At the Quad meeting in Tokyo last year, President Biden thanked Prime Minister Modi for his ‘continuing commitment to making sure democracies deliver, because that’s what this is about: democracies versus autocracies.’ This isn’t the first time Biden has publicly lauded Modi for championing democracy, freedom, and equality in India.
This admiration from Biden—a recipient of the prestigious Athenagoras Human Rights Award—seems to endorse Modi’s human rights record, a stance which conflicts with allegations put forth by nongovernmental organisations, such as Human Rights Watch (HRW). For instance, HRW Chief of Staff Philippe Bolopion points to state-sponsored, systematic targeting of religious minorities since Modi took power in 2014 through a grip that his party, the Bharatiya Janata Party (BJP), wants to tighten over civil society.
So why does Biden choose to disregard Modi’s human rights records? The answer lies in a shorter-term strategy aimed at furthering American economic and political interests.
To strengthen its position in Asia, the US is in search of an influential ally, in addition to Japan, that wields both hard and soft power. The contenders are China, Russia, and India. Given that the US-China trade war has continued under the Biden administration and Russia has violated Ukraine’s territorial integrity, the US now turns to India.
However, this isn’t merely a process of elimination; the US’s preference for India also stems from a broad range of considerations, including economic incentives and domestic election concerns.
A neo-gold rush
Despite the economic allure of China, it is a surging India, projected to be the world’s second-largest economy by 2075, that presents a more promising opportunity for American businesses. With its robust GDP growth of 8% between 2021 and 2022, and a burgeoning consumer class of 473 million that expands by 31 million annually, India’s potential is evident.
The attraction lies not only in India’s GDP per capita, but its growing youthful population. Indians between the ages 15-24 are currently the world’s largest youth population at 254 million, compared to China’s 175 million. Projections show that, by 2035, 30% of China’s populace will be aged 60 or older, a demographic who are effective liabilities due to pensions and strains on public healthcare. India’s equivalent demographic will constitute just 15.4%.
Furthermore, conservative estimates suggest that, by 2050, India will have a larger working-age demographic, typically the largest spenders, than China. This promises a rise in sales volume that can augment long-term revenue for US enterprises.
India’s freer economic environment also allows American businesses to invest in their production process and attain economies of scale easier than in China. The latter, having a more controlled economy, often curbs the dominance of businesses that might challenge the government. This was seen in the case of Alibaba, whose founder, Jack Ma has faced severe criticism and an antitrust investigation.
Compounding the issue, China is also facing a widening rich-poor divide. Despite the country having more billionaires than the US and India combined, over 600 million people earn less than $5 a day. Since 1949, the primary objective of the Chinese government has been to maintain control over its populace, ensuring no possibility of rebellion. When public discontent grows due to economic disparity, the government clamps down on big businesses to placate the majority.
Additionally, China imposes severe restrictions on foreign business ownership. If American businesses were to establish operations in China, they would be prohibited from owning 100% of businesses in numerous sectors, including software, telecommunications, transport, storage, agriculture, medicine, mining, electricity, scientific research, and many others. In contrast, India places restrictions on foreign business ownership in just five of these areas. This increased government intervention has led to apprehension among American businesses, with many reconsidering their commitment to the Chinese market due to increased government intervention and fears of retrogression to the days of the 1950s.
As a result, they are shifting their focus towards India, illustrated by Apple’s decision to begin iPhone 14 production in India by moving some production from China and Facebook’s decision to purchase a 10% stake in Ambani-led Jio.
Biden continues to uphold diplomatic relations with Modi due to clear economic interests. India stands out as a more dependable Asian manufacturing hub than China given its projected larger future workforce and promising market for American businesses. As a result, Biden has been championing Foreign Direct Investments (FDIs) in India, with these reaching $64.68 billion in 2020 and $52.34 billion in 2022. Conversely, FDI into China fell to their lowest levels in eighteen years in the latter half of last year.
A political dance
Beyond economic opportunities, the US is home to four million Indian Americans, its second-largest immigrant group. Biden acknowledges their crucial importance to the Democratic party, evidenced by the 74% of Indian American voters who backed him in the 2020 election. Predominantly Hindu, these Indian Americans largely approve of Modi’s administration, with only 19% disapproval reported in a 2020 study.
Their love for Modi was highlighted during his 2014 US visit, where he drew the second-largest crowd for a foreign leader, outdone only by Pope Francis.
It therefore becomes strategically important for Biden to maintain amicable relations with the community to maintain power. However, 24% of Indian Americans still believe the US support for India is insufficient, making Biden feel the need to go one step further with Modi.
The significance of their support extends beyond voting, translating into substantial financial contributions crucial for election campaigns. Indian Americans, twice as affluent and twice as likely to hold at least a bachelor’s degree as the general US population, donated a total of $16 million to Democratic candidates in the 2020 election. In addition, an impressive $10 million was raised by the Indian-American PAC, IMPACT, led by Pennsylvania-based Neil Makhija, marking the highest amount ever raised by an Indian-American PAC in US history.
For the 2024 election, contributions from Indian Americans are anticipated to be even higher as a result of a growing population and soaring average income. Given that the Indian-American population grew by 15.7% between 2015 and 2019, and with the median household income reaching $123,700 in 2022, the demographic is larger, wealthier, and will be even more influential come 2024.
