All You Need To Know About India-US Relations

deepak mehto
By deepak mehto October 9, 2019 12:35

India-US relations

Indian Prime Minister visited the U.S. between September 21 and September 27 during which he addressed the annual U.N. General Assembly session and had a series of bilateral and multilateral engagements.

Key Highlights of the Visit

  • PM attended the ‘Howdy Modi’ event in Houston, Texas in which around 50,000 Indian – Americans participated. Houston, the global energy capital has also emerged as the epicenter of India’s energy security efforts in North America.
  • PM spoke at the climate action summit organized by the UN Secretary-General. He highlighted what India has done to address climate change issues and his expectations from the international community.
  • PM invited UN member states to join India’s Initiative on Coalition for Disaster Resilient Infrastructure.
  • PM inaugurated a 50KW ‘Gandhi Solar Park’ on the roof of the UN Headquarters. India has gifted the $1 million solar park, which has one solar panel for each of the 193 UN Member states.
  • PM along with UN Chief inaugurated the Gandhi Peace Garden and released a UN postage stamp on Gandhiji.
  • Bill and Melinda Gates foundation honored PM with ‘Global Goalkeeper’s Goal‘ award for Swachh Bharat Abhiyaan.
  • The first engagement of PM with the top CEOs and representatives from sixteen energy majors of the US. The discussion was focussed on working together for energy security and expanding mutual investment opportunities between India and the US.
  • PM for the first time, met leaders from Pacific Island nations in New York in a plurilateral format. India Extended $150 Million Line Of Credits (LoC) To Pacific Island Nation.
  • India demonstrated its commitment to advancing their development priorities and implementation of projects under the India-UN Development Partnership Fund and a roadmap for future India-PSIDS cooperation.
  • PM also interacted with over 40 business leaders and American CEOs where he highlighted the steps taken by India to build a USD 5 trillion economy.
  • The United States and India will demonstrate dramatic progress of defense relationship by holding the first-ever tri-service military exercise called “Tiger Triumph”.
  • Petronet will spend $2.5 billion for an 18% equity stake in the $28 billion Driftwood LNG terminal, the largest outside holding so far in the project, and negotiate the purchase of 5 million tonnes of gas per annum.

India-U.S. Bilateral Relations

India-U.S. bilateral relations have developed into a “global strategic partnership“, based on shared democratic values and increasing convergence of interests on bilateral, regional and global issues.

The emphasis placed by the Government in India on development and good governance has created opportunity to reinvigorate bilateral ties and enhance cooperation under the motto — “Chalein Saath Saath: Forward Together We Go”, and “Sanjha Prayas, Sab ka Vikas” (Shared Effort, Progress for All).

Today, the India-U.S. bilateral cooperation is broad-based and multi-sectoral. Vibrant people-to-people interaction and support across the political spectrum in both countries nurture our bilateral relationship.

Brief Background

Till 1971 – A Period of Harmony & Discord

●        Prime Minister Pandit Jawaharlal Nehru met with U.S. President Harry S. Truman in 1949 in the U.S. The trip preceded India’s formal proclamation of neutrality in the developing Cold War, in which it took a leadership role within the Non-Alignment movement.

●        In 1962, Nine American universities and the U.S. Agency for International Development (USAID) helped establish one of the first Indian Institutes of Technology at Kanpur.

●        In the 1962 Indo-China War over a disputed frontier, Prime Minister Nehru requested support from the United States. The U.S supported India in the conflict, recognizing the McMahon Line as the border, and provided air assistance and arms.

○        Until the 1965 Inda-Pakistan War, strategic and military ties between Washington and Delhi remain close.

●        U.S. Agronomist Spurred Food Revolution – Norman Borlaug tested high-yield wheat varieties and his collaboration with Indian scientist Dr. M.S. Swaminathan resulted in the “Green Revolution,” which transformed India from food scarcity to self-sufficiency within a decade.

●        In 1965, when India and Pakistan embroiled in their third conflict, the United States supported Islamabad, given its mediating role in Nixon’s rapprochement with China.

○        India also signed a twenty-year Treaty of Friendship and Cooperation with the Soviet Union, sharply deviating from its previous position of non-alignment in the Cold War.

