Secretary of Defense Lloyd Austin visited India this month to forge stronger security and economic ties between our two great nations. The visit was highly significant, because it came amid the most dangerous power dynamics we have seen in the Indo-Pacific region for a generation.
China is no longer a growing or emerging threat, but poses a direct danger to our regional allies and partners. Beijing is also a broader threat to the stability of the global order, and to the pre-eminence of democracy and the rule of law that has struggled but endured since the end of the Cold War.
Neither the United States nor India can take on this challenge alone. Bilateral security cooperation and multilateral efforts including Quadrilateral Security Dialogue have never been so important.
India must also bolster its military capacity. Recently, it was announced that India would buy $3 billion worth of unmanned Predator drones.
Leaders in both nations realize that security cooperation is not built on military might alone. Force of arms is a necessary but insufficient condition for defending regional and global security. The alliance must first ensure that we strengthen our shared values.
The international rules-based system of treaties, legal protections, and independent judiciaries is fundamental to the success of global democracy. India, along with the United States, should be at the heart of this system. If the rule of law is undermined, the only winners are the world’s autocracies – most prominent among them China. Commitment to security means commitment to the rule of law.
It therefore should be a matter of concern to the United States that India is increasingly weaponizing its political and judicial system against American and British companies.
Two prominent examples of this involve the British companies Vodafone and Cairn Energy, which Indian tax authorities have targeted with heavy fines. In both cases, independent international tribunals ruled against the government of India and awarded compensation. To date, India refuses to pay either award.
In another ongoing case, the Indian government has actually attempted the liquidation of a company owned by American investors in order to evade complying with an international arbitration award.
The company, Devas Multimedia, had previously entered into a deal with Antrix, a state-owned Indian corporation, affiliated with the Indian Space Research Organisation, to build and launch two satellites to provide multimedia services via the space band spectrum. After Antrix cancelled the contract, two independent tribunals found that India's conduct constituted an unlawful expropriation of Devas's business. These tribunals ordered the government of India to pay compensation with interest, which now stands at $1.3 billion.
Rather than paying, India has deployed its Solicitor General in an Indian court to argue on Antrix’s behalf for a liquidation of Devas. As it stands now, a liquidator has been placed in charge of Devas and has joined Antrix in court to argue that the arbitration award be set aside.
This week, a federal judge in Washington State will hear arguments to grant injunctive relief to Devas in order to prevent the Indian government, and the liquidator, from harming Devas’s interests, and to ensure the efficacy of the international arbitration system and U.S. law remain intact.
Unfortunately, Devas Multimedia, Vodafone and Cairn Energy are not outlier cases, but representative of a growing pattern by India to undermine the rule of law and to use judicial institutions as tools of intimidation. This is wholly unacceptable behavior in the rules-based system, which underpins the economic and security strength of the free world. Further, it undermines Indian economic growth, as future investors will simply not have faith in India as a safe market for their money.
Foreign Minister Subrahmanyam Jaishankar writes, “India has to maintain a narrative in the United States of its value…whether it is in terms of geopolitics, shared challenges, market attraction.” Add to his inarguably accurate observation, our shared values.
The Indian government would be wise to heed these words. Respect for the rule of law and proper treatment of investors would give confidence to the U.S. that India is serious about a closer strategic partnership.
A new era for India-U.S. cooperation is upon us. The world’s two largest democracies do not need to be reminded of their centripetal acceleration, especially now. India is well positioned as the genuine security leader and democratic model in the Indo-Pac region. With such power, though, comes responsibility. Its up to the government in New Delhi to ensure its behavior aligns with its responsibilities.
James “Spider” Marks is a retired U.S. Army major general. The views expressed are the author’s own.