India – U.S. relations in the age of Trump

Context

• India – U.S summit gave positive vibe, with partnership favoring India. New understanding and agreements are on the board.

Talks of Cooperation

• Trump spoke of both countries working together to create jobs and grow their economies and ensuring a trading relationship that is fair and reciprocal.
• More than 166,000 Indian students studied in the United States in 2016, contributing $5 billion in economic activity and supporting some 64,000 American jobs. Over the last decade, Indian students contributed $31 billion to the U.S. economy.
• Trump announced that the U.S. will sign major contracts with India for the sale of natural gas, although he was trying “to get the price up a little bit”.
• The U.S. and India will co-host a Global Entrepreneurship Summit this year in India, focused on supporting women entrepreneurs, and geared toward solving 21st century challenges and improving lives.
• A charter of demands on India to open its markets much more to American agricultural commodities, reduce regulatory barriers and strengthen intellectual property protection.

Security Agreements discussed at Washington

• Trump expressed the joint determination of both countries to destroy “radical Islamic terrorism” as also to enhance military cooperation.
• The forthcoming ‘Malabar’ naval exercise involving the Indian, American and Japanese navies will help achieve it.
• U.S praised for India’s joining in sanctions against the North Korean regime, as it was causing “tremendous problem.”
• There is clear messaging to China in the call for respecting sovereignty and international law, with a distinct echo of the Indian position on China’s Belt and Road Initiative.
• The mounting percentage of U.S.-bought equipment with the Indian armed forces is a concrete possibility.
• The offer of sale of Sea Guardian Unmanned Aerial Systems to India was confirmed and this will provide for an enhancement of Indian capabilities in maritime defense and deterrence.
• India’s offer of support for U.S. observer status in the Indian Ocean Naval Symposium was flagged.
• The United States-India Defense Technology and Trade Initiative (DTTI) remains the premier forum for deepening alliance on defense co-development and co-production.
• The United States and India also participate in the VAJRA PRAHAR Special Forces exercise, the RED FLAG air force exercise, and YUDH ABHYAS army exercise

Counter-terrorism planned

• The naming of Hizbul Mujahideen’s Syed Salahuddin by the U.S. State Department as a Specially Designated Global Terrorist was a step towards countering terrorism.
• Launch of a new consultative mechanism on domestic and international terrorist listing proposals was a definite boost.
• The call on Pakistan to “expeditiously bring to justice the perpetrators” of the Mumbai and Pathankot terror attacks was reiterated.
• The expansion of intelligence-sharing and operational-level counterterrorism cooperation signals greater mutual confidence about working to eliminate terrorist threats.

New Economic Agreements discussed

• In 2017, Indian airline Spice-Jet declared the order of 100 new Boeing 737MAX-8s, generating and sustaining 130,000 American jobs in the state of Washington and elsewhere.
• The U.S. Bureau of Economic Analysis reports that Indian companies have invested over $11 billion in the United States economy, creating and sustaining more than 52,000 jobs.
• Capital Markets.The Department of Treasury and Indian Ministry of Finance continue to endure unsettled tax disputes.
• Enhanced technical cooperation includes areas such as the development of India’s municipal bond market. The just-completed issuance of a municipal bond for the city of Pune was India’s first municipal issuance since 2011.

Upcoming Energy partnership

• Liquefied Natural Gas Exports and Investment. Indian energy companies have signed more than $30 billion in long-term contracts for U.S.-produced liquefied natural gas (LNG), including from Louisiana and Maryland.
• Nuclear Power. The United States and India are committed to realizing commercial civil nuclear cooperation, in particular through a contract for six Westinghouse Electric AP-1000 nuclear reactors to be built in Andhra Pradesh, India. Once completed, the project will provide reliable electricity for millions of Indian citizens.
• Fossil Energy. In the fall of 2017, The U.S. Trade and Development Agency will host a Refineries Performance Optimization Reverse Trade Mission, familiarizing senior executives from Indian refining companies with U.S. technologies that can optimize the performance of India’s oil refineries.
• Grid Expansion and Modernization. The Department of Commerce of U.S. will lead a Smart Grid and Energy Storage Business Development Mission to New Delhi, Hyderabad, and Mumbai in March 2018 to showcase
• U.S. technologies and services that can benefit India address its grid modernization needs.
• The two countries also announced the Smart Grid and Energy Storage consortia under the U.S.-India Joint Clean Energy and Research Development Center.

• Energy Finance. The U.S.-India Clean Energy Finance Task Force is delivering recommendations to mobilize U.S. technology exports and American and Indian private investment in India’s $1.2 trillion power market.

 Conclusion

• While the two leaders were able to establish a common understanding of global issues, the joint statement indicates that many bilateral issues are yet to be resolved.
• The insertion of an entire section titled “Increasing Free and Fair Trade” is a veiled attempt at putting the Trump administration’s concerns on bilateral trade on the front burner.
• While these bilateral issues were articulated, others were not brought up, including India’s concerns on the immigration process and H1B visa curbs, and Mr. Trump’s withdrawal from the Paris climate accord, which will leave India’s climate change financing handicapped.
• It is to be hoped that these will be raised in the near future. All things considered, a good beginning appears to have been made during Mr. Modi’s maiden meeting with Mr. Trump. It is now for them to tackle the more substantive bilateral issues.
  

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