Since 1974 – A Period of Estrangement

●        In 1974, India Completed First Nuclear Test to become the first nation outside the five permanent members of the United Nations Security Council to have declared nuclear capabilities. The move contributed to a period of estrangement between the United States and India that lasted over three decades.

●        In 1978, U.S. Enacted Nuclear Nonproliferation Act, which required countries not included in the Nonproliferation Treaty—which includes India—to allow inspections of all nuclear facilities by the International Atomic Energy Agency. India refused, and Washington ended all nuclear assistance to Delhi.

●        In 1982, Prime Minister Indira Gandhi met with President Ronald Reagan during a state visit to improve the countries’ strained relationship. The leaders agreed to increase cooperation and resolve a dispute over nuclear power.

●        In 1998, India Tested Nuclear Devices – The tests drew international condemnation and badly damaged India’s relationship with the United States. After recalling the U.S. ambassador to India, President Bill Clinton imposed economic sanctions, required under U.S. law.

●        In 2000, President Bill Clinton made the first U.S. presidential trip to India since 1978. The visit ended the estrangement of the post-1998 Indian nuclear weapons tests. The Indo-U.S. Science and Technology Forum was also established during the visit.

●        As India’s economy began to take off, the trip indicated a further shift in Washington’s regional orientation away from its Cold War alliance with Pakistan.

●        In 2001, U.S. Lifted sanctions that were imposed on India after its 1998 nuclear test.

Since 2004 –  A Period of Elevation & New Achievements

●        In 2005, the United States and India signed the New Framework for the U.S.-India Defense Relationship, which sets priorities for defense cooperation in maritime security, humanitarian assistance/disaster relief, and counterterrorism.

●        India and the United States inked the Civil Nuclear Cooperation Initiative, a framework that lifted a three-decade U.S. moratorium on nuclear energy trade with India.

○        Under the agreement, India agreed to separate its civil and military nuclear facilities and place all its civil resources under International Atomic Energy Agency (IAEA) safeguards.

○        The nuclear deal, completed in 2007, made India the only country outside of the Nonproliferation Treaty that has nuclear capabilities and is allowed to participate in nuclear commerce.

●        In 2008, The Nuclear Suppliers Group (NSG), an intergovernmental body that sets guidelines for nuclear exports, allowed an exemption to its rules that permits India to engage in nuclear trade for the first time in three decades.

●        Chandrayaan-1 became the first Indian spacecraft to land on the moon. It carried two scientific instruments designed by NASA scientists, which later discovered water molecules on the moon’s surface.

●        In 2010,  The United States and India formally convened the first U.S.-India Strategic Dialogue.

●        In 2014, the newly elected PM Modi made his first visit as prime minister to the United States. A memorandum of understanding between the Export-Import Bank and an Indian energy agency was signed, which provided up to $1 billion to help India develop low-carbon energy alternatives and aid U.S. renewable energy exports to India.

●        In 2016, the United States elevated India to a major defense partner, a status no other country holds. It means that India will enjoy some of the benefits of being a U.S. treaty ally, such as access to defense technology, though the alliance is not a formal one.

●        In 2018, During a “two-plus-two” dialogue India & U.S. signed ‘The Communications Compatibility and Security Agreement (COMCASA)’ which gives India access to advanced communication technology used in the U.S. defense equipment and allows real-time information sharing between the two countries’ militaries.

Political Relations

The frequency of high-level visits and exchanges between India and the U.S. has gone up

significantly of late.

  • India & US in 2015 issued a Delhi Declaration of Friendship and adopted a Joint Strategic Vision for Asia-Pacific and the Indian Ocean Region.
  • Both have elevated the Strategic Dialogue between their Foreign Ministers to Strategic and Commercial Dialogue of Foreign and Commerce Ministers.
  • A hotline has been established between the Prime Minister’s Office and the U.S. White House.
  • India-U.S. Dialogue Architecture – There are more than 50 bilateral dialogue mechanisms between the two governments. Strategic and Commercial Dialogue at the level of EAM and MoS (Commerce & Industry) has added a commercial component to the traditional pillars of bilateral relations. In addition, there are Ministerial-level dialogues.
  • The hotline between foreign, defense ministers – Hotline is aimed at maintaining regular high-level communication on emerging developments or regional issues.

