India in Trump’s Asia

By Sarah Watson —

Leaders at the ASEAN Summit, including President Donald Trump and Prime Minister Narendra Modi, link arms. Source: White House’s flickr photostream, U.S. Government Work.

On the surface, President Trump’s first visit to Asia was not about India. Delhi was not on the agenda, and India is not a full member of the regional groupings (ASEAN and APEC) whose summits were at the heart of the trip. But the trip had important ramifications, both positive and negative, for India’s economic development and its role within the Asian strategic architecture. The outcomes from the trip underline the mixed promise of Trump’s vision of Asia for India: huge potential accompanied by substantial risks.

India formed the subtext for some important announcements in Trump’s first stop, Japan. The White House summary of the trip not only used the phrase “Indo-Pacific” but also included language on “responsible financing arrangements” and “good governance” for infrastructure projects — an implicit rebuke of China’s Belt and Road initiative. The language not only echoed a similar passage in the Modi-Trump joint statement issued in June, it aligns closely with India’s explicitly negative position on Belt and Road. (India was the only major Pacific economy missing from China’s Belt and Road Forum in May.) Trump and Prime Minister Shinzo Abe of Japan seem willing to back their position with actual cash: during the same leg of the trip the U.S. Trade and Development Agency signed an agreement with its Japanese counterpart to use co-financing “to advance quality energy infrastructure in third-country emerging markets in the Indo-Pacific.” India is likely to be high on the list of qualified beneficiaries.

After visiting Japan and Korea, President Trump landed in Vietnam for the Asia Pacific Economic Cooperation forum (APEC) summit. India is not a member of APEC, but Trump’s speech made special mention of India’s economic development — the only non-APEC country to receive such a call-out. Trump used the phrase “Indo-Pacific” ten times in the speech, hinting at a vision of India as the western anchor of a “free and open” Asia. Perhaps most importantly, however, India as a non-APEC member emerged relatively unscathed from the harsh dressing-down Trump administered to nations that had “taken advantage” of the United States. India, which lacks a free trade agreement with the United States, in the short term has relatively little to lose from the Trump administration’s reevaluation of trade deals. In fact, Trump’s rejection of the Trans-Pacific Partnership (TPP) rescued India from the harsh consequences of a deal that would have allowed competitors like Vietnam to pay far lower tariffs when exporting to the United States

While the economic consequences of the trip were minimal for India, the strategic impact could be significant. Representatives of India, the United States, Japan, and Australia met on the sidelines of the ASEAN summit to resuscitate the long-dormant strategic grouping known as the ‘Quad.’ First mooted in 2004, this dialogue of Indo-Pacific democracies has the potential to grow into a planning mechanism for coordinated actions if China’s aggressive military behavior persists. As recently as May India had rejected an Australian request to participate in trilateral military exercises with the United States and Japan. In the intervening months, China’s encroachment onto Bhutanese territory at Doklam, its continued intransigence over India’s entry into the Nuclear Suppliers Group, and its repeated moves to block a United Nations vote on designating Masood Azhar a terrorist seem to have altered India’s strategic calculus. The Quad could easily fail to thrive once again, but the participating countries’ interest in sitting down to talk is a sign of their shared concern about China’s activities. President Trump and Prime Minister Modi capped off the summit with a brief bilateral meeting in which they resolved that “two of the world’s great democracies should also have the world’s greatest militaries” — not a statement that aligns with past messaging from the Obama administration.

India therefore has ample reason to celebrate Trump’s visit. But Indian policymakers are also likely to be weighing the risks of Trump’s strategy. Trump’s ‘America First’ address at APEC was immediately followed by a speech by Chinese president Xi Jinping, which provided a striking counterpoint in its embrace of “openness” and globalization. For India, such slogans ring hollow, but Southeast Asian nations may begin to see China as a more compelling leader on economic issues than the United States — just as India and the United States are increasingly aligned. And the decision by 11 nations to move forward with a modified version of TPP could reduce their willingness to compromise at long-drawn out talks on the Regional Comprehensive Economic Partnership (RCEP). India, a negotiating party for RCEP, is widely seen as the major stumbling block to the success of that deal and had hoped that the failure of TPP would encourage its counterparts to make concessions.

Trump’s Asia visit may mark an inflection point in U.S. strategy towards Southeast Asia. Trump’s policies present India with the opportunity to step forward as a leader in the region, both strategically and economically. Yet its growing partnership with the United States may in fact make this task more difficult.

Ms. Sarah Watson is an associate fellow with the Wadhwani Chair in U.S.-India Policy Studies at CSIS. Follow her on twitter @SWatson_CSIS.

Sarah Watson

Sarah Watson

Sarah Watson is an associate fellow with the Wadhwani Chair in U.S.-India Policy Studies at CSIS.

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