India-US Relations- Past to Present

Background

• There wasn’t a cordial relationship between India and USA post Indian independence and until the end of the Cold War.
• This was mainly due to US’s inclination to Pakistan and India’s policy of being not alignedwith either the US or the Soviet Union, but maintaining close ties with the latter.
• Even after the Cold War, India and U.S remained estranged.
• During the tenure of the George W. Bush administration, relations between India and the United States were seen to have blossomed, primarily over common concerns regarding growing Islamic extremism, energy security, and climate change.

Important Events

• 1968: India refused to sign the Nuclear Non-proliferation Treaty on the grounds that it is discriminatory.
• 1974: India first tested a nuclear weapon in an underground explosion.
• 1978: S President Jimmy Carter signed the Nuclear Non-Proliferation Act. As a result, the United States ceased exporting nuclear assistance to India.
• 1998: Indian Prime Minister Atal Bihari Vajpayee authorized five underground nuclear tests in response to Pakistan’s test firing of a surface-to-surface missile. This had set India and U.S at a confrontational footing.
• 2005: ‘New Framework for India-U.S. Defense Relations’ signed
• 2006: President Bush and Indian Prime Minister Manmohan Singh issued a joint statement regarding their growing strategic partnership, particularly in regard to their agreement on civil nuclear cooperation.
• 2006: The House of Representatives passed the “Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006,” which established that the United States would cooperate with India on nuclear issues and exempted them from signing the Non-proliferation Treaty.
• 2006: The Senate passed the United States-India Peaceful Atomic Energy Cooperation and U.S. Additional Protocol Implementation Act to exempt from certain requirements of the Atomic Energy Act of 1954 United States exports of nuclear materials, equipment, and technology to India.
• 2006: President Bush signed into law congressional legislation on Indian atomic energy. Among the terms of the agreement:
• India is allowed to stock and reprocess nuclear fuel.
• American companies are able to sell nuclear technology to India.
• India agrees to open some of its nuclear reactors to international inspections.
• July 2007: The bilateral civil nuclear cooperation agreement was finalized
• 2007: The text of the “Agreement for Cooperation between the Government of the United States of America and the Government of India concerning peaceful uses of nuclear energy” (123 Agreement) was released by both countries.
• 2008: The bilateral civil nuclear cooperation agreement was signed
• 2010: India-US Counter-Terrorism Cooperation Initiative was signed
• 2013: U.S. filed a complaint to the WTO arguing that the domestic content requirement imposed under India’s national solar programme is in violation of the global trading rules.
• 2016: Agreements signed to boost bilateral ties in the presence of PM Narendra Modi and US President Barack Obama.
• Memorandum of Understanding (MoU) between the Government of India and the Government of the United States of America to enhance cooperation on Energy Security, Clean Energy and Climate Change
• Technical Arrangement between the Indian Navy and the United States Navy concerning Unclassified Maritime Information Sharing
• August 2016: India and the U.S signed the bilateral Logistics Exchange Memorandum of Agreement (LEMOA). The Agreement would give the militaries of both countries access to each other’s facilities for supplies and repairs.
• September 2016: India lost WTO appeal in U.S Solar Dispute

India-U.S Bilateral Relations

Trade and Investment

• The bilateral economic relation between India and U.S has grown significantly. From a modest $ 5.6 billion in 1990, the bilateral trade in merchandise goods increased to $ 66.9 billion in 2014. As of financial year 2014-15, U.S was India’s second largest trading partner (excluding services and FDI)
• The U.S. serves as India’s top export destination and second-largest source of imports.
• However, in 2016, India was neither a ‘top import country’ nor a ‘top export country’ for any of the U.S. States.
• China gained the place among the ‘top five import countries’ in all U.S.
• According to the US Bureau of Economic Analysis, U.S direct investments in India are estimated at about $28 billion in 2014.
• As per Indian official statistics, the cumulative FDI inflows from the US from April 2000 to September 2014 amounted to about US$ 13.19 billion constituting nearly 6% of the total FDI into India, making the U.S. the sixth largest source of foreign direct investments into India.

Defence Cooperation

• Defence relationship has emerged as a major pillar of India-U.S. strategic partnership with the signing of ‘New Framework for India-U.S. Defense Relations’ in 2005
• This resulted in the intensification in defence trade, joint exercises, personnel exchanges, collaboration and cooperation in maritime security and counter-piracy, and exchanges between each of the three services.
• The Defence Framework Agreement was updated and renewed for another 10 years in June 2015.
• Several bilateral exercises are conducted by India and U.S. The American and Indian militaries have participated in bilateral exercises like Yudh Abhyas, Cope India, Malabar and VajraPrahar. India conducts more military exercises with U.S than any other country.
• The defence trade relationship has been a key element for this cooperation. As of 2009-2013, U.S is second largest defence supplier (7.4%)

Counter-terrorism

• There has been considerable progress in cooperation in counter-terrorism with intelligence sharing, information exchange, operational cooperation, counter-terrorism technology and equipment.
• India-US Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing and capacity building.

Energy and Climate Change

• The U.S.-India Energy Dialogue was launched in May 2005 to promote trade and investment in the energy sector
• It has six working groups: oil & gas, coal, power and energy efficiency, new technologies & renewable energy, civil nuclear co-operation and sustainable development
• Memorandum of Understanding (MoU) between the Government of India and the Government of the United States of America to enhance cooperation on Energy Security, Clean Energy and Climate Change was signed in 2016.