Strategic Consultations

  • Foreign Office Consultations at the level of Foreign Secretary of India and U.S. Undersecretary for Political Affairs, are an important part of the dialogue structure.
  • A Policy Planning Dialogue has also been started between the two sides in September 2015.
  • US-India 2+2 Dialogue to discuss ways to advance cooperation on critical diplomatic and security priorities.
  • The strategic cooperation with the US encompasses the Indo-Pacific and the two nations have good exchanges on that front.
The term “Indo-Pacific” has emerged as an important geopolitical concept in recent years and refers to the inter-linked destinies of the Indian Ocean and Western Pacific regions. The rise in prominence of this term indicates the eastward shift in the world’s economic center of gravity towards the Asian continent and highlights the relevance of maritime strategy in shaping geopolitical outcomes in the twenty-first century. Arguably, the transition from the term “Asia-Pacific” to “Indo-Pacific” also reflects the rising importance of India as a “natural” balancer in the region.

Civil Nuclear Cooperation

  • The bilateral civil nuclear cooperation agreement was finalized on July 2007 and signed in October 2008.
  • In 2014, the two sides set up a Contact Group for advancing the full and timely implementation of the India-U.S. Civil Nuclear Cooperation Agreement, and to resolve pending issues.
  • Both have started the preparatory work on-site in India for six AP 1000 reactors to be built by Westinghouse.

Defense relationship

  • It has emerged as a major pillar of India-U.S. strategic partnership with the signing of the ‘New Framework for India-U.S. Defense Relations’ in 2005. It was updated and renewed for another 10 years in June 2015.
  • India-US defense trade has increased from US$1 billion in 2008 to over US$18 billion today, making S, India’s second-largest arms supplier.
  • Since 2008, India has purchased sophisticated C-17 and C-130J transport planes, state-of-the-art P-8i maritime reconnaissance aircraft, Harpoon missiles, Apache and Chinook helicopters and M777 howitzers.
  • In 2016, the U.S. recognized India as a “Major Defence Partner“, which commits the U.S. to facilitate technology sharing with India to a level commensurate with that of its closest allies and partners, and industry collaboration for defense co-production and co-development.
  • The agreements signed in the recent past include, Logistics Exchange Memorandum of Association (LEMOA – access to designated military facilities on either side for the purpose of refuelling and replenishment), Fuel Exchange Agreement, Technical Agreement (TA) on information sharing on White (merchant) Shipping, and the Information Exchange Annexe (IEA) on Aircraft Carrier Technologies.
  • In 2018, another defense foundational agreement, the Communications Compatibility and Security Agreement (COMCASA) was inked to “facilitate access to advanced defense systems and enable India to optimally utilize its existing U.S.-origin platforms.”
  • India and the United States have launched a Defence Technology and Trade Initiative (DTTI) aimed at simplifying technology transfer policies and exploring possibilities of co-development and co-production to invest the defense relationship with strategic value.
  • India in 2018 also became just the third Asian country (after formal US treaty allies, Japan and South Korea) to receive clearance on purchasing license-free space and defense technology under the Strategic Trade Authorisation-I.
    • STA-1 allows India to import high-end sensitive technologies like armed drones.
  • The development of the Indo-US Industrial Security Annex is aimed at supporting “closer defense industry cooperation and collaboration” and can enhance technology transfers via identifying new public-private partnership avenues. (Negotiations are underway)
  • Last year saw the first-ever 2+2 dialogue against the backdrop of burgeoning joint exercises such as Cope-India (Air Force), Yudh Abhyas (Army) and Vajra Prahar (Special Forces).
  • The two sides are also increasingly engaged in multi-lateral exercises such as the MALABAR, RED FLAG, and RIMPAC, covering the broad expanse of the Indo-Pacific.
  • The US has recently renamed its Pacific Command as the US Indo-Pacific Command (USINDOPACOM), an acknowledgment of the seamless connectivity that binds the Pacific and Indian Oceans and India’s growing importance.
  • India and U.S have committed to start exchanges between the U.S. Naval Forces Central Command (NAVCENT) and the Indian Navy, underscoring the importance of deepening their maritime cooperation in the western Indian Ocean.

