Commentary on Political Economy

Saturday 23 September 2023



The west’s Modi prob­lem

The US and its allies are cul­tiv­at­ing India as a part­ner, both as a grow­ing eco­nomic power and a bul­wark against China. But its prime min­is­ter’s author­it­arian streak is becom­ing harder to ignore.

On Septem­ber 10, Nar­en­dra Modi led Joe Biden, Rishi Sunak, Justin Trudeau and other world lead­ers on a morn­ing wreath-lay­ing visit to Rajghat, a New Delhi memorial to India’s slain inde­pend­ence hero Mahatma Gandhi.

The spec­tacle, on day two of the G20 sum­mit, of the Indian prime min­is­ter lead­ing the world’s most power­ful people, either bare­foot or slippered and wear­ing shawls, pro­duced strik­ing images that rein­forced both Modi’s image domest­ic­ally and India’s ascent glob­ally as a dip­lo­matic and eco­nomic power.

But behind the scenes, a con­flict was brew­ing that within a week would escal­ate into an acute dip­lo­matic crisis, alarm­ing India’s west­ern allies and rais­ing fun­da­mental ques­tions over the image the coun­try cur­ated at the sum­mit of itself as vish­waguru, or teacher to the world.

Later that day, Modi and Trudeau held a “pull-aside” talk where the two lead­ers exchanged sharp words.

Modi con­fron­ted Trudeau about “anti-India activ­it­ies” among Sikh sep­ar­at­ists in Canada, who favour cre­at­ing an inde­pend­ent state of “Khalistan” in India’s Pun­jab. These “extrem­ist ele­ments” had incited viol­ence against dip­lo­mats and mis­sions, he charged, “threat­en­ing the Indian com­munity in India”.

Back home in Ott­awa this Monday, Trudeau dropped his own bomb­shell into Canada-India rela­tions by pub­licly announ­cing that Cana­dian intel­li­gence had “cred­ible alleg­a­tions” that Indian agents were involved in the assas­sin­a­tion of Hardeep Singh Nij­jar, a Sikh sep­ar­at­ist shot dead in a Van­couver sub­urb in June.

Canada and India have since expelled dip­lo­mats and India has stopped provid­ing visas to cit­izens of a coun­try with one of the world’s largest Indian dia­sporas, with about 700,000 Indian cit­izens and another 1.6mn people of Indian des­cent. India has dis­missed Canada’s accus­a­tions of involve­ment in the killing as “absurd”.

But something big­ger than bilat­eral rela­tions between two G20 mem­bers is now at stake: the all-in geo­pol­it­ical bet the US, UK, Aus­tralia and other coun­tries are mak­ing on India as a demo­cratic ally that also opposes China.

India is becom­ing one of Amer­ica’s most import­ant for­eign part­ners as a bul­wark against China. The US has inves­ted heav­ily in bol­ster­ing rela­tions with New Delhi, with part­ner­ships span­ning areas from defence and high-tech man­u­fac­tur­ing to arti­fi­cial intel­li­gence. Biden gran­ted Modi the high dip­lo­matic hon­our of a state din­ner at the White House in June.

When and if evid­ence emerges that might sup­port Canada’s claim, Wash­ing­ton will face a bal­an­cing act between its closest neigh­bour and a sig­ni­fic­ant rising ally.

Other allies are in a sim­ilar bind. The UK is in advanced stages of nego­ti­at­ing one of its biggest post-Brexit free trade agree­ments with New Delhi. India is the world’s largest importer of arms, and Emmanuel Mac­ron of France, now India’s second-largest arms sup­plier, in July invited Modi as his guest of hon­our at its Bastille Day parade. India is a mem­ber of the Quad stra­tegic secur­ity ini­ti­at­ive, which also includes Aus­tralia, the US and Japan.

These coun­tries have ves­ted much of their geo­pol­it­ical wager not only in India, but in the per­son of Modi.

Dur­ing nine years in office, Modi has built a for­mid­able polit­ical base and sought to project greater power over­seas, includ­ing in its intel­li­gence oper­a­tions. But the Indian leader and key fig­ures in his Bhar­atiya Janata party have also been accused by crit­ics both in India and abroad of stok­ing sec­tari­an­ism, under­min­ing India’s sec­u­lar val­ues and hinder­ing or tar­get­ing journ­al­ists and civil soci­ety groups — actions that have led some of its part­ners to ques­tion its demo­cratic stand­ards.

India’s west­ern demo­cratic allies have mostly lim­ited their com­ments about these con­cerns to brief remarks, often behind closed doors, in the broader interest of a val­ued stra­tegic rela­tion­ship. But if Canada’s alleg­a­tions of an Indian state-backed, extra­ter­rit­orial assas­sin­a­tion are found to be true, they will struggle to keep quiet.

“If the India-Canada imbroglio con­tin­ues to escal­ate, then we could see west­ern nations begin to choose sides and it is likely to be Ott­awa [that wins], pla­cing New Delhi’s part­ner­ships with coun­tries like the US, Aus­tralia and UK in greater jeop­ardy,” says Derek Gross­man, a senior defence ana­lyst at Rand Cor­por­a­tion. “The rationale would be that Modi and his BJP gov­ern­ment are simply untrust­worthy.”

A wider schism would also threaten India’s slow move into the US orbit as ten­sions with China escal­ate. This

“wouldn’t be a good out­come for all con­cerned”, Gross­man adds, “espe­cially against the back­drop of an increas­ingly assert­ive China in the Indo-Pacific and glob­ally”.

Mak­ing the chal­lenges even more fraught, the Indian pub­lic has mostly ral­lied behind Modi in demand­ing evid­ence to sup­port Canada’s claims.

