[One truism about the
tortured relationship between India and Pakistan is
that there is never a perfect moment. For six decades, through three wars and
one nuclear standoff, diplomats have tried, and failed, to improve relations.
Now, the private sector is giving it a shot. Trade has become the most
promising opening in the latest round of diplomacy, as progress remains largely
stalled on tough issues like terrorism, water rights and the status of Kashmir.]
By Jim Yardley
 |
Sam Phelps for The New
York Times
A booth for Motherson
International, an Indian company that
produces clothes and
costume jewelry, at the Indian trade show in Lahore,
Pakistan, in February.
|
LAHORE, Pakistan — On the day the Indian trade delegation came across the border,
Pakistan was having another political crisis. The prime minister was embroiled
in a showdown with the country’s Supreme Court. Early elections were rumored.
And Islamists had just staged a rally in Karachi to protest “foreign
intervention” on Pakistani soil.
Not, perhaps, the
perfect moment to hammer out closer trade ties.
Yet Rajiv Kumar, a
leader of the Indian delegation, was pleased. It was mid-February, and his
business group was staging the first Indian trade show ever held in Pakistan.
Tens of thousands of visitors would attend during three days. And Indian and
Pakistani business leaders, as well as both countries’ commerce ministers,
swapped cards, sipped tea and feasted at lavish banquets.
“Look at this!” Mr.
Kumar exclaimed as his car rolled up to the convention center here in Lahore,
where crowds were thronging for the trade show. “My God! Quite good, I’d say.”
One truism about the
tortured relationship between India and Pakistan is
that there is never a perfect moment. For six decades, through three wars and
one nuclear standoff, diplomats have tried, and failed, to improve relations.
Now, the private sector is giving it a shot. Trade has become the most
promising opening in the latest round of diplomacy, as progress remains largely
stalled on tough issues like terrorism, water rights and the status of Kashmir.
The foray into Pakistan
is further proof of the increasingly important role of India’s private sector
in foreign policy. India’s leaders, eager for a bigger footprint in global
affairs, now aspire to a permanent seat on an expanded United Nations Security
Council. But the Indian Foreign Service, though consisting of top-notch
officers, is too understaffed to provide a comprehensive global presence.
To compensate, the
government often relies on the private sector to serve as an intermediary
abroad. India’s two leading business groups — C.I.I. (the Confederation of Indian Industry)
and Ficci (the Federation of
Indian Chambers of Commerce and Industry) — now have offices around
the world and sponsor informal diplomatic dialogues between India and countries
like Japan, China, Singapore and the United States.
As India’s growing
economy demands more natural resources, its business leaders have led the
country on an aggressive push into Africa and South America. Last year, Prime
Minister Manmohan Singh toured Africa, pledging aid and good will in a
high-level trip encouraged by an Indian private sector competing with China for
resources on the African continent.
“These are places that
are incredibly important to India, but the Indian state doesn’t have the
resources to maintain a major presence,” said Ashley J. Tellis, a former American diplomat
who served in India. “Business has really become the de facto substitute for
Indian diplomatic engagement. And that works out nicely for India.”
India, a nation of 1.2
billion people, has about 800 diplomats serving in 162 missions and posts
around the world. The United States, by comparison, has a diplomatic corps of
more than 11,000. Even tiny Singapore surpasses India, with 847 foreign service
officers.
In a background
interview last year, a senior Indian official agreed that the country’s
diplomatic corps was far too small to adequately represent India’s global
interests. An expansion and hiring program is under way, but the process
remains tediously slow; as a result, India’s Ministry of External Affairs is
often forced to borrow bureaucrats from other ministries. Or, the senior
official said, the ministry sometimes leans on the private sector.
“The presence of Indian
corporations, both public and private, does help to expand our presence,” the
official said. “Our footprint will also expand through the private sector.”
Cautious Optimism
Mr. Kumar last visited
Lahore in November 2008, at a moment of cautious optimism. Trained as an
economist, Mr. Kumar, who was then leading an Indian research group, met with
members of a Pakistani research group to discuss their nations’ relationship
amid speculation that Mr. Singh, the Indian prime minister, would soon make a
historic visit to Pakistan.
Less than two weeks
later, militants trained in Pakistan assaulted Mumbai in an audacious and
vicious terrorist attack, killing at least 163 people and
enraging the Indian public. Any chance of a diplomatic breakthrough was
shattered as diplomats worked to avert a military confrontation.
By 2010, Mr. Kumar had
joined Ficci, the Indian business group, with an agenda of expanding the
group’s influence in India’s neighborhood and creating a fluid and
interconnected South Asian market. He began traveling to Bangladesh, Sri Lanka
and Nepal, where the prime minister and other top leaders received him.
“More and more,
economics and commerce are seen as the primary drivers of international
relations, which they were not in South Asia until very recently,” said Mr.
Kumar, who is now Ficci’s secretary general.
To a large degree, Mr.
Kumar has been playing catch-up. For more than a decade, the other major Indian
business group, C.I.I., has operated as one of the most influential
interlocutors of Indian foreign policy, helping to facilitate closer Indian
ties with Japan, Singapore and, most important, the United States.
In 2001, C.I.I. partnered
with the United States-based Aspen Institute to sponsor a meeting between Indian and
American “thought” leaders in the Indian city of Udaipur. The United States and
India, after decades of frosty relations, had suddenly warmed up to each other,
especially after a visit to India by Bill Clinton. But neither side knew how to
move forward.