Counter-terrorism and internal security

  • India-U.S. Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing, and capacity building.
  • A Homeland Security Dialogue was announced in November 2010 to further deepen operational cooperation, counter-terrorism technology transfers, and capacity building.
  • In order to further enhance the counter-terrorism cooperation between India and the U.S., an arrangement was concluded in June 2016 to facilitate the exchange of terrorist screening information through the designated contact points.
  • Expansion of bilateral counter-terrorism cooperation, through increased information-sharing efforts on known or suspected terrorists and implementation of UN Security Council Resolution 2396 on returning foreign terrorist fighters.
  • Support to UN Comprehensive Convention on International Terrorism to advance and strengthen the framework for global cooperation and reinforce the message that no cause or grievance justifies terrorism.
  • Both India & U.S have denounced any use of terrorist proxies in the region, and in this context, they called on Pakistan to ensure that the territory under its control is not used to launch terrorist attacks on other countries.

Trade and Economic

  • India-US bilateral trade of goods and services has crossed the goal of US$100 billion set during the term of President Barack Obama, to breach US$126.2 billion as of 2017.
  • Either side’s Foreign Direct Investment (FDI) witnessed double-digit growth in 2017—with US FDI in India rising by 15.1-percent and India’s FDI in the US surging by 11.5 percent.
  • According to CII and Grant Thornton survey, 100 Indian companies have made $ 15 billion worth of tangible investments across 35 states, creating more than 91,000 American jobs.
  • There are several dialogue mechanisms to strengthen bilateral engagement on economic and trade issues, including a Ministerial level Economic and Financial Partnership and a Ministerial Trade Policy Forum.
  • For greater involvement of the private sector in discussions on issues involving trade and investment, there is a bilateral India-U.S. CEO’s Forum.
  • India and the US have set up a bilateral Investment Initiative in 2014, with a special focus on facilitating FDI, portfolio investment, capital market development and financing of infrastructure.
  • S.-India Infrastructure Collaboration Platform has also been set up to deploy cutting edge U.S technologies and serves as a knowledge partner to meet India’s infrastructure needs. U.S. firms will be lead partners in developing Allahabad, Ajmer, and Visakhapatnam as Smart Cities.

Energy and Climate Change

  • The S.-India Energy Dialogue was launched in 2005 to promote trade and investment in the energy sector.
  • India has been sourcing liquified natural gas (LNG) and crude oil from the US, with Indian companies investing $4 billion in US shale gas assets.
  • With India’s energy demand expected to grow at 4.2% per year over the next 25 years, it has contracted 9 million metric tonnes per annum (mmtpa) of LNG from the US, making it the sixth-largest buyer of US LNG.
  • In a first, Indian Oil Corp., the country’s largest refiner, has also inked two-term contracts totaling 4.6 million tonnes (mt) of US crude oil for 2019-20 from Norway’s Equinor ASA and Algeria’s state energy company Sonatrach.
  • Tellurian Inc. has signed a $7.5 billion agreement for India’s Petronet LNG Ltd to buy a stake in its proposed LNG terminal near Lake Charles, Louisiana, in what could potentially be one of the largest foreign investments in the US for shipping shale gas abroad. India is the world’s fourth-largest LNG importer.
  • S. Department of Energy (DOE) and the Government of India have established the Joint Clean Energy Research and Development Center (JCERDC) to promote clean energy innovations, with a total joint committed funding from both Governments of US$ 50 million.
  • Four working groups have been created under the Strategic Energy Partnership—oil and gas, power and energy efficiency, renewable energy and sustainable development.
  • India and the U.S. are advancing cooperation and dialogue on climate change through a high-level Climate Change Working Group and a Joint Working Group on Hydrofluorocarbon.
  • In November 2014, an MoU between U.S. EXIM Bank and Indian Renewable Energy Development Agency (IREDA) was concluded to provide US$ 1 billion in financing for India’s transition to a low-carbon economy.
  • A new S.-India Partnership for Climate Resilience has been agreed to, in order to advance capacity for climate adaptation planning, as also a new U.S.- India Climate Fellowship Program to build long-term capacity to address climate change-related issues.
  • In 2016, the two sides finalized a package to provide concessional finance to support clean energy projects, coordinate efforts on clean energy investment and provide liquidity to small scale renewable energy investors.
  • Civil nuclear energy partnership and collaboration between Nuclear Power Corporation of India Limited (NPCIL) and Westinghouse Electric Company for the establishment of six nuclear power plants in India.
  • US oil exports to India have been surging in recent years from zero in 2016 to nearly ten million barrels in 2017, to 48 million barrels in 2018, to potentially 100 million barrels this year.

