INDIA - USA RELATIONS – INTERNATIONAL (MAINS)

INDIA - USA RELATIONS – INTERNATIONAL (MAINS)

 

Q. The latest 2+2 dialogue is a sign that the US and India are developing ‘habits of cooperation’ despite differences of opinion on some issues. Elucidate (15 marks, 250 words)

 

NOTES:

News: India-US ties are maturing into a strong partnership

 

What's in the news?

●       The fifth 2+2 dialogue between India and the United States took place against the backdrop of increasing concern over the Israel-Hamas conflict, the continuing conflict in Ukraine, and disquiet about China’s actions in the Taiwan Strait.

 

India - US Cooperation:

Economic relation:

  1. Trade and Investment: Bilateral trade has expanded exponentially, reaching nearly $191 billion making the US India’s largest trading partner. For the US, India is the ninth largest trading partner.
  2. Foreign Direct Investment (FDI):  American companies have invested around $60 billion in India in sectors ranging from manufacturing to telecommunications and consumer goods to aerospace. And Indian companies have put in more than $40 billion in sectors such as IT, pharmaceuticals, and green energy. E.g.- Air India announced the purchase of more than 200 Boeing aircraft.
  3. Technology and Innovation: Cooperation in sectors such as information technology, biotechnology, space exploration, and clean energy has expanded rapidly, bolstered by joint research projects, academic exchanges, and private-sector partnerships. E.g.- Patent licensing agreements between Indian and US Pharma.

 

Strategic relation:

  1. QUAD: A four-country grouping, which has Australia and Japan alongside India and the US, was repurposed in 2017, primarily as a counter to China’s growing influence in the Indian Ocean region, and as a forum for redoubling focus on the Indo-Pacific region.
  2. I2U2: India, Israel, the US and the United Arab Emirates, are focused on joint investments and new initiatives in water, energy, transportation, space, health, and food security.
  3. US-India initiative on Critical and Emerging Technologies: taken up by India’s National Security Advisor Ajit Doval and his US counterpart Jake Sullivan.
  4. Supply Chain Resilience: Partnership on the Semiconductor supply chain to make it more resilient through private sector cooperation. It creates the possibility of India getting aligned for a more central role in the global electronics supply chain. E.g.- the ‘Chip 4’ alliance initiative of the US with three other top semiconductor makers, Taiwan, Japan, and South Korea.

 

Defence Collaboration:

  1. War exercises: Tiger Triumph, Vajra Prahar, Yudh Abhyas, Cope India, and Malabar Exercise
  2. Defence Technology and Trade Initiative (DTTI) aims to foster co-development and co-production efforts.
  3. Foundational agreements like GSOMIA, LEMOA, COMCASA, and BECA enhance military information, logistics exchange, compatibility, and security between the two countries.

 

Clean energy:

  1. India-U.S. Climate and Clean Energy Agenda 2030 Partnership and Strategic Clean Energy Partnership (SCEP) to deploy clean energy at scale.
  2. Creation of the India-U.S New and Emerging Renewable Energy Technologies Action Platform.
  3. Collaboration to reduce the cost of green/clean hydrogen under India's National Green Hydrogen Mission and the U.S. Hydrogen Energy Earthshot.
  4. Development of joint efforts in carbon capture, utilization, and storage.
  5. Large investments in solar panel manufacturing and steel production in the U.S. by Indian companies.
  6. Acceleration of the deployment of zero emissions vehicles, electric transportation, and the development of biofuels.
  7. Global Biofuels Alliance.
  8. Innovative investment platforms to lower the cost of capital for greenfield renewable energy and battery storage projects.
  9. Enhancement of the bilateral collaboration to secure resilient critical minerals supply chains.

 

Space diplomacy:

  1. Development of a strategic framework for human spaceflight cooperation by NASA and ISRO by the end of 2023.
  2. Delivery of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite and anticipated launch in 2024.
  3. Enhanced commercial collaboration in the space economy due to India's Space Policy - 2023.

