In the Indo-Pacific, the deepening defence engagement is a bankable pillar of the relationship.
The forthcoming visit of US President Donald Trump has ignited debate on the strength, purpose and direction of Indo-US bilateral ties. While it is clear that the focus will be on defence deals and trade, there has been an underlying sense that such standalone visit by a US President imparts strategic strength to the relationship. For Trump’s maiden trip his itinerary is packed with ceremonial and substantive meetings amidst planned events like “Namaste Trump” and a visit to Sabarmati Ashram.
Beyond the optics, there has been great momentum in the past two years between the two. Soaring tensions on trade and Indian decision to purchase Russian S400 provided a high degree of salience to the negotiations that saw progress in the second 2+2 ministerial meeting held last December. Terming it as a consequential moment in the relationship, both sides agreed to enhance defence cooperation, especially in the maritime sphere. Stress was laid on the shared strategic interests of the two democracies that have an abiding interest in advancing a free, open, and prosperous Indo-Pacific region with ASEAN at the centre. According to US Deputy NSA Matthew Pottinger, the Indo-Pacific captures a geopolitical concept stretching from “California to Kilimanjaro”, accommodating Indian thinking.
The 2+2 framework enables whole-of-government effort to realise the full potential of the Indo-US partnership. It intends to maintain regular communication on emerging developments through the newly established secure communication lines between the Foreign and Defence Ministers of the two countries. India-US Major Defense Partnership aims to build a comprehensive, enduring, and mutually-beneficial defence relationship. Defence technology sharing pact, Industrial Security Annex (ISA), was signed focusing on startups, possibility of exports to identified third nations and practical industry partnerships. The ISA mechanism has helped to co-develop linkages in defence manufacturing and encouraged sharing classified information, while adding value to “Make in India” initiative.
India and US have also identified new technologies for joint development of future warfare systems under the Defense Technology and Trade Initiative, including drone warfare, lightweight arms and networked systems, which is expected to help in co-developing critical technologies. Given that the first ministerial meeting had set the tone and pace for cooperation by India signing the COMCASA, suggested by the US nearly a decade ago, ISA was a logical next step. The meeting also decided to continue the discussion on Basic Exchange and Cooperation Agreement (BECA) in 2020 to enable greater geospatial information-sharing.
The other significant agreement signed was between India’s Ministry of Jal Shakti and US Geological Survey to promote technical cooperation in water resources management and water technology. It includes maintaining river basins, flood management and forecasting, water management, water quality, waste-water recycling and capacity building in testing and instrumentation. Space and counter terrorism cooperation have also been emphasised among other areas.
Given these developments, the forthcoming visit has emphasised the sustained level of strategic confluence. Notably, US Defense Security Cooperation Agency (DSCA) has delivered the certification required for notifying the American Congress about the possibility of military hardware sale to India. Thus, the following defence deals can be expected:
* Trump administration has cleared the sale of an “Integrated Air Defense Weapon System” to India. The IADWS employs a ground-launched version of the AMRAAM missile, which, incidentally, was fired against Indian fighter aircraft by Pakistani jets in February last year. NASAMS-II is estimated to have a range of around 25km, costing $1.86 billion.
* The Cabinet Committee on Security headed by PM Modi on Wednesday cleared the procurement of 24 MH-60R Seahawk multi-role helicopters worth $2.6 billion for the Indian Navy.
While there has been expected level of conclusion on the defence sector, a trade deal has been elusive. Over the last few years, growth in Indo-US trade has been heralded as a symbol of growing partnership. Bilateral trade in goods and services grew at an average annual rate of 7.59% from 2008-2018, doubled in value from USD 68.4 billion to USD 142.1 billion. Figures also reveal India’s trade with the United States rose to $92.08 billion in 2019, a 5.2% increase from its total trade of 2018. US exports to India increased to 3.8% while US imports from India rose to 5.99%. In 2018, America was India’s largest export destination at 16% and second-largest source of imports after China at 6.3%. By contrast, in 2019, India accounted for 2.09% of US exports and 2.30% of total US imports.
Last year, Trump decided to suspend India’s privileges under the GSP program for developing countries, based on the US investigation into India’s market access practices due to petitions by US dairy and medical technology industries. In 2018, India was the largest beneficiary of GSP, over one-tenth of US imports from India entered duty-free under the program, such as chemicals, auto parts, and tableware. GSP removal reinstated US tariffs, which range from 1% to 7% on the top 15 GSP bilateral imports. This has led to intense negotiations on issues such market access for US agricultural products, dairy, medical devices, data rules, and e-commerce regulations. India has offered greater market access for American farm products ranging from alfalfa hay to pecans and dried distillers’ grains. It has also offered to lower the duties on large engine Harley-Davidson Inc. motorcycles. In return, India seeks restoration of its GSP privileges. However, talks are complicated due to India’s latest plans to emphasise local production of medical devices and fresh US tariffs on steel and aluminium to downstream products. Sources claim that a modest trade deal is still possible as 25 out of 30 issues have been sorted, despite the absence of USTR Robert Lighthizer in this visit.
What does this mean for the relationship? Firstly, primacy of economic interests and the constant tit-for-tat tariffs have led to sober reflection on the complexity of a trade agreement. Secondly, conviction that positive trade relations are an important component that defines a deep and multifaceted bilateral relationship has led to continued negotiations. Turbulence over trade issues indicates that despite robust, lengthy and technical negotiations, the long term impact on livelihoods and economy has to be carefully considered. Thirdly, the need to be fully prepared before a final commitment has probably held the Indian side. For the US, the long term goal of gaining access to Indian markets with the satisfaction that normal trade in goods and services would continue is a sufficient incentive to negotiate. For instance, India’s energy trade with the US has increased from $7 billion to $10 billion dollars, with the country having increased its import of crude oil, LNG and coking coal. America has provided a balance to geopolitical crisis in the wake of the Aramco incident and Iranian sanctions. It would appear that both sides are mindful of strategic consequences of having a comprehensive trade deal that is mutually satisfactory. Hence, both have delinked the much-anticipated trade deal from the upcoming presidential visit, while affirming to continue talks with the larger purpose of eventually moving towards an FTA.
Strategic convergence in security matters has been illustrated vividly. In the Indo-Pacific, the deepening defence engagement is a bankable pillar of the relationship. While China factor explains the ready acquiescence in accelerating cooperation, it must be recalled that the strategic shift started with the 2005 defence agreement. Nevertheless, the issue of Indian purchase of S400 from Russia remains an uncomfortable patch.
The Trump visit underscores the personal rapport and chemistry shared by the leaders that often overcomes bureaucratic hurdles and political ennui. It illustrates that such seal of friendship helps many straddled over and under the radar cooperation in sensitive areas crucial to the security of both. Thus, irrespective of occasional divergences, US-India relationship rests on not only shared values but also shared interests. As strategic congruence ties the two beyond the China factor, the scope of the relationship has widened like never before. Lastly, Trump’s visit is an opportunity to move from disagreements to a broad array of agreements.
Professor K.P Vijayalakshmi is Professor of US Studies, School of International Studies, Jawaharlal Nehru University.