Education

  • The Fulbright program was renewed in 2008, with the enhanced mandate and joint funding to provide more student and scholar exchange grants.
  • Of those foreign students, Indian nationals accounted for 17.9 percent in 2017-18—second only to Chinese nationals, contributing US$7.5 billion to the US economy.
  • Meanwhile, the number of US students studying in India has seen a year-on-year increase—from 4,181 to 4,704 in 2017-18.
  • Under the Global Initiative of Academic Networks (GIAN) launched by India, up to 1000 American academics will be invited and hosted each year to teach in Indian universities at their convenience.
  • The two sides are also collaborating to establish a new Indian Institute of Technology in Ahmedabad.

Science & Technology (S&T) & Space

  • A bilateral Joint Working Group on Civil Space Cooperation provides a forum for discussion on

joint activities in space.

  • NASA and ISRO are collaborating for India’s Mars Orbiter Mission and for a dual-band Synthetic Aperture Radar (NISAR).
  • The India-U.S. S&T cooperation has been steadily growing under the framework of S.-India

Science and Technology Cooperation Agreement signed in 2005.

  • There is an Indo-U.S. Science & Technology Joint Commission, co-chaired by the Science Advisor to U.S. President and Indian Minister of S&T.
  • In 2000, both the governments endowed the India-U.S. Science & Technology Forum (IUSSTF)

to facilitate mutually beneficial bilateral cooperation in science, engineering, and health.

  • The S.-India Science & Technology Endowment Fund, established in 2009, under the Science and Technology Endowment Board promotes commercialization of jointly developed innovative technologies with the potential for positive societal impact.
  • Collaboration between the Ministry of Earth Sciences and U.S. National Oceanographic and Atmospheric Administration has been strengthened under the 2008 MOU on Earth Observations and Earth Sciences.
    • A “monsoon desk” has been established at the U.S. National Centers for Environmental Prediction.
  • India’s contribution of $250 million towards the Thirty-Meter Telescope Project in Hawaii and Indian Initiative in Gravitational Observations (IndiGO) with U.S. LIGO Laboratory are examples of joint collaboration to create world-class research facilities.

Health Sector

Under the 2010 U.S.-India Health Initiative, four working groups have been organized in the

areas of Non-Communicable Diseases, Infectious Diseases, Strengthening Health Systems and

Services, and Maternal and Child Health.

  • In order to build up the disease surveillance and epidemiological capacity in India, Global Disease Detection-India Centre was established in 2010 and an Epidemic Intelligence Service program launched in 2012.
  • In the first meeting of the Health Dialogue in 2015, both sides agreed to collaborate institutionally in the new areas of mental health and regulatory and capacity-building aspects of traditional medicine.
Indian Diaspora

“We owe a lot to the Indians, who taught us how to count, without which no worthwhile scientific

discovery could have been made” – Albert Einstein.

●        The 3.5-million-plus strong Indian American community is an important ethnic group in the U.S., accounting for about 1% of the total population in the country.

●        The Indian Diaspora has evolved over three phases in the U.S, firstly the pursuit of education and employment, secondly, a major source of remittances ($10.657 Billion annual remittances from the US to India in 2017) and thirdly as effective players in impacting the dynamics of U.S.

●        They outperform other nationals by working mainly in science, technology, engineering, and math (STEM) fields.

●        To facilitate the travel of their respective citizens, an MOU was signed in 2016 to facilitate India’s joining of the Global Entry Programme for expedited immigration for eligible Indian citizens at U.S. airports.

●        With Indian Americans occupying high-level posts of Governor and several representatives of the people, the Indian Diaspora has assimilated into their adopted country and is acting as a catalyst to forge closer and stronger ties between India and the U.S.

