India-USA

Snapshot of 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
• 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
• Vibrant people-to-people interaction and support across the political spectrum in both countries nurture our bilateral relationship as well

Areas and Instruments of Cooperation between India-USA

• Political Cooperation

• • High Level Visits
    • Mutual visits at the leadership level – (Prime Minister, President Level) have been an integral element of the engagement between India and the U.S.
    • The outcomes generated by these visits have been instrumental in further strengthening and developing the multifaceted ties between the two countries
    • Also, both leaders consult at the:
      • India-U.S.-Japan trilateral summits
      • India-U.S.-Australia-Japan Quadrilateral
      • G20 Summits
  • High-Level Dialogue Mechanisms
    • India-U.S. 2+2 Ministerial Dialogue
      • This is led by the heads of foreign and defence ministries of India and the U.S
    • India-U.S. Commercial Dialogue
      • This is led by  and the U.S. Secretary of Commerce
    • India – U.S. Economic and Financial Partnership
      • This is led by the Finance Minister (FM) and the U.S. Secretary of the Treasury
    • India-U.S. Trade Policy Forum
      • This is led by the Minister of Commerce and Industry (CIM) and the U.S. Trade Representative (USTR)
    • India-U.S. Strategic Energy Partnership
      • This  is led by the Minister of Petroleum and Natural Gas and the U.S. Secretary of Energy
    • India-U.S. Homeland Security Dialogue (HSD)
      • The India-U.S. Homeland Security Dialogue is led by the Minister of Home Affairs and the Secretary, U.S. Department of Homeland Security

Defence

• • Defence relationship has emerged as a major pillar of India-U.S. strategic partnership with intensification in defence trade, joint exercises, personnel exchanges, and cooperation in maritime security and counter-piracy
  • India conducts more bilateral exercises with the U.S. than with any other country

• Aggregate worth of defence-related acquisitions from the U.S is worth more than US$ 15 billion.
• The India-U.S. Defence Technology and Trade Initiative (DTTI) is aimed at promoting co-development and coproduction efforts
• In 2016, the U.S. recognised 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
• The announcement of India’s elevation to Tier I of the Strategic Trade Authorization (STA) license exception IN 2018, will further contribute towards facilitating interaction in advanced and sensitive technologies
• The two countries now have four agreements that cover areas of Military Information, Logistics exchange, compatibility, and security between them
  • GSOMIA (a military information agreement) was the first of the foundational agreements to be signed in 2002
    • It essentially guaranteed that the two countries would protect any classified information or technology that they shared
    • It was aimed at promoting interoperability and laid the foundation for future US arms sales to the country
  • LEMOA (logistics exchange agreement) signed in 2016
    • It provides the framework for sharing military logistics, for example for refuelling and replenishment of stores for ships or aircraft transiting through an Indian/US facility
  • COMCASA (communications security agreement) was signed in 2018
    • This enables the US to supply India with its proprietary encrypted communications equipment and systems, allowing secure peacetime and wartime communications between high-level military leaders on both sides

• • Basic Exchange Cooperation Agreement (BECA) signed in 2020
    • BECA will help India get real-time access to American geospatial intelligence that will enhance the accuracy of automated systems and weapons like missiles and armed drones.
    • Through the sharing of information on maps and satellite images, it will help India access topographical and aeronautical data, and advanced products that will aid in navigation and targeting
  • The Defence Cooperation happens on the following cooperation mechanisms as well:
    • Defence Policy Group
    • Military Cooperation Group
    • Defence Technology and Trade Initiative and its Joint Working Groups
    • Executive Steering Groups for Army and Navy;
    • and Airforce, Defence Procurement and Production Group, Senior Technology Security Group, and the Joint Technical Group

Counter-terrorism and internal security

• • Cooperation in counterterrorism has seen considerable progress with enhanced intelligence sharing, information exchange and operational cooperation
  • The bilateral Joint Working Group on Counter-Terrorism is an important mechanism in this regard
  • Both sides have also initiated a Designations Dialogue to discuss designations of terrorists and entities.
  • Apart from the above, both sides also cooperate with each other on counter-terrorism and security issues in various multilateral bodies
  • Recently in 2021, both countries held consultation on counter terrorism cooperation under the India-US Comprehensive Global Strategic Partnership; where both sides pledged to further expand cooperation on law enforcement, information sharing, exchanging best practices and increasing strategic convergence

Cyber security cooperation

• • India-U.S. Have signed Cyber Framework in 2016
  • The two important dialogue mechanisms in this domain are –

• • • India-U.S. Cyber Security Dialogue, and
    • The India-U.S. Joint Working Group on ICT
  • Recently under this, USA has offered to train up to 100 military personnel in Silicon Valley to give them first0hand experience on how to counter cyber-warfare and role of Artificial Intelligence in future defence and warfare

