India-US relations: Different dimensions
Context: India will host the third edition of 2+2 ministerial dialogue with the US.
It is an official format of dialogue where participants are the defence and foreign ministers or secretaries with their counterparts from both participating countries. The goal of 2+2 Ministerial is to facilitate the highest-level dialogue on the bilateral, regional, and global issues between countries.
India holds such talks at the foreign secretary and defence secretary level with Australia but with Japan and the US, these talks were held at the ministerial level.
- 1st India-US 2+2 dialogue was held in New Delhi in September 2018.
- In December 2019, the United States hosted the second 2+2 Ministerial Dialogue in Washington.
- While the 2+2 serves as the premier dialogue mechanism between the United States and India, there are more than thirty bilateral dialogues and working groups.
- In the upcoming 3rd dialogue, India and the US are expected to sign the Basic Exchange and Cooperation Agreement (BECA) for geospatial cooperation.
- It will be the 3rd foundational agreement after Logistics Exchange Memorandum of Agreement and the Communications Compatibility and Security Agreement.
Significance of the 3rd 2+2 dialogue
Present visit of Mark Pompeo in the backdrop of recent tensions with China is very important for India on 3 fronts: the LAC, in the maritime sphere, and in the South Asian Association for Regional Cooperation (SAARC).
- Indo-Pacific– On the maritime sphere, discussions will include strengthening ties in the Indo-Pacific region and also include discussions on how free nations can work together to thwart the threats posed by the Chinese Communist Party.
- BECA Agreement – The U.S. wants India to sign the Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation (BECA), at the India-U.S. 2+2 ministerial dialogue.
- This agreement would facilitate exchange of geospatial information between India and United States for both military and civilian use.
- LAC front– US could agree to keep the pressure on Pakistan on terrorism, despite the US need for Pakistan’s assistance in Afghan-Taliban talks.
- SAARC– On the SAARC region Pompeo from US will also be visiting Male and Colombo, it would be significant in reducing the influence of China in these countries.
Different dimensions of India-US relations
The relations between India and the US have gone through many ups and downs.
India US Defence relations
On the defence fronts, India-US relations are far better compared to the trade-related relations.
- The US has tried to clear all roadblocks in the way of India for making any defence related purchase e.g India is “the first non-treaty partner to be offered an MTCR Category-1 Unmanned Aerial System” from US.
- In November 2019, the first-ever India–US tri-service military exercise (called “Tiger Triumph”) was held. Malabar exercises are being held between India, US and Japan to improve coordination between their maritime fleets. Australia has also been included recently.
- Before the present BECA deal (being negotiated), Logistics Exchange Memorandum of Agreement (LEMOA) and Communications Compatibility and Security Agreement (COMCASA) were signed between India and US.
- India and the United States cooperate closely at multilateral organizations, including the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization.
- In 2019, the United States joined India’s Coalition for Disaster Resilient Infrastructure to expand cooperation on sustainable infrastructure in the Indo-Pacific region.
India-US Trade relations
India’s trade relations with the US has been a mixed bag of issues and achievements.
- From 1999 to 2018, trade in goods and services between the two countries surged from $16 billion to $142 billion. In 2019, overall U.S.-India bilateral trade in goods and services reached $149 billion.
- In 2018, the Indian manufacturing trade in the US reached US$50.1 billion for the first time, surging by approximately US$6 billion over the 2017 figures.
- The US has become India’s second-largest arms supplier. India–US defence trade. From nearly zero in 2008, it has increased to over US$15 billion in 2018
- India is poised to order a record 2,300 new planes, possibly from US manufacturers such as Boeing, over the next 20 years.
- India’s import of US crude rose threefold in early 2019.
Trade deficit: the US is one of the countries, with which India enjoys a trade surplus. Although the trade surplus is reducing with time, it is still at $23.3 billion. It is one of the concerns of US officials.
Tariff barriers: US officials have been critical of India’s Tariff and non-tariff barriers. In the past, President Trump has called India’s tariffs “unacceptable,” and has described India as the “king” of tariffs. Whereas in 2018 the US levied across-the-board import tariffs of 25 per cent and 10 per cent, on steel and Aluminium, respectively. India increased tariff on Agri products from the US in retaliation.
Non-tariff Barriers: India has been putting many Non-tariff restrictions on the US products e.g. India’s restrictions on US daily products due to ‘blood-meal’, a protein-rich dietary supplement for cattle that utilises blood from slaughtered animals.
GSP: Following a public review process, the Trump administration removed India from the GSP program on the pretext that India is prohibiting the “equitable and reasonable” access to its markets.
Intellectual property rights (IPR): Intellectual property rights in India have been a chief U.S. concern. As per “Special 301 report” of US, India continues to be on the ‘Priority Watch List’ of the United States Trade Representative (USTR) for lack of adequate intellectual property (IP) rights protection and enforcement and copyright policies that do not properly incentivize the creation and commercialization of content
Data localisation requirement: India’s requirement for Fintech companies to store and process data in local servers also became a cause of concern among US companies.
People to people relations
The strong people-to-people ties between our countries, reflected in a four million-strong Indian American diaspora, are a tremendous source of strength for the partnership.
The total number of Indian students in the United States has more than doubled over the last decade, from 81,000 in 2008 to a record high of 202,000 in 2019.
Visa related: With the popularity of ‘America First’ slogan in the US, there have been continuous efforts to cut down the outside workforce. Repeated restrictions on visas are one of such examples, recently, US state department has decided not to issue temporary business visas for H- 1B speciality occupations which allowed several companies to send their technology professionals for a short stay to complete jobs on-site in the US, a move which could affect hundreds of Indians.
A new trade deal with the US is the need of the hour. It will make it a lot easier to deal with Trump’s administration on a range of issues including terrorism, Kashmir and the unfolding crisis in Afghanistan.
As the Presidential elections are approaching, US state department might be in hurry to resolve some of the pending issues the U.S. should be pushed on resolving trade issues with India and perhaps commit to restoring India’s Generalized System of Preferences status for exporters.
The government could press for more cooperation on 5G technology sharing or assurance that its S-400 missile system purchase from Russia will receive an exemption from the U.S.’s Countering America’s Adversaries through Sanctions Act (CAATSA) sanctions.