Current Affairs

India and US Bilateral Relations: Commitment to strengthen mutual geo-strategic interests

  • Posted By
  • Categories
    World Affairs
  • Published
    25th Nov, 2021
  • Context

    The dynamics of India-US relations are changing. Since the inception of the Biden government, there have been many ups and downs in the relations.Recently, the United States and Indiacommitted to integrating their economies across sectors to harness the untapped potential of the bilateral relationship, at the Trade Policy Forum.

  • Background

    • India-US 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.
    • Regular exchange of high-level political visits has provided sustained momentum to bilateral cooperation, while the wide-ranging and ever-expanding dialogue architecture has established a long-term framework for India-U.S. engagement.
    • Today, the India-U.S. bilateral cooperation is broad-based and multi-sectoral, covering trade and investment, defence and security, education, science and technology, cyber security, high-technology, civil nuclear energy, space technology and applications, clean energy, environment, agriculture and health.
  • Analysis

    What are the different dimensions in the India-US relations?

    • Political Relations:The frequency of high-level visits and exchanges between India and the U.S. has gone up significantly of late. Regular interactions amongst leaders and government representatives has led to better resolving the complicated bilateral issues.
    • Strategic Consultations: Implementation of 2+2 ministerial dialogue.The goal of 2+2 Ministerial is to facilitate the highest-level dialogue on the bilateral, regional, and global issues between countries.
    • Defence Cooperation: The two countries now conduct more bilateral exercises with each other than they do with any other country. India participated in Rim of the Pacific (RIMPAC) exercise with an Indian Naval Frigate. Bilateral dialogue mechanisms in the field of defence include Defence Policy Group (DPG) and Defence Joint Working Group (DJWG). Major significant agreements are:
    • Basic Exchange and Cooperation Agreement
    • Logic Exchange Memorandum of Agreement
    • General Security of Military Information Agreement
    • Counter-terrorism and internal security: Cooperation in counter-terrorism has seen considerable progress with intelligence sharing, information exchange, operational cooperation, counter-terrorism technology and equipment. India-U.S. Counter-Terrorism Cooperation Initiative aims to expand collaboration on counter-terrorism, information sharing and capacity building.
    • Trade and Economic:India-US bilateral trade in goods and services increased. There are several dialogue mechanisms to strengthen bilateral engagement on economic and trade issues. Recently, in the meeting of Indo-US Trade Policy forum decided to further take economic ties to “next high level” and exchange views on “potential targeted tariff reductions”.
    • Energy and Climate Change: The U.S.-India Energy Dialogue aims to promote trade and investment in the energy sector. There are six working groups in oil & gas, coal, power and energy efficiency, new technologies& renewable energy, civil nuclear co-operation and sustainable development under the Energy Dialogue.
    • People to people ties: 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. Indian American community includes a large number of professionals, business entrepreneurs and educationalists with increasing influence in the society.
    • Science & Technology (S&T): The India-U.S. S&T cooperation has been steadily growing under the framework of U.S.-India Science and Technology Cooperation Agreement. Both the governments endowed the India-U.S. Science & Technology Forum (IUSSTF) to facilitate mutually beneficial bilateral cooperation in science, engineering, and health.
  • How the Indo-US Trade Policy forum decided to further enhance economic ties?

    • Market Access: India seeks easier market access for its mangoes, grapes and pomegranates. US demanded quid pro quo for cherries, pork products and alfalfa hay.
    • Action Plan: Frequent meeting of working groups on agriculture, non-agriculture goods and services. The idea is to deliver tangible benefits to farmers and businesses of both countries by resolving outstanding market access issues.
    • Post-covid Plan: Both sides to work with allies to secure pharmaceutical manufacturing base.
    • IT Sector: Hope for IT Sector human capital. India and US to negotiate to help professionals in both countries move statutory social security contributions back to their native country.
  • How deeper cooperation in Indo-US trade can help India achieve $5 trillion economic status?

    • Investment: The potential economic benefits of India’s partnerships with the US are significant. India requires $1 trillion over the next decade to upgrade its infrastructure, which opens the space for growing foreign direct investment. Here, US can play a crucial role. On other hand, good ties with India can help US in economic growth which is hampered due to recent US-China tussle.
    • Trade ties with US allies: Due to the rapid growth of China, collaborating with the US can help India progress from being a South Asian power to an Asian and eventually global power. The improved relationship with the United States would help India’s trade relation with other US allies like Japan.
    • Countering China: A partnership with the US will create more balance in a region which is being increasingly dominated by China. Moreover, the deeper ties with India is an important part of the US’s pivot to Asia Policy. With the rise of India, China’s hegemony is challenged in the region. India can replace China as USA’s top importing country.
    • Multipolarity: With change in global order, it is important for both US and India to deepen their ties as there is no enemy or friends in these times. Whereas the US can help India to rise as an important power in a multipolar world, it can help the US strategically in Indian Ocean by keeping India as a good friend.
    • Defence:The US is critical for India’s indigenous defence production and to reduce the country’s defence import bill. With transfer of significant defence technology and equipment US can help India to be self-sufficient to tackle future dangers. This will help India strategically and economically by increasing defence exports.
  • Various issues between India-US relations:

    • Tariffs:Bilateral tensions have increased over each side’s tariff policies. The US has accused India of relatively high average tariff rates, especially in agriculture. The United States and India are challenging each other’s tariff measures in the WTO.
    • Intellectual Property (IP):The two sides differ on how to balance IP protection to incentivize innovation and support other policy goals, such as access to medicines. India’s IP regime remains a top U.S. concern, and India remains on the “Special 301” Priority Watch List for 2018, based on such concerns as its treatment of patents, infringement rates, and protection of trade secrets.
    • Relations with Russia:The US is the all-time rival of Russia. On contrary, India is a friend of Russia. Russia has always supported India on an international platform. It helped India to develop its defence capabilities. In 2018, India inked the historic agreement worth with Russia to procure four S-400 surface-to-air missile defence system, the most powerful missile defence system in the world ignoring America’s CATSA act. The U.S. threatened India with sanctions however India negotiated and took its stand.
    • Forced Localization:The United States continues to press India to address its forced localization practices, such as in-country data storage, domestic content, and domestic testing requirements, viewed by the United States as presenting barriers to trade with India. At the same time, India has moved to ease some local sourcing rules for single-brand retailers, which would affect companies such as Apple.
    • Services:The United States and India are competitive in certain services industries. A key issue for India is the U.S. temporary visa policies, which affect Indian nationals working in the United States. India is challenging U.S. fees for worker visas in the WTO, and monitoring potential U.S. action to revise the H-1B (specialized worker) visa program.
  • Way Forward

    India and the U.S. should strengthen their relationship on global and regional levels and look for issues of common interest which can provide enormous opportunities for both countries to work closely in reshaping the global political order. Both nations have the potential to grow together benefitting mutual interests and understanding each other better.