●        Indian Americans are the wealthiest (with household incomes almost double of the American average), most educated and law-abiding ethnic community in the US, a “model minority”.

●        Indian Americans have established several advocacy organizations and political action committees that have done seminal work in advocating issues of importance to India.

○        For instance, the US-India Political Action Committee, Federation of Indian Associations and Indian American Forum for Political Education have aided in promoting fair and balanced policies and also eased the platform for Indians to enter into political processes.

○        It was mainly the lobbying efforts by The National Federation of Indian American Association to crusade to relax the U.S. policy over sanctions on India. As a result, the sanctions imposed on India by the NSG (after Nuclear Proliferation in 1998) were removed on the U.S. recommendation.

○        Another instance is the ID’s notable persuasion towards finalizing of the Indo-US Civil Nuclear Co-operation Agreement.

●        Culture – Several Hindi radio stations are available in America like RBC radio, Easy96 radio, Radio Humsafar, Desi Junction, and Sangeet. Indian Cable channels like Sony TV, ZEE TV, and regional channels are also broadcasted. Many Indian origin artists are a part of Hollywood.

●        The rich civilization and cultural ethos of the Indian Americans have become a part of American fabric with both countries recognizing Indian Diaspora as mutually benefitting.

India’s soft power aims in the U.S. are strategic in nature. The Indian Americans can help in persuading the US government officials to be more favorable and sensitive through methods like pressurizing and campaigning.

Significance of the Relations

  • Message to Pakistan – India and the US are trying to put collective pressure on Pakistan to act against terrorist outfits on its soil.
  • Focus on Indo-Pacific region – In the backdrop of China’s expanding footprint in the region, India and the US will work in concert with other partners toward advancing a free, open, and inclusive Indo-Pacific region, based on recognition of the centrality of the 10-member ASEAN.
  • Quad – India’s vision of the Indo-Pacific and its distinctive inclusiveness in the region is against the premise of multilateralism that the Quad presupposes. ‘Quad’ grouping of like-minded democracies has the potential to dramatically change the region’s security landscape.
  • Afghanistan Policy – US engagement with the Taliban is a central pillar of Afghan politics.

The recent release of at least three Indian engineers under Taliban custody since 2018, shows the significance of US-India ties.

  • Emerging strategic alignment with the US also has a realpolitik relevance over foreseeable US military primacy. Despite its relative economic decline, the US is poised to dominate the military realm due to high defense spending and unparalleled power projection capability of nearly 800 military outposts across 70 countries.
  • Infrastructure development – India has reservations about the financing of huge infrastructure projects that lead countries into debt traps. With the US, it has emphasized the need to work collectively with other partner countries to support transparent, responsible and sustainable debt financing practices in infrastructure development.
  • Energy – India, the biggest emitter of greenhouse gases after the US and China, has been pushing for a gas-based economy and plans to connect 10 million households to piped natural gas by 2020. Also, in the wake of the West Asian Crisis (including US Sanctions on Iran), India is looking forward to diversifying its energy import sources.
    • With state-run Petronet LNG Ltd announcing its plans to invest in Tellurian Inc’s U.S Gulf Coast project, energy has cemented its place as the new bridge in the India-US bilateral relationship. It underlined the importance of energy security in the matrix of India-US relations.
  • Humanitarian assistance and disaster relief – This is an area that both countries have a fair amount of expertise and can cooperate together in helping other countries in dealing with natural disasters and other emergencies.

Major Irritants

  • ‘America First’ Outlook – It magnifies the susceptibility of the bilateral dynamic to transactional. It has created inconsistencies between ‘Make in India’ and ‘America First’ push to indigenization.
  • CAATSA – Ever since the Countering American Adversaries Through Sanctions Act (CAATSA) was enacted in 2017, there had been much speculation in India about its potential impact on India-Russia defense relations, especially in the context of India’s possible purchase of the S-400 missile system.
  • Intellectual Property Rights (IPR) – India continues to remain in the United States (US) ‘Priority Watch List’ for alleged violations of intellectual property rights (IPR) and for posing new challenges that have negatively affected American right holders.
  • Trade Irritants For U.S – India’s price caps on medical devices such as stents; restrictions on US dairy imports; restrictions on foreign companies operating in e-commerce and retail; and new data localization rules.
  • Erosion of Strategic Autonomy – In addition to CAATSA & Iran Sanctions, U.S has urged India to avoid using Huawei equipment as it prepares to roll out a 5G network, and warned that deciding to go ahead with Huawei could impede future intelligence sharing.
Leading the way, India has effectively moved from its historical fixation with ‘strategic autonomy’—a ghost of its nonaligned past, to ‘strategic alignment’. The government has redefined autonomy “as an objective that is attainable through strengthened partnerships instead of avoiding partnerships.”