Trade and Economic relations

• • The US was India’s largest export destination and the second largest trading partner in 2020-21
  • India’s exports to the US in 2020-21 were valued at $51.62 billion and imports at $28.88 billion, resulting in a trade deficit of about $23 billion for the US

• • • The top traded goods include pearls and precious stones, pharmaceuticals, machinery, electronics, clothing, vehicles, chemicals and fish products, optical, photo, medical apparatus and aluminium

• • There are several dialogue mechanisms to strengthen bilateral engagement on economic and trade issues, which include
  • Ministerial level Economic and Financial Partnership
  • Ministerial Trade Policy Forum
  • For greater involvement of private sector in discussion on issues involving trade and investment, there is a bilateral India-U.S. CEO’s Forum
  • Further, 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 to meet India’s infrastructure needs

Energy and Climate Change

• • The U.S. has emerged as a key partner for India in the field of energy
  • The bilateral Strategic Energy Partnership launched in 2018 between the two countries is robust and witnessing increasing diversification across both conventional and renewable energy sources
    • As a priority initiative under the PACE (Partnership to Advance Clean Energy), the U.S. Department of Energy (DOE) and the Government of India have established the Joint Clean Energy Research and Development Center (JCERDC) designed to promote clean energy innovations by teams of scientists from India and the United States, with a total joint committed funding from both Governments of US$ 50 million
  • An India-U.S. Natural Gas Task Force was also created in 2018, to build on the scope of work on cooperation in biofuels sector
  • In 2019, the Indian Oil Corporation finalised term contracts for import of crude oil of U.S. origin.
    • These are the first term contracts finalised by any Indian PSU for import of U.S. origin crude oil grades
  • As a priority initiative under the PACE (Partnership to Advance Clean Energy), the U.S.Department of Energy (DOE) and the Government of India have established the Joint Clean Energy Research and Development Center (JCERDC) designed to promote clean energy innovations by teams of scientists from India and the United States, with a total joint committed funding from both Governments of US$ 50 million
  • India and the U.S. are advancing cooperation and dialogue on climate change through a highlevel Climate Change Working Group and a Joint Working Group on Hydroflurocarbon
    • 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 IN 2014

Civil Nuclear Cooperation

• • The bilateral civil nuclear cooperation agreement was signed in October 2008
  • India and the U.S. have a Civil Nuclear Energy Working group on R&D activities, and has ongoing projects under R&D collaboration which are reviewed by the Working Group
  • A S. company – Westinghouse is in discussions with Nuclear Power Corporation of India Limited (NPCIL) for implementation of a project that envisages six AP 1000 reactors at Kovvada (A.P.)
    • Once implemented, the project would be among the largest of its kind

Science and Technology/Space

• • The multi-faceted cooperation between India and the U.S. in the field of Science and Technology has been growing steadily under the framework of the India-U.S. Science and Technology Cooperation Agreement signed in 2005, which was renewed for a period of ten years in 2019
  • The Indo-U.S. Science & Technology Forum (IUSSTF) which was established by India and the U.S. as an autonomous, bi-national organization in the year 2000 to promote cooperation in Science, Technology and Innovation is playing an important role in strengthening cooperation in this field
  • Both countries also have a long history of cooperation in civil space arena that includes cooperation in earth observation, satellite navigation, and space science and exploration
  • The India-U.S Joint Working Group on Civil Space Cooperation regularly reviews the status of cooperation and identifies new areas for furthering space cooperation
  • ISRO and NASA are also working towards intensifying cooperation in Mars exploration, heliophysics, and human spaceflight through relevant working groups between both sides

Indian Diaspora & Cultural Cooperation

• • The number of Indians and Indian Americans in the U.S. is estimated at around 4 million, which accounts for almost 1% of the total U.S. population
  • It includes a large number of professionals, entrepreneurs and educationists with considerable and increasing influence in U.S. polity, economy and the society.
    • They are a big stakeholder in India-U.S. relations having significantly contributed to the growth and development of the U.S. economy
  • Cultural cooperation manifests in form of India-focused educational programs at the Universities and educational institutions
    • Further, the website ‘www.indianembassy.org’ and social media channels, the Embassy provides updated information on various aspects of India that are relevant to the United States, through its various publications, including “India: Partner in Growth”, a weekly newsletter focusing on business and strategic matters, and “India Live”, a monthly newsletter providing information on initiatives of the Embassy and the Consulates, major developments in India, and culture and tourism

Education

• • India and the U.S. have very strong linkages and collaboration in the field of higher education
  • S. is one of the most favoured destinations by Indian students for higher education
  • More than 200,000 Indian students are currently pursuing various courses in the U.S.

Regional and International Cooperation

• • Both countries are collaborating and coordinating on a number of regional and global issues in both security as well as development spheres
  • They are also engaged in areas such as maritime and cyber security, humanitarian assistance and disaster relief efforts
  • The U.S. has expressed support for India’s permanent membership on a reformed N. Security Council and for India’s early membership in the Nuclear Suppliers Group
  • India and the U.S. remain engaged to promote peace, prosperity and security, in the Indo-Pacific as well as globally.