 

Challenges in the bilateral relations:

  1. Withdrawal of Generalized System of Preferences: The Generalized System of Preferences (GSP) provided special privileges to India, allowing duty-free exports of goods like textiles and engineering products to the US market. However, the US has withdrawn these benefits, impacting Indian exports.
  2. Crude oil from Russia: At 1.96 million bpd, Russian crude accounted for almost 42 per cent of India’s total oil imports in May 2023, beating the cumulative import volumes from at least the next five major suppliers, like Iraq and Saudi Arabia, as per the Vortexa data.
  3. Visa Delays and H1B Visas: The US has imposed restrictions on H1B visas, which affects Indian professionals seeking work opportunities in the US. There is now a cap on the number of H1B visas issued, creating limitations for Indians moving to the US for employment.
  4. Significant export controls on India inhibit the free transfer of technology. Eg- Import of Dual-use goods which can have civilian as well as military applications
  5. Data localization move of India: The US, is home to major data giants like Google and Facebook that gather significant amounts of data from Indian consumers. India's plan to implement data localization rules, requiring data to be stored within the country, is being opposed by the US.
  6. IPR: US has accused India of Intellectual Property Rights (IPR) violations and has placed India on the "Priority Watch List."

 

WAY FORWARD:

Moving Ahead with Multi-Alignment: With the Ukraine-Russia conflict, global powers have been realigning into new groupings. India has a tough task of walking a very tightrope between Russia and the US. India's approach, till now, has been in the best of its national interests and must continue to be so.

 ◦ India shall calibrate this balancing act and bring dialogue and diplomacy to resolve strong differences, and not be part of the ever-widening chasm which can only result in repercussions that go against world peace.

 

Leveraging the Best Common Interest: The new India-US defence partnership makes it possible to conceive of an Asia that is not vulnerable to domination by any one power.

 ◦ Increasing defence cooperation among the two countries will also help India bridge the massive gap in military capabilities with China with strong support from the US.

 ◦ Both India and the US have a strong interest in stabilising the Asian balance of power and coping with the geopolitical churn triggered by China’s rise and Beijing’s assertiveness in Asia.

 

Economic Intermingling: Indo-US economic engagement needs more ballast with greater flows of investment and trade. US investments in India are pegged at $54 billion, which represent less than 1% of its global investments. Also, India, too, needs to increase investments in the US, creating interdependencies between the two nations is crucial.

 ◦ Bolstering India’s strategic partnership with the US is critical for it to become a developed nation by encouraging manufacturing-led export growth and infrastructural development. This cannot succeed without greater access to the US market and technological cooperation.

 

The India-US iCET is a step in the right direction.

 ◦ India’s economic rise would be in the US' interest just as much as US leadership of technology enablers and global affairs would be in India’s.

 • This reality must not be lost in noise over India’s neutrality on the world stage and its refusal to be bound by a NATO-like-bloc.

 

Cooperation in Sustainable Development:

 ◦ Initiatives like the revamped US-India Strategic Clean Energy Partnership (SCEP) exemplify cooperation in fostering the growth of renewable energy deployment in India.

 • The US can further assist by facilitating access to funds for India’s ambitious goals.

 ◦ By deepening the partnership on clean energy and climate action, both nations can achieve their global climate goals while fostering economic growth, job creation, and energy security.

 

Engaging Private Sectors: Many CEOs are now adopting a “China plus one” strategy, seeking to diversify their supply chains. Recently, Apple’s decision to establish its first retail store in India not only enhances the country’s attractiveness to other tech companies but also showcases its capability to produce cutting-edge technology and strengthen its manufacturing potential. India can signal its readiness to become a hub for chip manufacturing and case manufacturing leveraging US’ assistance or the same.

 

Expanding Coverage to Food Security: In addition to national security, food security is of equal importance to India, if not more – which, however, is being threatened by climate change with increasing temperatures affecting poorer nations disproportionately (India being no exception).

 ◦ The US is at the forefront of technologies not just in defence, space, and semiconductors but also in agriculture.

 ◦ The next round of US-India collaboration shall involve a special attempt to include food and agriculture as one of the core areas of cooperation.

 • It has the potential to do good to the maximum number of people in the developing world, be it in Asia or Africa.