Context: The United States has announced its next Ambassador to India, Eric Garcetti. Mr. Garcetti, who is known to be a close confidante of Mr. Biden, in Delhi is a sign of things to come. While his appointment signifies the potential for greater partnership, there are also differences in opinion to be overcome in the U.S.-India relationship.
The U.S. may want India to change its stance on the Ukraine crisis, while India may seek to persuade the U.S. to have a stronger position against China.
While India would seek greater partnership with the U.S., it would also be reluctant to sever its stable relations with Russia. As Moscow has just released its foreign policy strategy in which it has identified China and India as its main allies. India is also the president of the Shanghai Cooperation Organization
Areas of convergence:
- The India-U.S. Initiative on Critical and Emerging Technology, launched in 2022, is expected to expand strategic technology partnership and defence industrial cooperation between the governments, businesses, and academic institutions of the two countries.
- The indo-Pacific partnership is aimed at promoting security and economic growth, increasing trade and investment, and enhancing connectivity in the region. The partnership is based on the shared vision of a free, open, and inclusive Indo-Pacific region that is respectful of the sovereignty and territorial integrity of all countries.
- The partnership involves a range of initiatives, including joint military exercises, information-sharing on security issues, and collaboration on economic and infrastructure development projects. It also involves cooperation in areas such as counter-terrorism, cybersecurity, and maritime security.
- One of the key objectives of the Indo-Pacific partnership is to counter the growing influence of China in the region. The U.S. and India share concerns about China’s aggressive actions in the South China Sea, its expanding military presence in the region, and its efforts to establish economic dominance through its Belt and Road Initiative.
- Further India’s growing consumer market makes it an attractive destination for U.S. businesses looking to expand their customer base. India has a relatively low-cost labour force and an abundance of skilled workers in sectors such as Information Technology, engineering, and manufacturing. The government has also implemented policies aimed at attracting foreign investment and promoting economic growth.
- In the past, the nuclear deal, liberalisation of markets, and the outsourcing of Indian techies for U.S. companies are a few key moments of the relationship. Indian Americans are among the most successful immigrants in the U.S
- The U.S. also aided Green Revolution which transformed India from a shortage economy to one with surplus food. The U.S. has also played an important role in making India an IT superpower.
- The U.S. and India are also partners in combating climate change. This involves a wide range of initiatives, including promoting renewable energy, joint research and development projects, and investment in renewable energy infrastructure. The two countries are also aligned on the importance of space technology.
Challenges/Impediments that are likely to be faced
- Infrastructure, logistics, and regulatory systems in India are not as well developed as those in China. India also has a complex legal and bureaucratic system.
- India also feels that the U.S. has not always lent support to it and has instead pivoted to supporting Pakistan. Moreover, the American pull-out from Afghanistan does not inspire confidence in the U.S. as a trusted partner.
- The U.S. has been flagging issues related to terrorism, human rights and democracy in India.
- In agriculture, India has been demanding enhanced market access for its agricultural products in the US market. India has opposed enhanced Phyto-sanitary standards being imposed by USA to curb imports from India.
- For Intellectual property rights, US concerns include piracy of software, film, and music and weak patent protections. Despite the changes in the Patent act, US has raised concerns about insufficient patent protections, restrictive standards for patents, and threats of compulsory licensing.
- Regarding the digital Economy there exist issues regarding data localization, data privacy and e-commerce. The E-commerce rules of India and the Data Equalisation levy have also been contentious trade issues between the two countries. The US feels that these hit global software giants adversely. For ex. Amazon, Apple, Microsoft and Google.
- In the field of pharmaceuticals U.S. Trade Representative (USTR) expressed concern for years about customs duties on medical equipment and devices. Issues increased when the Indian government applied new price controls on coronary stents and knee implants.
India wants cooperation from the US in developing a secure pharmaceutical manufacturing base for augmenting global supply chains.
Conclusion
The U.S. and Indian governments in the past have taken steps to promote closer economic ties and facilitate investment. For example, the U.S.-India Strategic Energy Partnership, launched in 2020, aims to enhance cooperation in areas such as energy security and access, and climate change. Thus building on their strategic partnership, the two countries can slowly become stronger together. This is the time to take the relationship forward constructively and make it reach its potential as well as look for positive areas of collaboration.