Aware of the strong pro-Modi sentiment in this community, Biden strategically showcases his support for Modi and sustains this strong alliance to keep his donations pipeline flowing. A recent example of this is his meeting with Indian-American entrepreneur Ajay Jain Bhutoria to develop a fundraising strategy for 2024.
It’s worth noting that the entrepreneurial tendencies among Indian Americans, coupled with their high income, could make them potential supporters of the GOP. As Milan Vaishnav, director of the South Asia Program at Carnegie, puts it, ‘They [Indian-Americans] are well-off, and they’re business-oriented. They care about low taxes, low regulation, and entrepreneurship, and they’re socially conservative. So I don’t think it’s a group that the Democratic Party is going to take for granted.’
Factors such as Indian Americans’ immigrant status and the Democrats’ liberal immigration policies seem to significantly influence their political leanings. Additionally, as they are an ethnic minority they logically tend to oppose racist attitudes. According to a study by the Public Religion Research Institute, the median value on the structural racism index for all Americans stands at 0.45. For Republicans, this median score is significantly higher at 0.67, compared to just 0.27 for Democrats.
Consequently, Indian Americans often perceive Republicans as more tolerant of racist views than Democrats, leading to their predominant preference for voting blue. This voter pattern is crucial for Biden to uphold. Therefore, maintaining strong US-India relations emerges as a vital strategy for Biden to increase his chances of re-election.
The growth of Hindutva in the US, a political ideology justifying the cultural foundations of Hindu nationalism, is a trend Biden recognises and is leveraging for support by aligning with Modi. The Indian prime minister is a well-known member and advocate of the RSS, a right-wing Hindu nationalist paramilitary volunteer organisation, whose leaders are inspired by Hitler and Nazism. Its overseas counterpart, the Hindu Swayamsevak Sangh, boasted 251 centres, or Shakhas, in the US by 2021 and continues to see significant growth. As of 2020, Indian Americans held a more favourable view of the RSS than they did of the Congress Party, Rahul Gandhi, the Republican Party, and Trump. This positive sentiment was only slightly surpassed by support for the BJP, Modi’s governing Hindu nationalist party.
A play on Asia’s chessboard
India’s strategic role in counterbalancing China justifies Biden’s choice to have Modi address Congress in June this year. The need for an ally with strategic maritime routes—and, for India, advanced technology, education, and investment—outweighs the ideological differences between the two countries.
The alliance is less about ‘shared democratic values and respect for universal human rights,’ as the White House stated on India and America’s joint technology initiatives this year, but more a pragmatic, transactional relationship aimed at surpassing China in soft and hard power. The US sees China as a potent threat to the regional and global order, especially with the emergence of the BRICS (Brazil, Russia, India, China, and South Africa) nations who are intent on de-dollarising and creating their own currency. Amid this backdrop, the US finds an ally in India, whose views align in part with their own. The 2020 border clashes between India and China, which resulted in US aid to India, further cemented this alliance.
The US seeks to transition India’s reliance on Russian military gear to US systems, capitalising on Russia’s lagging deliveries, such as the two out of five S-400 Triumf air defence system units, purchased in 2018 for $5.4 billion, that have not been delivered as of March 2023. Beyond the military, the alliance is bolstered by initiatives such as the Initiative on Critical and Emerging Technology (iCET) in January 2023, which encourages US-Indian collaboration in developing alternatives to Chinese-built information and telecommunications infrastructure.
This cooperation allows Washington to diversify essential industrial inputs away from Beijing and toward India, providing New Delhi with substantial economic investment. Biden’s strategic plan seeks to consolidate a robust ally in Asia through military and technology trade, thereby deepening India’s reliance on the US, which is already its largest trading partner, and strengthening their shared front against their mutual adversary, China.
Whether this evidently transactional relationship will prove beneficial for Biden remains to be seen. Biden’s gamble is substantial. Unlike alliances with transparent democracies where governance processes are clear and there are checks and balances on leadership, India’s wavering commitment to democratic principles poses a risk to the US in sharing intelligence with Delhi, as the US does with its Five Eyes partners: Australia, Canada, New Zealand, and the UK.
India is still part of the Shanghai Cooperation Organisation and continues to abstain from voting on resolutions that condemn Russia’s invasion of Ukraine. Furthermore, India’s ethnonationalist leader Modi, who expresses fear of India being relegated indefinitely to the geopolitical sidelines, raises questions about the country’s reliability as a strong and sustainable ally.
The Quad (India, the US, Japan, and Australia) must remain solely focused on countering the Chinese threat. If it doesn’t, it risks getting too close to an undemocratic leader who is hesitant to align closely with either the Western Bloc or Russia and China, and who is primarily focused on advancing his own economic and nationalist interests.
Biden wants to avoid a rerun of the Kennedy-Nehru situation where, despite Kennedy’s efforts in flying Nehru to the US with the intention of securing an alliance during the Cold War, Nehru chose to remain non-aligned. Only time will tell whether Modi chooses to tread the same path, or for the first time in 75 years, decides to pick a side.