The removal of Natwar Singh from the Congress [party] Steering Committee and the Union cabinet is further evidence of the fierce struggle within India’s political and economic elite over the country’s foreign policy. At the center of this struggle is the extent of India’s military and geopolitical ties with the United States, a country which during the Cold War was firmly aligned with India’s traditional arch-rival, Pakistan, and repeatedly tried to bully New Delhi into serving its interests.

Last month Natwar Singh, who in the past has been highly critical of US foreign policy, including the Bush administration’s illegal invasion of Iraq, was pressured into resigning his post as India’s foreign minister after he was named in the report issued by former US Federal Reserve Board chairman Paul Volcker on the purported United Nations oil-for-food scandal.

Nonetheless, Natwar Singh remained in the cabinet as a minister without portfolio and Prime Minster Manmohan Singh and Congress Party boss Sonia Gandhi indicated that he would be reinstated to his foreign ministry post if a government-appointed inquiry exonerates him. As a way of underlining the temporary character of Natwar Singh’s departure from that foreign ministry, Manmohan Singh himself assumed the position of India’s foreign minister

Yet less than a month later Natwar Singh was bounced from the Congress Steering Committee, a step that made his continued participation in the cabinet untenable. Speaking to the press after the steering committee’s action, senior Congress leader and Union Minster Kapil Sibal said, “There can be no clearer message”—Natwar Singh was not wanted in the party leadership.

The pretext for the renewed campaign against Natwar Singh was the claim of a prominent Indian magazine that it had been told by the former Indian ambassador to Croatia, Aneil Matherani, that Natwar Singh had taken “coupons” from the Saddam Hussein regime—i.e., had been given the right to serve as a non-UN sanctioned middleman in Iraqi oil deals.

Matherani subsequently denied ever having made such a statement. But the opposition Hindu supremacist Bharatiya Janata Party and much of the corporate media seized on his reputed remarks to demand Natwar Singh’s head. And as had happened in the immediate aftermath of the publication of Volcker’s report, a section of the Congress leadership fanned the campaign against Natwar Singh with the aim of ousting him from the government and pushing for India to form a still closer alliance with the Bush administration.

At first Natwar Singh resisted, just as he had initially maintained that he would never relinquish the foreign ministry. After all, he was not named in the body of the Volcker report, but only in an appendix, and most other states, including France, Russia and China, have either ignored the report or publicly trashed it as a hatchet-job orchestrated by the US Republican right to bully a United Nations bureaucracy that it perceives as having been insufficiently supportive of the US war on Iraq and to attack various international opponents of US foreign policy.

A defiant Natwar Singh said that were he to quit the cabinet it would be tantamount to admitting guilt and only serve to strengthen the BJP, which had seized on the purported remarks of Matherani to once again paralyze parliamentary business. (Since falling from power in May 2004, the BJP and its National Democratic Alliance have repeatedly sought to destabilize the Congress-led coalition government by scandal-mongering and a seemingly endless series of parliamentary boycotts and walkouts.)

“I am not guilty of any wrongdoing in law or spirit,” declared Natwar Singh. “I refuse to sacrifice myself. I am also aware that if I do that, it will not stop with me.” But on December 6, just two days after Sonia Gandhi presided over a Congress Steering Committee meeting that removed him from the party leadership, Natwar Singh “voluntarily” quit the cabinet, saying he didn’t “want to be an excuse for [the] opposition to stall Parliament.”

Needless to say, the Congress leadership has not explained what changed between the second week in November when Natwar Singh was demoted but kept in the cabinet and early December when he was expelled in all but name from the government. Why was the Congress-led United Progressive Alliance no longer prepared to wait for the ex-chief justice of India, R.S. Pathak, to conduct his government-ordered probe into Volcker’s allegations?

Corporate India has used the Volcker report and Natwar Singh affair to express its growing frustration with the government. Although the Congress-led United Progressive Alliance government has pressed forward with neo-liberal reforms, much of big business sees the UPA as too responsive to pressure from its parliamentary allies in the Left Front, because it has yet to push through a new wave of privatizations or gutted restrictions on the layoff of workers and plant closures (what the press and political elite call “labor law reform”).

But the underlying issue is a major struggle over India’s foreign policy. Natwar Singh is identified with a faction of the Congress party and India ruling elite that is wary of developing too close ties with the US. This faction fears that the US will ensnare India, through commercial and military ties, into a dependent relationship and thereby impede the realization of the Indian elite’s own global-power ambitions.

The opposing faction, which currently is in the ascendance, but is far from having consolidated its dominance, believes that India should fully embrace the Bush administration’s offer of US support in becoming a world power and aggressively pursue closer military and geopolitical ties with Washington. This faction does not deny that the US is courting India with the hope that it will serve as a counterweight to China and strongly agrees that India has no interest in becoming a US proxy in Asia. But it argues that India is strong and savvy enough to escape such a fate, and can balance US pressure by pursuing closer ties with Russia, China and other powers.

That the struggle over India’s foreign and geopolitical strategy is likely to intensify in the coming year has been signaled in recent weeks by two important developments. First, there are the growing concerns within India’s foreign policy establishment over the changes Washington is demanding in India’s nuclear program as the price for proceeding with the US-sponsored deal to give India special status as a nuclear weapons state within the world nuclear regulatory regime. Second, various Indian ministers have proclaimed that the Iran-Pakistan-Indian oil gas pipeline project will soon be officially launched, even as the number two man in the US State Department, Nicolas Burns, declares that he has been assured by the Indian government the pipeline project will remain on the drawing table for years to come.