The Udaipur meeting
brought together Henry A. Kissinger, the former national security adviser Brent
Scowcroft, the Harvard scholar Joseph S. Nye Jr. and others on the American
side to meet with an Indian delegation that included the industrialist Ratan N. Tata and the influential diplomat Naresh Chandra.
“We started talking
about defense, about energy,” recalled Tarun Das, the former head of the C.I.I.
“We started talking about H.I.V./AIDS. The dialogue went into: ‘What else can
we do? How can we build trust between the two countries?’ There was only
mistrust after 50 years.”
Since then, the C.I.I.
has sponsored 14 more exchanges in a United States-India relationship that, if
still fractious at times, is fundamentally changed. The two countries are now
strategic partners, with growing cooperation on defense issues where one had
not existed before. Today, India buys American military hardware and
participates in joint exercises with the United States.
The most dramatic
concept borne of that initial meeting between the two countries involved
cooperation on nuclear energy, in what eventually became the landmark United
States-India Civil Nuclear Agreement. The deal was criticized in both
countries, but it was eventually approved, if still not fully carried out.
In 2008, when the United
States Congress threatened to vote down the measure, India’s government got
lobbying support from its most potent ally: the Indian private sector, which
included Indian-Americans who had prospered in business, science and technology
in the United States and had developed one of the most influential lobbies in
Washington.
Ashok Malik, a
journalist who was one of the writers of an academic analysis of India’s private
sector diplomacy, said the influence of Indian business is evident beyond the
changed relationship with the United States. In 2005, President Hugo Chávez of
Venezuela was greeted with a big reception in New Delhi at a time when Indian
leftists were part of the coalition government. Two years later, with the
leftists no longer in the coalition, India’s president skipped Venezuela on a
tour of South America, instead stopping in Chile and Argentina, where Indian
corporations had business interests.
Mr. Malik said Indian
diplomats were now trained to consider business development as a primary part
of their job. “Before, commerce was beneath public policy,” he said. “Now they
are talking individual deals.”
Business has also become
a primary conduit for increasing India’s footprint in East Asia, China’s
backyard. Singapore, Japan, Taiwan and Australia have each increased business
ties, partly as a strategy to draw closer diplomatically to India and possibly
nurture a counterbalance to China. At the same time, the C.I.I. is quietly
sponsoring yet another dialogue, this time with China itself.
“We are slowly trying to
see if there can be some building of trust with China,” Mr. Das said in an
interview last year. “It is much more difficult than with the Americans.”
At the convention center
in Lahore in February, Pakistani soldiers were posted everywhere, assault
rifles in full view as they awaited the arrival of Indian delegation. Mr. Kumar
had come two days early, to open the trade booths, but now the Indian commerce
minister, Anand Sharma, was arriving with his Pakistani counterpart, as well as
the Indian trade delegation. Security was a concern.
A careful reconciliation
between India and Pakistan has been under way since July 2011, eight months
after the Mumbai attacks, with efforts being made on both sides of the border.
Mr. Sharma’s visit was a significant gesture: he was the first Indian commerce
minister ever to make an official visit to Pakistan, though few people expected
any breakthroughs.
“I see it as a symbolic
act, a vaccination against the right-wing groups who will oppose India,” Mr.
Kumar said of the trade show and Mr. Sharma’s visit. “If this is successful,
the next one can be bigger.”
Pakistan is easily
India’s toughest foreign policy challenge, with hard-liners on both sides
showing little desire to compromise, yet Mr. Kumar believes progress is
possible because the middle class in both countries wants to ease hostilities
and focus on economic growth.
Mr. Malik noted that the
rise of India’s middle class, as well as the growing domestic influence of the
private sector, has created a quiet constituency for easing hostilities with
Pakistan. “The growth phenomenon has made the Indian middle class less tolerant
of adventurism, lawlessness and war,” he said. “It is still worried about
terrorism. But it doesn’t want to fight wars. It has other things to do.”
A Cold War Legacy
India’s political
establishment is still grappling with redefining the country’s foreign policy,
and its cold war legacy of nonalignment still holds a lingering and potent
appeal. As the private sector (and Mr. Singh) have pushed India toward closer
ties with historical rivals like the United States, and now Pakistan, a strong
reaction has occurred in some quarters. Many leftists say the government is
pushing India too close to the United States and kowtowing to corporate
interests. Right-wing Hindu groups are suspicious of any interaction with
Pakistan.
And others note that the
corporate sector is protective of its own vested interests. Mr. Tellis, the
former American diplomat, said India’s uncertain response to the Arab Spring
was partly because the nation’s private sector — which has major business
dealings in the Persian Gulf — was hesitant to embrace political change.
“They are simply afraid
that if they end up supporting revolutionary movements, many of their economic
interests that have been put in place, private sector interests, would be at
risk,” Mr. Tellis said. “These interests feel very uncomfortable with change in
the status quo in the gulf.”
In Pakistan, the slow
progress being made on trade could be derailed by a new terrorist attack, a
risk Mr. Kumar regards as unavoidable. Meanwhile, movement on issues like
Kashmir and terrorism is almost nonexistent. Still, two weeks after the Indian
trade trip, Pakistan announced a change in rules that could greatly expand the
number of products imported from India — a business and diplomatic victory.
Nikhila Gill contributed research from New
Delhi.