India votes for US alliance - and a change in destiny

Posted by: Manjeet Krpalani on July 22, 2008

What a day it’s been in India - and what a victory for Prime Minister Manmohan Singh. After two days of bitter debate, India’s Parliament voted in favor of forging ahead with the US-India civilian nuclear deal - and bought Singh and his party nine more months in office before the next election.

When Singh decided, two weeks ago, to call the bluff of the Communist parties within his coalition and go ahead with the deal in spite of their opposition, it looked like the administration in New Delhi would not last the month. Not only was it unable to pursue the kind of economic reform that would have blunted the devastating effect of current global conditions like high oil and commodity prices, it was also unable to chart a new destiny for India in the foreign policy arena. An alliance with the United States is anathema to India’s communists, but of great geopolitical significance to India and its future.

Now, with India’s Parliament supporting the deal and giving Singh the thumbs up, the long-held up economic reforms could get moving again quite swiftly. Already, Singh said he will pursue changes in the Banking Regulation Act which will strengthen the capacity of state sector banks and introduce pension fund reform, among others. These are easy reforms that will help undo some of the distortions in the system.

But the greatest significance of today’s confidence vote is the transformation of India’s dated foreign policy into a more pragmatic realm. The US-India nuclear deal is deeply symbolic and brings the two natural democracies closer together - a process begun in 2000 by former US President Clinton which received a jump start in 2005 when President George Bush proposed the nuclear deal. But implementing the deal was delayed by Singh’s communist coalition partners, who blew it up into a national event, discussing it ad nauseum in the print and electronic media. The unintended but beneficial effect has been to make ordinary Indians more familiar with foreign policy issues and nuclear energy - both issues they formerly considered too arcane and better left to government. And it showed up the communists in India to be disconnected from the mood of the country which is clearly now prepared “to take its rightful place in the comity of nations,” as a jubilant Singh said minutes after the vote was cast in his favor.

Next red-letter days: August 1, when the International Atomic Energy Agency will approve the nuclear safeguards for India; followed by approval of the National Suppliers Group in September and finally, right in the nick of time, before November 1, the deal’s final approval by the US Congress.

Singh and his party shouldn’t rest a moment, though. Their triumph could be short-lived if they lose in the the five upcoming major state elections before December. Pushing through the easy financial and judicial reform is crucial - else the party will have gained globally but lost locally.

Reader Comments

George

July 23, 2008 3:43 PM

Pure indian propoganda.

Jack

July 25, 2008 2:14 PM

Great news for India. Now the Indians can expect a long and prosperous free ride and live their American dream. May you live happily ever after.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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