- not to mention billions of people across Asia, Latin America, Central and Eastern Europe, and at least parts of Africa and the Middle East -- decisively better off.

This outcome, no less than the end of the U.S.-Soviet balance of nuclear terror, is the ultimate victory of the Cold War, and its final chapters have yet to be written -- as China's leaders, consumed by domestic insecurities even as the world lauds their unprecedented ascent to world power, seem to understand.

The United States remains the world's indispensable nation, even if President Obama has cast off the bracing language of American primacy in favor of a more subtle and understated poetry about American purpose. Washington's security commitments continue to order Asia, deter aggression in the Middle East, and make possible Europe's historic experiment in regionalism. The United States remains the international system's core convening power -- as seen most recently at Copenhagen-- and no solution to any pressing international problem is possible without American leadership. 

The same cannot be said of China, so often conflated to be America's global equal despite possessing an economy one-quarter of America's size and political, demographic, and economic challenges that dwarf those of any other great power (with the possible exception of Russia, whose future appears bleak). China's passive acquiescence may be necessary on a host of international challenges, from stemming Iranian proliferation to (not) agreeing to climate change targets. But where is Beijing forging international solutions on the hard issues of the day? More often it is free-riding on the leadership of others, or belatedly consenting to decisions after being forced to take a position by the more active leadership of the West.

Uniquely within the developed world, America possesses a population that does not face a demographic crisis over the coming few decades, thanks in part to our historical tolerance for immigration. U.S. universities continue to educate the global elite -- and if they go back to India or China to start software companies rather than staying in the United States, that is in part an indictment of our tough controls on highly skilled immigration that deter the world's best talent from staying.  At the same time, while it would be better to import than to export talent, we shouldn't diminish the value of the latter in extending American influence into these important new centers of power and seeding economic growth there that benefits us, too. 

The United States is well-placed to compete in a globalized world -- we always have been, which is why generations of American presidents have pursued free trade and freedom of the seas as enduring national objectives. Half the S&P 500's earnings come from abroad, which means every American who owns a retirement fund in stocks, even if not invested internationally, benefits from the economic "rise of the rest" (as does every American who doesn't own a retirement fund but shops at Walmart and chooses to consume cheap imports).  And it's worth pointing out that economic growth in the BRICS relies in part on the soft infrastructure of trade and finance that is dependent on the security of the global commons, still policed overwhelmingly by the U.S. military and our allies.

The United States suffered calamitously from the financial crisis of 2007-2008, which started here at home from our own Schumpeterian excesses of capitalism. But the United States also appears poised to lead the developed world out of recession and into sustained, if moderate, growth. It is true that China, in contrast to the West, had a good financial crisis.  But its extraordinary stimulus spending combined with its artificially undervalued currency is creating a different set of financial and economic risks. The country's opaque and underdeveloped banking system, not to mention its rigid and non-transparent political regime, will be hard-pressed to manage these with ease. 

More broadly, as Thomas Friedman has said, the 21st century cannot belong to a country that doesn't let its citizens use Google. Americans (and our friends abroad) should have a little more confidence in the values and purpose that have inspired us to help make the new world we live in. We have plenty of problems at home, from inadequate infrastructure to an underperforming educational system and, perhaps most disturbingly, a growing burden of national debt that, if not corrected, will increasingly undermine our welfare at home and our leadership abroad.

That said, I wouldn't trade America's problems for those of any other country. For his part, President Obama certainly doesn't want to spend four or eight years presiding over American decline. It doesn't pay to bet against the United States. We should have faith in our political leadership -- and actively involve ourselves in the political process -- to shape a coming decade and century that prove the skeptics wrong.

Happy 2010.