Navigating India US Relations

The Prime Minister of India addressing a joint session of the US congress (a rare honour for a visiting leader from overseas) is evident of the fact that India-US relations are deepening and widening and is envisaged as “a momentous development that will benefit not just the US and India, but the world at large”.

The bilateral relations between India and the US are built upon various factors including the increasing market size of the Indian economy, growing influence of the Indian diaspora in American business and politics as well as their consensus on the need of the hour to contain Chinese aggression.

As the US deepens its Indo-Pacific engagement and India solidifies its regional prowess, the partnership between these democratic powerhouses has the potential to reshape the geopolitical chessboard.

What is the Current Scenario of India-US Relations?

• Economic Progress:
  • Bilateral trade between the two countries has grown tenfold since 2000, to USD 191 billion in 2022, and India became the 9th largest US trading partner in 2021. The rise in bilateral trade in goods and services reached ~160 billion USD in 2021.
  • The US is India’s largest trading partner and most important export market. It is one of the few countries with which India has a trade surplus. In 2021-22, India had a trade surplus of USD 32.8 billion with the US.
• Political Like-mindedness:
  • Both the countries have like-minded views about the efficiency of IPEF for continued growth, peace, and prosperity in the Indo-Pacific region.
    • India has also joined the US-led Indo-Pacific Economic Framework for Prosperity (IPEF).
  • However, the two countries have quite contradictory responses towards the Russia-Ukraine crisis, Afghanistan issue and Iran.
• Defence Cooperation:
  • India, which could not access US weapons during the Cold War, has bought USD 20 billion worth of arms over the last two decades.
    • However, the incentive for the US is helping India reduce its historical dependence on Russia for its military supplies.
  • The armed forces of India and the US engage in extensive bilateral military exercises (Yuddha Abyas, Vajra Prahar) and minilateral ones with the four partners in the Quad Forum (Malabar).
  • Another grouping in the Middle East - I2U2 involving India, Israel, UAE and the US is being termed as the new Quad
• Upcoming Developments:
  • Micron Technology (a US company) will invest around USD 2.75 billion in the next five years to build a new semiconductor assembly and test facility in India.
    • This further involves USD 400 million investment in 4 years to set up a collaborative engineering centre along with the training of 60,000 Indian engineers.
  • The biggest takeaway is the deal between General Electric Aerospace and HAL to manufacture under licence GE’s F414 engine for India’s light combat aircraft - this deal marks the end of the technology denial regime.
• India as a US Ally:
  • Despite vast mutual, strategic interests of the two countries, India cannot be termed as a ‘US ally’ due to its foreign policy approach of non-alignment.
    • Indian leaders across parties and over decades have long prioritised foreign policy independence as a central feature of India’s approach to the world.
  • Especially since the end of the Cold War, Indian leaders have sought to improve ties with the US, but not by curtailing India’s independent approach to foreign policy.
• India’s ‘Multi-Aligned’ Foreign Policy:
  • The PM of India has described the “world as one family” (vasudhaiva kutumbakam), to frame Indian diplomacy.
    • This approach has been termed “multialignment,” - seeking positive ties as far and as widely as possible.
  • Along this theory, India has carefully managed its relationships with Saudi Arabia as well as Iran; with Israel as well as the Palestinian Territories; with the US as well as Russia.
    • India has reserved the right to engage with those who aren’t the US allies - Russia, Iran and even China - if its national interests dictate such a need.

What are the Major Challenges between India and the US?

• US Criticism of India’s Foreign Policy:
  • If the Indian elite has long seen the world through the lens of non-alignment, alliance relationships have been at the heart of US’ foreign policy since the Second World War.
    • India’s policy of nonalignment especially during the Cold War has always been a point of concern for the West, especially the US.
  • After the 9/11 attacks, the US asked India to dispatch troops to Afghanistan; the Indian military vetoed the request.
    • When the US invaded Iraq in 2003, even then India’s erstwhile PM withheld military support.
  • Even today, India refuses to toe the American line on the Russian-Ukraine war and its import of cheap Russian oil continues to break records.
    • Pro-US voices have often been raised demanding India to get “on the right side of history”.
• India’s Engagement with US Adversaries:
  • India has criticised the US decision to block Iranian and Venezuelan oil from the open market.
  • India has actively worked to bring Iran into the SCO (Shanghai Cooperation Organization).
  • India has also held 18 rounds of talks with China to resolve the border dispute besides remaining a key participant in the China-backed Asian Infrastructure Investment Bank.
• US’ Criticism of India’s Democracy:
  • Various US organisations and foundations, from time to time, with the tacit support of some Congressmen and Senators, come out with reports questioning the present state of democratic discourse, press and religious freedom and condition of the minorities in India.
    • Some of them include the International Religious Freedom Report 2023 and the Human Rights Report on India 2021 by the US State Department.
• Economic Tensions:
  • The Atmanirbhar Bharat Campaign has exacerbated the view in US that India is increasingly becoming a protectionist closed market economy.
  • Effective since June 2019, the USA decided to withdraw duty-free benefits to Indian exporters under the GSP programme affecting India's export-oriented sectors such as pharma, textiles, agri products and automotive parts.

What can be Done to Improve the India-US Relations?

• 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.
  • This move is a crucial indication that companies are diversifying their supply chains away from China.
  • India can also 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.

Conclusion

• The Indian prime minister put it during his address to the joint session of the US Congress -
• “In the past few years, there have been many advances in AI — Artificial Intelligence. At the same time, there have been more momentous developments in another AI — America and India.” This reflects the growing relation between India and USA in the past recent years.

Drishti Mains Question: “While Indian and US’ policies are at variance in countries such as Russia, Iran and Afghanistan, China is the one interest that aligns the two countries together and hence, offers a good possibility to cooperate”. Comment.