For example, India found common-ground with China to defend globalization against the America First-brand of protectionism, whilst otherwise embracing the United States on a host of other issues.

  • Generalized System of Preference (GSP) – Earlier this year, amidst mounting American impatience with the continually stalled trade talks between India and the US, the US administration had revoked India’s status under the GSP regime. Since then, trade tensions have gripped bilateral dynamics.
    • In 2018, Washington had imposed tariffs on steel and aluminum exported from India under section 232 of the Trade Expansion Act of 1962 on the grounds of national security.
    • A series of protective measures against India led to a tit-for-tat response from India, which imposed tariffs of $235 million on US goods worth $1.4 billion.
  • Energy Insecurity – Flaring tensions with Iran and Venezuela have put India’s energy security at stake with India dependent on imports for more than 80% of its energy.
  • S lags behind in regard to the ‘Make in India’ as compared to India’s robust technology transfer agreements for fighter aircraft, advanced trainers and submarines with traditional arms suppliers such as Russia, United Kingdom (UK) and France.
  • WTO Disputes – India & U.S are involved in about fourteen World Trade Organization (WTO) disputes at present. These disputes pertain to measures concerning measures on non-immigrant visas, the importation of certain agricultural products, solar cells, and solar modules, iron and steel products, export-related measures, sugar and sugarcane and tariffs on ICT products, among others.
  • Immigration Issues – The US has tightened the process to award H1-B visas. According to US Citizenship and Immigration Services data, the H-1B rejection rates for Indian outsourcers have gone up from around 4-5% two years ago to around 40-50% today.
  • Hate Crime – The racist attack like that in Kansas, sparks concern among Indians that the United States is not safe for them. Increasing anti-immigrant rhetoric causes some prospective applicants to rethink their plans.

Way Forward

  • Compartmentalization could be key – To ensure developments on the strategic front do not get eclipsed by inconsistencies on trade matters.
  • Seeking more institutional touch-points could be effective as Indo- US relations have generally also been overly reliant on a top-down structure.
  • Grab low-hanging fruits such as, reducing Indian duty on imported high-end mobile phones (such as Apple iPhones) and American motorcycles (such as Harley Davidson motorcycles), and raising Indian energy imports from the US to further address the bilateral trade deficit.
  • Conclusion of the ISA – The foundational agreements with the US such as General Security of Military Information Agreement (GSOMIA, 2002), LEMOA, 2016 and COMCASA, 2018 are path-breaking. However, the true potential for high technology transfer involving the Indian private sector would be realized only after the conclusion of the ISA & Basic Exchange and Cooperation Agreement (BECA).
  • Platform synchronization through formal agreements – That mostly pertain to technicalities like geospatial mapping and communications, supplementing the operational synchronisation at play during US-India military exercises.
  • India needs to speed up its defense modernization, especially capacity-building, indigenous manufacturing and access to the most sophisticated defense technologies if it is to play a role commensurate with its ambition and potential.
  • US concerns regarding IPR run deep and remain to be assuaged, just as India’s expectations regarding the transfer of technology and license production remain unfulfilled.

As US-India ties enter seemingly turbulent waters, both nations recognize the relationship’s value for the strategic underpinnings of their respective foreign policies. Each nation must keep the big picture in mind in dealing with the inevitable irritants in their ever-expanding engagement. After all, it is the willingness to discuss differences that makes two democracies like India and the US natural partners.

Also read: Towards A Free Trade Agreement: On India-U.S. Ties

 U.S., India Keen To Wrap Up Trade Deal

deepak mehto
By deepak mehto October 9, 2019 12:35