India-US Relations | 07 Jun 2023

Why in News?

India and the United States have agreed to initiate negotiations for a 'Security of Supply' (SoS) arrangement and a 'Reciprocal Defence Procurement' (RDP) agreement, aiming to promote long-term supply chain stability and enhance security and defense cooperation between both countries.

• A SoS agreement is a bilateral or multilateral agreement between countries aimed at ensuring the availability and stability of critical supplies, particularly in the field of defense and security.
• An RDP agreement is a bilateral agreement between countries in the field of defense procurement. It is designed to facilitate reciprocal procurement of defense items and promote cooperation in research, development, and production of defense equipment.

What are the Key Highlights of the Agreement?

• Assembling Electric Jets in India:
  • Both sides discussed the deal for assembling General Electric GE-414 jets in India, which is yet to be finalized.
• Defence Industrial Cooperation:
  • The roadmap for 'Defence Industrial Cooperation' has been concluded between India and the US, guiding their policy direction for the next few years.
  • Both countries will identify opportunities for co-development of new technologies and co-production of existing and new systems, promoting collaboration between defense start-up ecosystems.
• Capacity Building and Infrastructure Development:
  • Capacity building, including Maritime Domain Awareness (MDA) and strategic infrastructure development.
  • Increase sourcing by US companies from India, particularly Boeing under the mega-civil aircraft deal with Air India.
    • The establishment of Maintenance, Repair and Overhaul (MRO) facilities by US companies in India to cater to the equipment used by the Indian armed forces and the region.
• US-India Defence Acceleration Ecosystem (INDUS-X):
  • The US-India Business Council will launch the INDUS-X initiative to advance cutting-edge technology cooperation between US and Indian companies, investors, start-up accelerators, and academic research institutions.

How have been India’s Relations with the US?

• About:
  • The U.S.-India strategic partnership is founded on shared values including a commitment to democracy and upholding the rules-based international system.
  • Both have shared interests in promoting global security, stability, and economic prosperity through trade, investment, and connectivity.
• Economic Relations:
  • The U.S. has emerged as India's biggest trading partner in 2022-23 on account of increasing economic ties between the two countries.
  • The bilateral trade between India and the U.S. has increased by 7.65% to USD 128.55 in 2022-23 as against USD 119.5 billion in 2021-22.
    • Exports to the U.S. rose by 2.81% to USD 78.31 billion in 2022-23 as against USD 76.18 billion in 2021-22, while imports grew by about 16% to USD 50.24 billion.
• International Cooperations:
  • 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.
  • The United States welcomed India joining the UN Security Council in 2021 for a two-year term and supports a reformed UN Security Council that includes India as a permanent member.
  • Together with Australia and Japan, the United States and India convene as the Quad to promote a free and open Indo-Pacific and provide tangible benefits to the region.
  • India is also one of twelve countries partnering with the United States on the Indo-Pacific Economic Framework for Prosperity (IPEF).
  • India is a member of the Indian Ocean Rim Association (IORA), at which the United States is a dialogue partner.
  • In 2021, the United States joined the International Solar Alliance headquartered in India, and in 2022 the United States Agency for International Development (USAID).

Way Forward

• The partnership between the two countries is critical for ensuring a free, open, and rules-bound Indo-Pacific region.
• The unparalleled Demographic Dividend provides enormous opportunities for the US and Indian firms for technology transfer, manufacturing, trade and investment.
• India is emerging as a leading player in an international system that is undergoing an unprecedented transformation. It shall use its present situation to explore opportunities to further its vital interests.

Source: TH