At the heart of Indo-US ties: Economics & Strategy

Source– The post is based on the article “ At the heart of Indo-US ties: Economics & Strategy” published in The Indian Express on 20th june 2023.

Syllabus: GS 2- International Relations

Relevance: Indo-USA relations

News- The article explains the engagements of Indo-USA relationship.

What is the news related to?

Narendra Modi heads to the United States for an official state visit on the invitation of President Joe Biden.

What lies ahead with regard to Economic engagements?

At the heart of the Indo-US strategic partnership is deepening economic engagement and a resolve on both sides to elevate the bilateral relationship to a “global strategic partnership”.

Modi’s visit comes at a time when the value of trade between the two countries has touched a record $191 billion, making the US India’s largest trading partner. For the US, India is the ninth largest trading partner.

American companies have invested around $60 billion in India in sectors ranging from manufacturing to telecommunications and consumer goods to aerospace.

Air India announced the purchase of more than 200 Boeing aircraft — a historic deal that President Biden said would “support over one million American jobs across 44 states”.

What are the Strategic underpinnings associated with the visit?

Central to this cooperation is also the post-pandemic consensus on diversifying and deepening supply chains with trusted countries.

Another strategic engagement is the Quadrilateral Security Dialogue, primarily as a counter to China’s growing influence in the Indian Ocean rim.

The I2U2, a grouping of India, Israel, the US and the United Arab Emirates, is focused on new initiatives in water, energy, transportation, space, health, and food security.

A new US-India initiative on Critical and Emerging Technologies started this january.

The two countries established a partnership to make the semiconductor supply chain more resilient through private sector cooperation.

What are the challenges in India-USA relationship?

The US still has significant export controls on India (instituted after the 1998 nuclear test), which inhibits the free transfer of technology.

Other trade issues that require resolution are visa delays and the revoking of India’s trade benefits under the Generalised System of Preferences (GSP) program in 2019.

India has signed up for three pillars of the Indo Pacific Economic Framework but has opted out of the fourth pillar (trade) citing reservations about the commitments required on environment, labour, digital trade, and public procurement.

There is growing disquiet within sections of the Union government over India not finding an entry into the Minerals Security Partnership (MSP), a US-led partnership to secure supply chains of critical minerals that is aimed at reducing dependency on China.