Many Indi­ans are espe­cially sens­it­ive to for­eign cri­ti­cism, but Trudeau’s alleg­a­tions dropped at a del­ic­ate time, days after India’s shin­ing G20 moment.

“They are snuff­ing out the after­glow Modi had enjoyed fol­low­ing his suc­cess­ful shep­herd­ing of the G20 sum­mit,” says Lisa Curtis, an India expert at the CNAS think-tank in Wash­ing­ton.

India’s west­ern part­ners must con­sider the “solid reas­ons” why it is a val­ued ally, says Nirupama Menon Rao, a former Indian for­eign sec­ret­ary and ambas­sador to the US and China. “India has shown itself to be a solid, depend­able, trust­worthy and depend­able part­ner, and it has many attrib­utes that make the rela­tion­ship import­ant for the rest of demo­cracy.”

She adds: “That is not to be trifled with.”

Rising ten­sions

For Canada, the stakes could not be higher: it is now at odds with the world’s two most pop­u­lous coun­tries. It already has a poor rela­tion­ship with China, the main focus of a pub­lic inquiry it launched this month into for­eign inter­fer­ence in recent elec­tions.

Ties with India were already frayed before this week’s bust-up. Trudeau had been a rel­at­ive rar­ity among G20 lead­ers will­ing to openly cri­ti­cise the Modi gov­ern­ment’s policies, as he did dur­ing 2020 protests in which farm­ers tor­pedoed the prime min­is­ter’s planned agri­cul­tural reforms.

India, in turn, had long accused Canada of har­bour­ing extrem­ists under the ban­ner of free speech, includ­ing Sikh “Khalistani” sep­ar­at­ists who have staged unruly protests out­side Indian mis­sions and threatened Indian dip­lo­mats in Canada.

A break­down in rela­tions with India could be costly. Canada’s bilat­eral trade in goods and ser­vices with India exceeds $16bn and Cana­dian pen­sion funds have inves­ted more than $55bn in India, accord­ing to India’s high com­mis­sion in

Ott­awa. The Trudeau gov­ern­ment has now frozen talks on a free trade agree­ment with India.

“Canada is in a dif­fi­cult pos­i­tion here,” says Vin­cent Rigby, Trudeau’s former national secur­ity adviser. “I don’t think they had a choice but to come out. Ulti­mately, if another coun­try does this on your soil you have to hold them to account, but Canada doesn’t hold a lot of cards. I think India holds all the cards.”

Canada’s west­ern allies were ini­tially cir­cum­spect in their response. UK for­eign sec­ret­ary James Clev­erly said that Bri­tain had been in touch with Canada about the “ser­i­ous alleg­a­tions”. Aus­tralia said it had raised the issue with New Delhi.

The Biden admin­is­tra­tion has faced ques­tions about why it had not been more vocal in the after­math of Canada’s explos­ive claim. The White House ini­tially said merely that it was “deeply con­cerned” about the situ­ation. People famil­iar with the admin­is­tra­tion’s think­ing say the US had not wanted to say any­thing that might be con­strued as med­dling in an ongo­ing Cana­dian invest­ig­a­tion.

But as the week pro­ceeded, the White House has been forced to become more forth­right in its sup­port for Canada. Jake Sul­li­van, the national secur­ity adviser, said on Thursday that no coun­try got a “spe­cial exemp­tion” for the kind of actions that Trudeau alleged. “Regard­less of the coun­try, we will stand up and defend our basic prin­ciples,” he said.

However, the alleg­a­tions have cre­ated dis­com­fort for the admin­is­tra­tion by reviv­ing ques­tions that were asked when Modi vis­ited Wash­ing­ton in June about why it was not tak­ing a tougher stance on human rights in India.

These con­cerns have dogged Modi for almost two dec­ades. Until he was elec­ted prime min­is­ter, he was denied a visa to visit the US over his alleged fail­ure to stem com­munal viol­ence when he was chief min­is­ter of Gujarat.

But Curtis at CNAS says she does not believe the alleg­a­tions will have a longterm impact on US-India ties because the Biden admin­is­tra­tion has inves­ted so heav­ily in enhan­cing its rela­tion­ship with India under Modi.

“Only if Prime Min­is­ter Trudeau releases cred­ible evid­ence of Indian involve­ment might Biden respond,” Curtis says. “Even then, the Biden team, which sees India primar­ily through a China prism, would seek to limit the fal­lout and keep rela­tions on a rel­at­ively even keel.”

The nar­row path being trod by India’s west­ern part­ners might be harder to toe if more dam­aging rev­el­a­tions emerge.

While Trudeau has been vague about what intel­li­gence it has, Canada’s state broad­caster CBC, cit­ing unnamed gov­ern­ment sources, repor­ted on Thursday that offi­cials had “amassed both human and sig­nals intel­li­gence” around Nij­jar’s death for months, includ­ing com­mu­nic­a­tions involving Indian offi­cials. The gov­ern­ment also sought New Delhi’s cooper­a­tion in the invest­ig­a­tion before mak­ing its claims, CBC said.

While India’s for­eign allies weigh their words, there is no sign of any domestic blow­back for Modi. By yes­ter­day, Indian news chan­nels, many of which mostly take a nation­al­ist and pro-Modi line, had moved on to other stor­ies.

“This high­lights the inher­ent ten­sions in the bur­geon­ing part­ner­ship between the west and India,” says Hervé Lemahieu, research dir­ector with Aus­tralia’s Lowy Insti­tute. “There are still big dif­fer­ences between how the west views the world and India views the world, and that will con­tinue to be a source of ten­sion in years to come.”


Canada’s bilat­eral trade in goods and ser­vices with India


Level of Cana­dian pen­sion fund invest­ment in India

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