Indo-US shaky relations.

(Faisal Zaman, Islamabad)

The partnership between New Delhi and Washington is on critical mode. Although, the crisis has not yet come to a critical stage. But it could be. From decades, New Delhi enjoys a blossom friendship with Washington but from the last three months it may cause damage to their partnership.

Suffice to say, US president Donald Trump meets, recently with the re-elected Prime Minister Naredera Modi in Japan at G-20 summit and secretary of state Mike pompeo is planning a visit next week to India, both convergence and divergence will be on the table.

Under the recent tension in Middle East, Washington’s frosty relation with iran and situation changing in Afghanistan, lets us take the microscopic view of the Us and India relation, both positive and negative.

The positive side:

Over the last two years, there has been steady progress in the U.S.-India relationship. Strategically, both sides have seen the other as playing a crucial role in their Asia strategies—for the U.S., its Free and Open Indo-Pacific strategy; for India, its Act East policy. This has paved the way for deeper diplomatic, defense, and security cooperation. The two countries established a ministerial-level 2+2 defense and diplomatic dialogue last year, their highest-level institutionalized strategic dialogue. Senior bureaucrats and military officials now meet regularly, and their various security dialogues have continued to meet on issues such as defense technology, cyber security, and counterterrorism. Liaisons between the Indian navy and U.S. Naval Forces Central Command in Bahrain, and the countries’ defense innovation units, are being established.

A series of agreements—negotiated for years—that would facilitate greater interoperability and technology transfer have finally been signed. The U.S. and India have operationalized the Logistics Exchange Memorandum of Agreement (LEMOA), implemented the Helicopter Operations from Ships other Than Aircraft Carriers (HOSTAC) program, and signed the Communications Compatibility and Security Agreement (COMCASA). They are also negotiating the Industrial Security Annex that will enable greater cooperation between the defense industries, and have restarted talks on the Basic Exchange and Cooperation Agreement that could pave the way for geospatial intelligence sharing.

Their diplomatic engagements also involve other countries. The two countries have upgraded their trilateral with Japan, with the three leaders meeting last fall, and restarted and continued quadrilateral consultations that also include Australia. In 2018, after a decade, they revived their air force exercise (with Japan present as an observer), and this year, they are expected to start a tri-services exercise. In addition, earlier this year, the Indian navy joined USAFRICOM’s Cutlass Express exercise for the first time, and American observers (along with some from New Zealand) were included in the Australia-India naval exercise. Moreover, the American and Indian navies undertook a group sail with Japan and the Philippines in the South China Sea recently.

Defense trade has been another plus-point. India has started receiving Apache and Chinook helicopters (both of which beat out Russian offerings), and deploying American equipment like P-8is and C-130s to extend its reach in the Indian Ocean region. The U.S. granting India Strategic Trade Authorization Tier 1 status could further facilitate the export of advanced technology. Washington has reportedly approved the sale of armed drones and multi-role helicopters, and the two countries are also in talks for further deals.

Beyond defense and security cooperation, Washington has proved to be helpful to New Delhi in two crises—during the recent India-Pakistan tension following the February 14 terrorist attack in Kashmir, and, in a quieter way, during the Sino-Indian stand-off at the Bhutan-China-India tri-junction in 2017. In the recent flare-up, it backed India’s position, not just rhetorically, but at the United Nations Security Council. It helped draft and push through a statement condemning Pakistan-based terror group Jaish-e-Mohammed and get its leader Masood Azhar designated as a terrorist (a long-standing effort that was being blocked by China). It also took the lead at the Financial Action Task Force to grey-list Pakistan for its lack of action against terror financing. Along with Paris, Washington is now almost playing the role Moscow used to for India in these kinds of forums.

Even U.S.-India economic ties, where strains are pronounced, have deepened over the last few years. In terms of trade in goods, over 2018-19, the U.S. once again become India’s largest trading partner (if one includes services, it has held that rank for a while). Not only has U.S.-India trade grown, but, unlike with many other countries, the American trade deficit with India has decreased (from $27 billion in 2017 to $21 billion in 2018). Both American foreign direct investment into India and Indian foreign investment into the U.S. have increased. India is now also importing U.S. oil and gas (and has also benefited from the downward pressure on energy prices that American production has engendered over the last few years). The number of Indian students in the U.S. has increased, and so has two-way tourist flow.