Challenges/Roadblocks

• Economy related

• • Mini Trade War
    • In 2020, America withdrew special trade privileges granted to India under the Generalised System of Preferences (GSP)
      • Under this scheme, the US grants some Indian exports, such as textiles and engineering goods, preferential or duty-free access to the American markets
      • In retaliation, India went on to hike tariffs on 28 American goods, including apples, walnut, iron and steel products
  • India’s high trade barriers
    • The US is especially miffed at India’s action in early 2018 when, in the annual budget, the government had hiked import duties and adopted price caps on a range of imports such as medical devices and ethanol
    • The US government also complained about India’s complex customs clearance procedures, which they said, caused delays, increased costs and added to uncertainty

• Political

• • US cap on H-1B visas
    • The Indian government has strongly objected to this move, arguing that the restrictions on work visas would inhibit Indian workers to move to the US
    • The H-1B visa, popular among Indian IT professionals, is a non-immigrant visa that allows US companies to employ foreign workers in special occupations that require theoretical or technical expertise
  • E-commerce policy and data localisation
    • The US has criticised India’s data localisation and the draft e-commerce policy, calling it “most discriminatory and trade-distortive”
    • The USTR 2019 National Trade Estimate Report on Foreign Trade Barriers noted, “India has recently promulgated a number of data localisation requirements that would serve as significant barriers to digital trade between the US and India.”
    • The US government said India’s data localisation requirements, as mandated by Reserve Bank of India’s rules and the proposed e-commerce Bill, severely hiked the costs for American companies operating in India
      • Also, unfair commercial use as well as unauthorised disclosure of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural products, are also an irritant between the two

• • Ending Iranian oil waivers for India
    • The USA had imposed strict economic sanctions on Iran and restricted its ability to export oil, after withdrawing from the 2015 Iran Nuclear Deal
    • In this perspective, India has been demanding that the American government allow it to continue its imports from Iran, but Washington has remained firm on its position

However, Iran expects that India will soon resume importing oil from it; and this might lead to contentions between India and USA

• Defence related
• • India’s dependence on Russian defence equipment
    • In 2017, the US Congress had passed the Countering America’s Adversaries Through Sanctions Act (CAATSA). According to this Act, sanctions could be imposed on any country indulging in procurement of weapons from a foreign so-called “rogue” government. This legislation was introduced to predominantly target Iran and Russia.
    • India’s decision to buy S-400 Triumf long-range missiles from Russia, worth $5.4 billion, has emerged as a major cause of irritation in India-US relations

• Other Issues

• • Poor enforcement of IPR
    • India continues to feature on the ‘Priority Watch List’ for alleged Intellectual Property Rights (IPR) violations, according to a report by USTR
    • India remains one of the world’s most challenging major economies with respect to protection and enforcement of IP
  • The other irritants include:
    • India’s reluctance to ban Chinese firm Huawei to participate in the upcoming 5G trials
    • US’ decision to exit from Afghanistan also has damaged the India-US relationship

Way forward for better Ties between India-USA

• Being the world’s leading democracies and market economies, India and the US see each other as vital strategic and natural allies and, more so given the rise of China and given the changing geo-political and strategic space in the Indo-Pacific
  • Moreover, both US and India feel the necessity to diversify their supply chain portfolio to avoid over-dependence on China
  • A strong India-US bilateral trade and investment pact along with forums such as ‘Quad’ can help in developing alternative supply chains.
• The re-launch of the India-US Trade Policy Forum (TPF) after a gap of four years is a welcome step to discuss and sort out bilateral trade and investment issues
• Continuous engagement between the two countries though India-US Trade Policy Forum’s (TPF) Intellectual Property Working Group is the way forward
• There is also an opportunity for both countries in the shipbuilding industry.
  • Utilizing the strategic trade authorization license exemption granted by the US to India in 2018, and the bilateral Industrial Security Annex Agreement signed in 2019, India and the US can join efforts to produce the world’s finest and most economical platforms for their partners and friendly nations
• Experts believe Artificial Intelligence and emerging technologies will further define relationships between countries.
  • India should look for opportunities to use its potential and establish its ‘footprint’ in AI and emerging technology.
  • Proactive regulation that protects data privacy; prevents inequitable mergers, anti-competitive practices, and competition law; guarantees free and fair taxation should be the steps ahead

Conclusion

• As India and the U.S. grow closer, engaging in economical parameters, democracy projects demand high cooperation and collaboration on the global front.
  • It is the time when the coalition should take a step ahead from a people-to-people strategy to ground-led strategies.
  • Both the nations should come on a common platform to address rising socio-economic and geopolitical issues sharing a unified vision