Relevance: GS-2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests; Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora

Key Phrases: CAATSA, 2+2 Ministerial Dialogue, Generalised System of Preferences, S-400 Triumf long-range missiles

Context

• China’s push to become an economic giant has brought the US closer to India. Rising Chinese influence has been a cause of concern for both India and the US. Thus, the need has arisen to look at India-US ties in a detailed manner.

Historical Background

• In ancient times economy of the world was dominated by India and China. The reason behind it was not limited to a huge population; rather it was driven by scientific innovation and technological prowess.
• The advent of the Industrial Revolution enabled Great Britain to march over Asia and soon the British along with other European powers were able to colonize a large part of the globe.
• The Second World War changed the power dynamics of the world and the US emerged as a leader in the West. Soon it became a preferred destination for high quality human capital migrating out of Asia. On the other hand, despite the glorious past of India, its economy during modern period changed to import dependent from export-led in the past. During British rule itself, India’s share of the world economy declined from 24.4% in 1700 down to around 4.2% in 1947.

Post-Independence India vis-à-vis China

• Both India and China started their journey almost at the same time in the late 1940s. Over the period of time, China has emerged as a manufacturing led and technology driven economy, competing head-on with the US in areas such as biotech, robotics, artificial intelligence and advanced material. But, being a communist country, China is often criticized for violation of human rights and civil liberties.
• India, on the other hand, has emerged as largest democracy but faced an economic set back in the late 1980s. LPG reforms in the 1990s opened India’s market for foreign players. Since then India has been consistent in its commitment and policy action focused on building domestic capabilities in critical technologies as well as in key manufacturing industries and pursuing important structural economic reforms.

India US relations

• Both India and the USA are well established republics with deep democratic cultures. It makes them natural allies to confront the challenges posed by an expansionist and aggressive China in the Indo Pacific and beyond.
• Cooperation between India and US in areas like national security, defense production, information technologies and internet industries.
• A closer India-US cooperation in scientific research and critical emerging technologies was seen in the recently concluded India-US 2+2 Ministerial Dialogue.

India-US: Areas of cooperation

• Political Domain: India-
  • US 2+2 Ministerial dialogue led by the Foreign and Defense Ministers of India and US,
  • G20 Summits and Quad grouping of India and US along with Japan and Australia.
• Cyber Security:
  • Signing of Cyber Framework in 2016, India-US Cyber Security Dialogue,
  • cooperation in the field of Artificial Intelligence and
  • countering cyber warfare.
• Counter Terrorism:
  • Intelligence sharing, operation cooperation and information exchange.
  • Cooperating in designations of global terrorists and entities.
• Defense:
  • Defense trade (more than $ 15 billion), joint exercises (such as YudhAbhyas, Malabar Exercise), personnel exchanges, cooperation in maritime security and counter piracy.
  • Four agreements – GSOMIA, LEMOA, COMCASA and BECA - covering areas of Military Information, Logistics exchange, compatibility, and security.
• Economy and Trade:
  • US is India’s largest export destination ($51.62 billion) and second largest trading partner with a trade deficit of about $23 billion for the US.
  • Pharmaceuticals, machinery, electronics, clothing, vehicles etc. are the traded items.
• Climate Change:
  • US is a key partner for India in the field of energy.
  • Initiatives such as PACE (Partnership to Advance Clean Energy), cooperation and dialogue on climate change at international level.
• Science and Technology:
  • ISRO and NASA are also working towards intensifying cooperation in Mars exploration, heliophysics, and human spaceflight, cooperation in earth observation, satellite navigation, and space science and exploration.
• Education:
  • More than 200,000 Indian students are pursuing various courses in the US which havebecome the mostfavored destinations of Indian students.
• International platforms:
  • US has extended its support for India’s membership to the UN Security Council and the Nuclear Suppliers Group.
  • The US has supported India’s cause and concerns w.r.t. Chinese influence in the region.
• Cultural cooperation:
  • Indians and Indian origin Americans constitute 1% of the total U.S. population (14 million).
  • It includes a large number of professionals, entrepreneurs and educationists with considerable and increasing influence in U.S. politics, economy and society.
  • It adds to the rising soft power and influence of India in the global world.

India-US: Bone of contention

• Withdrawal of GSP:
  • Generalized System of Preferences were the special privileges enjoyed by India. Indian exports such as textiles and engineering goods were duty free to American markets.
• H1B Visas:
  • US has put a cap on H1B visas putting restrictions on work visas for Indians moving to US.
• Data localisation move of India:
  • US being host of big data giants such as Google, Facebook generating huge amount of data from Indian consumers, it has raised the issue of personal data protection.
  • India is in the process of implementing a Data Localisation rule which is being opposed by the US.
• India’s closeness to Russia:
  • India’s decision to buy S-400 Triumf long-range missiles from Russia, worth $5.4 billion, has emerged as a major cause of irritation in India-US relations.
• Other Issues:
  • US has accused India for Intellectual Property Rights (IPR) violations and has put India on ‘Priority Watch List’. It has caused bone of contention between the two.

Way Forward

• The US has moved a step ahead by providing India with a specific exemption under Countering America’s Adversaries Through Sanctions Act (CAATSA). It will help India continue its cooperation with Russia which is India’s old and time-tested partner.
• It is in the mutual interest for both India and USA to rise above differences and ensure continuous cooperation to establish a peaceful, progressive and multilateral world.

Sources: Indian Express  MEA-Gov-in  

Mains Question:

Q. India and the US are natural allies. Discuss. (250 Words).