Yashwant Sinha served as minister for external affairs and finance in Prime Minister Atal Bihari Vajpayee’s National Democratic Alliance (NDA) coalition government that oversaw the drastic strategic shift in ties towards the US.

Could you explain the reasoning behind the government of the day making the huge strategic shift that it did?

There has always been a section of opinion in India, which during the Cold War days was more inclined towards the Soviet Union than the US, and the entire Left-oriented opinion in this country believed that we must have a strategic alliance with the Soviet Union, but we should keep the US at arm’s length. Now this was the imbalance that was sought to be corrected during Vajpayee’s era because the entire global situation had also undergone a change after the disintegration of the Soviet Union.

Equal interest: Sinha says the strategic partnership will come from deepening the economic and technological relationship. Ramesh Pathania/Mint

While at one hand, we maintained relations with Russia at par with what it used to be with the Soviet Union and we tried to develop relations with the Russian Federation states separately and independently, it also became necessary to look at the wider world and correct the imbalance in the relationship which had existed in the so-called socialistic era. So, this was the the thinking, but the first major roadblock in the development of this relationship came when, immediately after resuming office in March 1998, Vajpayee decided to go for nuclear tests. And that brought the relations with the US, as with other countries in the West, to a new low. We started rebuilding that relations once again, which resulted in the visit of President Bill Clinton to India in March 2000; and then, not only did the Americans lift the sanctions they had imposed on India, but both countries agreed that we will take the relationship to a new level, including the strategic level. And then discussions started on this.

There were four issues, including civil nuclear energy cooperation, in the economic field, in the scientific field. High-level committees were set up consisting of government representatives and business people to suggest ways and means of further deepening the relationship. So, we had taken the relationship to a new level. But I would hasten to add that the underlying thought or principle was sovereign equality. It was not a relationship of subservience to the US. The relationship was sought to be developed to a strategic level on the basis of sovereign equality.

How do you look at the trajectory of relations since the shift? There seem to be many problem areas though the two sides have moved closer, for instance, on terrorism, Pakistan, Afghanistan.

Where terrorism is concerned, where Pakistan is concerned, specially after the US action in Afghanistan, we realized that the fight against cross-border terrorism was our fight. We could not expect any great help from the US in that fight vis-a-vis Pakistan. The US had declared Pakistan as a frontline state for its fight against terrorism in Afghanistan and their entire energy was concentrated on fighting terrorism on Pakistan’s western border.

They were not very much concerned about the terrorism Pakistan was unleashing against India in Jammu and Kashmir and the rest of the country. In fact, the US view was, and continues to be, “Poor Pakistan must have some space for terrorism, otherwise, how else will a Musharraf survive or a Zardari survive or a Gilani survive?" They felt that India should be able to provide that space.

This was clearly unacceptable to us and that is why we kept protesting to the US against the designs of Pakistan but, ultimately, we realized that the fight was our fight. So, then, and even now, there is not much we can expect from the US vis-a-vis cross border terrorism from Pakistan. We will have to look at it as our fight and we will have to win it ourselves.

This is one part of it; the second is that the US has its own world view of things and that would not match with our world view. For instance, as far as India’s relations with Iran is concerned, the US has some very strong views against Iran... As far as the relationship with the US is concerned I would say our regime marked a transformation, a further transformation was marked by the UPA’s first regime, which, in its common minimum programme, said it would correct the imbalance that the NDA started in its relations with the US.

Far from correcting the imbalances, if there were any, they tilted heavily in favour of the US and that sovereign equality principle was diluted in favour of the US. Now my point is this, in deepening our relations with the US, while we must realize that there are common areas, there are commonalities of interest, there are also areas where US views and Indian views are different and will continue to be different; and there we must be able to hold our ground. We should not give in to the US, whether it is a bilateral issue, a regional issue or a global issue.

Given all these points of divergence, where does the “strategic" dimension of our relationship come from?

The strategic partnership will come from deepening our economic and technological relationship. Now the US has had sanctions in place since 1974, when (Indira) Gandhi went for nuclear tests. High-tech items are not permitted to be exported to India on a case-to-case basis.

Now we have been suggesting to the US that they should lift these sanctions, for instance, against Isro (Indian Space Research Organisation), and the US had not found it fit to do this so far. So, the US is holding its ground. They are not giving in. Therefore, India must hold its ground and I would suggest that we need to expand the areas of commonality between the two countries, but it is the responsibility of both partners. If India holds its ground, then the possibility of a mid-point can arise. If India gives up, then naturally we will be tilting heavily in favour of the American point of view.

This is the third presidential visit in a decade. Isn’t that tremendously significant, and a statement in itself of how ties are progressing?

Yes, this is the third presidential visit to India in a decade. So, I don’t know why India is so excited about Obama’s visit. The problem with us Indians is we easily get excited about things. I find from the media and the government statements on both sides that they are trying to keep the expectations low.

President Obama is coming to India in the wake of serious differences between India and the US, not only with regard to the Af-Pak policy or cross border terrorism, but also economic issues such as high-tech exports to India from the US, as this, new-found love for imposing restrictions on outsourcing to India.

These are some issues that are irritating. The other, most important issue is whether the US is willing to support India’s case for a permanent membership of the UN Security Council. It appears to me that in the past six-and-a-half years, we have made enormous concessions to the US. In return, we have not got anything.

Given that President Obama is coming at a time when there are major problems affecting the US economy, can India leverage its economic strength as a bargaining chip in anyway?

Yes, of course. This was something not available to us in the past. Today, India is one of the fastest growing economic powers in the world. And therefore, there is no reason why India should not try to correct the imbalances in our relationship. We must use our economic clout, worldwide economic clout, to inform our relationship with the US. That must be the basis of our relationship and where all that I have said above, where I see the imbalance, has to be put right.

I would like to add that I am very, very disappointed that, just before the Obama visit, India has gone and signed the Convention on Supplementary Compensation of the IAEA (International Atomic Energy Agency). This is a breach of faith, if I could use that expression, and the Manmohan Singh government seems to specialize in this. This is a very serious issue, it exemplifies not only the imbalance but the mindset of this government, the mindset of subservience “Obama is coming, we must do something to please the Americans".

Now the nuclear deal and the civil liability law are going to give enormous advantage to the US economy. How much advantage they will secure for the Indian economy remains a question. The US needs India more than we do (need them). Why were they compelled to lift those sanctions imposed 10-12 years ago? Because they realized that these sanctions were causing more damage to the US than India. Today we are in a much better, stronger position, much happier position now.