7 PM | With pacts on defence, oil and LNG, new chapter begins in India-US relations| 26th February, 2020

Context:Outcome of US President Trump’s visit to India.

More in news:

  • The President of the United States of America, Donald J. Trump, paid a State Visit to India on 24-25 February 2020, at the invitation of Prime Minister Shri Narendra Modi.

U.S. President Donald Trump’s visit:

  • Both the leaders, Prime Minister Modi and President Trump vowed to strengthen a India-U.S. Comprehensive Global Strategic Partnership, anchored in mutual trust, shared interests, goodwill and robust engagement of their citizens.
  • Tens of thousands of people lined the streets of Ahmedabad city in Gujarat, to welcome US President. The leaders later addressed a crowd of more than 100,000 people at the Motera cricket stadium.
  • U.S. President Donald Trump and his wife Melania later paid tribute to Mahatma Gandhi at Sabarmati Ashram.
  • First day ended with the visit to the iconic place, Taj Mahal, at Agra.
  • US President Donald Trump & First Lady Melania Trump pay tribute to Mahatma Gandhi at Raj Ghat.
  • US First Lady Melania Trump attended a session of the ‘Happiness Class’ at the Sarvodaya Co-Educational Senior Secondary School in New Delhi.
  • US President Donald Trump on Tuesday attended the state banquet hosted in his honour at the Rashtrapati Bhavan by President Ram Nath Kovind, the last function of his two-day visit to India.

Major outcomes of the visit:

  • Defence Deal:
    • The two countries signed the agreements for India to purchase advanced American military equipment, including Apache and MH-60 Romeo helicopters valued at over $3 billion.
    • As India works to acquire new defence capabilities, President Trump reaffirmed India’s status as a Major Defense Partner affording it the highest consideration for procurement and technology transfer purposes.
    • The leaders looked forward to early conclusion of defence cooperation enabling agreements including Basic Exchange and Cooperation Agreement.
  • A Letter of Cooperation in energy security:
    • A memorandum of understanding (MoU) between Indian Oil Corp. Ltd and ExxonMobil India LNG Ltd with the Chart Industries (cryogenic equipment manufacturer) to supply liquified natural gas (LNG) by road, rail and waterways to areas not connected by physical pipelines.
    • The MoU includes fuelling stations and alternative LNG mobile transportation, including railcars and International Organization for Standardization (ISO) containers.
    • India has been rapidly increasing its imports of oil from the US after it slashed its imports from Iran and Venezuela.
    • It is expected that in the near future, oil would replace armaments as India’s main imports from the world’s largest economy.
    • Through their Strategic Energy Partnership, India and the United States are seeking to enhance energy security, expand energy and innovation linkages across respective energy sectors, bolster strategic alignment, and facilitate increased engagement between industry and other stakeholders.
  • Promote affordable medication: Both the countries committed to continuing their successful efforts in the areas of prevention, early detection, and rapid outbreak response. They hailed a bilateral Memorandum of Understanding (MoU) that seeks to promote access to high quality, safe, effective, and affordable medications for Indian and U.S. consumers.
  • MoU for mental health challenges: Memorandum of Understanding signed to help both countries address mental health challenges through innovative approaches
Text Box: Why trade with the US matters to India?
•India recently backed out of Regional Comprehensive Economic Partnership (RCEP), the world’s “largest” regional trade pact. Shutting the door on the large “integrated market” that the RCEP deal was offering, it is important for India to look for other sizeable market.
•Also, in the backdrop of the global economic slowdown, where India’s global exports have fallen consistently, it is important for the country to diversify and strengthen bilateral relations with other markets.
•Thus, India has set its sights on “large developed markets”, improved access to which would help its industry and services sectors, which includes the US. US over the last two decades has become a crucial trading partner in terms of both goods and services.

Way Forward:

  • The two leaders agreed to open negotiations on a big trade deal.
  • US have inched ahead of China to become India’s top trading partner so far this year.
  • Data released by the commerce ministry showed that in 2018-19, India-U.S. bilateral trade stood at $ 87.95 billion as compared to India-China bilateral trade worth $87.07 billion. In April-December 2019-20, bilateral trade between the U.S. and India stood at $68 billion, as compared to $64.96 billion with China.
  • A trade deal in near future will help both countries to deepen their relation.


The strong strategic partnership is also based on an idea of “shared values” of democracy, rule of law, religious freedom and protection of minorities. Both the leaders intend to foster cooperation among their industry and academia for open, secure, and resilient supply of strategic materials and critical infrastucture, and to independently evaluate the risk associated with deployment of emerging technologies.


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