The negative side:

As the relationship has progressed steadily on many fronts, a number of problems have arisen. Some stem not from bilateral issues, but from U.S. policies targeting other countries. Indian interests have been adversely affected by the American withdrawal from the Paris climate change agreement, aluminum and steel tariffs, and the change in the U.S. approach in Afghanistan that has led to talks with Taliban (which India remains highly skeptical, if not concerned about). Add to that list Washington’s sanctions on oil imports from Iran and Venezuela, both of which have been major Indian suppliers.

Then there’s the Countering America’s Adversaries Through Sanctions Act (CAATSA) passed by Congress in 2017, which was intended to target Iran and Russia. India’s decision to purchase five Russian S-400 long-range surface-to-air missile systems, however, means that it could potentially be the target of sanctions. American officials have also expressed serious concern that the S-400 purchase could limit future interoperability with the Indian military, as well as high-technology cooperation and defense sales.

Legislators have granted the president authority to waive the sanctions, but American officials have made clear that such a waiver is not a given and, among other things, requires India to show it is decreasing its dependence on Russia. And Washington is chagrined that, even beyond the S-400 deal, over the last year, India has signed additional deals with Moscow for leasing a nuclear submarine, a manufacturing facility for Kalashnikov rifles, and the production or purchase of frigates. These four deals, worth over $12 billion (with additional deals being contemplated), would count as “significant transactions” under CAATSA. They also put in perspective the oft-touted statistic that the U.S. and India have signed defense deals worth $16 billion since 2008. And they have come even as Moscow has deepened relations with Beijing, broadened them with Islamabad, and taken a neutral stance during the India-Pakistan crisis (even offering to mediate between the two countries).

The major bilateral sore spot is on the economic side, where friction over trade, investment, and immigration concerns has only increased. To pre-existing American concerns about market access and price controls on medical devices, the Trump administration has added concerns about India’s e-commerce regulations and data localization plans. The Indian government, in turn, has concerns about potential changes to U.S. immigration policies. Recently, the Trump administration ended India’s trade benefits under the Generalized System of Preferences, which affects about $5.5 billion of Indian exports. And the Modi government imposed retaliatory tariffs that it had announced last year, but suspended until this past week. Bigger shocks could be coming if the U.S. did indeed launch a broad-spectrum investigation into India’s trade and investment practices, as is reportedly being considered (or at least floated as a negotiating tactic).

These trade frictions are of particular concern. For one, it is an issue President Trump cares about deeply, and the grounds on which he measures relationships—far more than what any country does or does not do on the defense and security front. Second, he has shown that he is willing to link national security and trade commitments even with allies—this is a far cry from the last two administrations, which prioritized long-term strategic ties over short-term economic frictions. Third, the basket of issues on which there are differences has expanded. Fourth, given that these economic difficulties involve and affect key domestic priorities and constituencies for both governments, concessions are not easy for either side to make. And finally, both sides seem to believe they are speaking from positions of strength and might feel they do not need to make concessions—Modi after receiving an even stronger electoral mandate, and Trump after garnering concessions from countries like Canada and Mexico.

Add to this another potential issue coming down the pike: the security of India’s future telecommunications system. And then there’s the possibility of a U.S.-Iran escalation, which could throw a spanner in the works. It would not just complicate India’s relations with both countries (not to mention Israel, Saudi Arabia, and the United Arab Emirates), but also be seen as seriously disruptive to Indian interests in the Middle East, which houses millions of Indians and is a key source of the oil and natural gas India consumes. Any escalation would also hinder India’s attempt to establish a (non-Pakistan) transit corridor through Iran to Afghanistan. Moreover, it would (once again) distract the U.S. from focusing on Asia, where Delhi sees more converging interests with Washington.

To sum-up, In international politics there is no permanent foes or friends. The things which matter in international politics is “National Interests”. Accordingly, US still need Indian muscles in Asia for countering China interests. On contrary, New Delhi needs Washington for countering Pakistan’s role in Afghanistan.

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