Perhaps the common strategic threat emerging from China and its growing alliance with Russia and Iran will push India and the US to further utilise the potential of this technology diplomacy.
Catastrophes test human resilience and a crisis like the Covid pandemic throws up opportunities. India and the US are realizing that this opportunity can be capitalized for larger strategic goals and economic gains. The two countries have chosen to complement each other on the strategic front in addressing the challenge emerging from the Chinese recklessness and in the wake of Beijing harassing neighbours and threatening to block the supply of critical rare earth metals. Going forward, there is immense opportunity for India and the US to cooperate not only in defence technologies but also in emerging technologies such as advanced robotics, nanotech, AI, big data and analytics. Think tank experts having their interest in technology trade between India and the US are optimistic about the opportunity, which has emerged from the charter of the last Quad meeting of the four nations.
It clearly laid out a plan for India to open up the platform for technology partnership with the US. Experts say that perhaps the greatest use of these high-end technologies lies in the healthcare sector where it would be imperative for various governments not only to track the emergence and spread of future pandemics, but also to create and maintain data banks of health details of their citizens. Space tech, quantum computing, 3D printing, and high-end manufacturing, nanotech application in healthcare are some other areas in which tremendous potential exists for both countries to work together. Also, considering the penetration of Indian tech professionals in the US high-tech industry, it is only logical that greater collaboration between the tech sectors of the two countries will occur more prominently in the coming years.
Perhaps the common strategic threat emerging from China and its growing alliance with Russia and Iran will push India and the US to further utilise the potential of this technology diplomacy.
Richard M. Rossow, Wadhwani Chair in US-India Policy Studies at Center for Strategic and International Studies (CSIS), says: “I am glad to see that strategic technologies were crystalized into a working group. But much more must happen. All the Quad nations have shared concerns about China’s domination of goods trade flows. I hope we can find pathways to work together to reduce trade barriers and make our firms more competitive within Quad markets. And we can also do more to coordinate our respective approaches to infrastructure investments throughout the region. China’s main push into the Indian Ocean Region is through investments or lending for strategic infrastructure. Not every project is suitable for the kind of transparent, financially-sound framework market democracies like the Quad nations require, but we cannot ignore or pursue unilaterally important projects in the region.”
Woodrow Wilson’s Deputy Director Michael Kugelman, an expert on South Asia and India-US affairs, agrees with Rossow. “Certainly we shouldn’t view the Quad as just a security grouping. Consider that the main initiatives to come out of the meeting of Quad leaders some weeks back dealt with largely non-security issues, like the pandemic. Another big non-security space is hi-tech and innovation. There’s a lot of scope for cooperation there, and all four Quad members have much value to add. Humanitarian assistance is another potential area for engagement. Quad literature often speaks of how the Asian tsunami response in 2004 was the first Quad initiative… We could hear a lot about 5G, cybersecurity, and so on. There’s a strong desire to push back against Chinese tech that is perceived by Quad countries to be a security threat due to its surveillance capacities.”
During the pandemic, the vaccines, indirectly also a health technology, was one big unifier. But Indo-US trade and business sectors are exploring to exploit more in this new India-US Quad partnership. Perhaps the game-changer technology sectors are here to be exploited fully. But there are regulatory roadblocks too.
Rossow says, “So far, I am not sure how high the ceiling is on economic cooperation through the Quad. India continues to pursue a path of imposing new trade barriers, and the US is, at the least, in a ‘pause’ on trade liberalization through agreements. Areas like 5G, strategic minerals, pharmaceutical precursor chemicals, and undersea cables have enough of a direct strategic overlay. But that is a relatively small agenda. Trade liberalization will be crucial in emerging areas like robotics, medical devices, autonomous vehicles, renewable energy, among others. So should be ensuring unimpeded data flows between partner nations.”
Kugelman quickly adds, “But keep in mind that these tech issues are major priorities for all Quad countries, especially because of concerns about how Beijing could deploy these technologies.”
But for some trade and investment gurus like Rossow in DC circuit think-tanks, the trade in emerging technologies may be multi-trillion dollar prospect, but barriers remain unresolved in many Indian states, eventually stalling Prime Minister Narendra Modi’s dream to enhance India’s domestic market image. Rossow says, “The Central government under Modi has made good strides in improving the domestic business environment. But openness to trade flows remains a key weakness. And India’s states must start working more actively to present more transparent, business-friendly regulations. Most of the bottlenecks to manufacturing like labour laws, electric power, and land access are primarily controlled by India’s states.”
Added Kugelman, “Tech is an area where there’s ample potential for US-India cooperation, as each side has much to offer in terms of expertise and capital, but there are notable constraints. Differing views on issues like data localization, for example, hold the two sides back. These constraints are certainly surmountable. But it will take time.”
Still sectors like Artificial Intelligence and 5G business will play a key role in new strategic relations as these are important both commercially and for security reasons. Rossow elaborates: “We cannot allow Chinese firms, with their visible and invisible linkages to the Communist Party and security establishment, to become the dominant global players. While our governments will have limited roles in pursuing commercial agreements for our respective private sectors, we can work together with other nations to ensure fair and transparent bidding, coherent regulations, and other baseline issues that provide an even playing field for non-state firms to win contracts and grow their business.”
And there can be more for India and the US to engage in emerging technologies in the areas of climate and energy. For some like Kugelman, “Climate change is another one of those evergreen shared threats that bring the Quad countries together. All four are vulnerable to climate change in different ways. There should be ample grounds for information-sharing and eventually technology-transfers in ways that can help promote clean energy projects and climate change mitigation more broadly.”
Rossow points out the need for this technology partnership from India point in energy sector. He says: “India will put more resources towards its electric power sector and related energy areas in the coming 20 years than in the nation’s entire history. But the political pressures to keep costs at extremely low levels means innovators must push the boundaries of what is possible. Material scientists will have to leverage new materials for more efficient, lower cost transmission of power with reduced losses. Data scientists will create programs that help regulators understand pricing issues and visualize where losses are happening in the grid. Storage will evolve, unlocking more investments in renewable energy. Software firms will improve billing. Technology hardware firms will create versatile, low-cost smart meters that will provide greater visibility on the grid.”
Rossow, who keeps visiting India and monitors the Indian states regularly, is critical of the fact that though it is an opportunity waiting to be rightly and optimally exploited, other countries are entering into prospective market share of India. The CSIS expert says: “India already is a key technology partner in terms of engineering, software, and related IT-enabled services. India has had a difficult time keeping up with human resources requirements in the past, however—lots of IT graduates, but too few with real job skills. Philippines and other markets began to take some level of market share. But India’s dynamic tech firms like HCL, TCS, and others have moved higher on the value chain—and will continue to do so—as long as the government doesn’t damage the regulatory environment through difficult data regulations or tax laws.”
The market is large enough where many tech firms have already put manufacturing in the market. To become a dominant global manufacturer, India must pursue additional reforms on land, labour, and clear other barriers of “permission raj” by our babus. And, as noted earlier, India’s states must aggressively reform since most issues lie with the states.