Treasury Secretary Janet Yellen’s recent visit to India demonstrates the United States’ renewed emphasis on strengthening economic ties with Asia’s third-largest economy and ‘one of America’s indispensable partners.’
The need for India and the United States to strengthen their bilateral relations
- Security: Combat terrorism and weapons of mass destruction; safeguard global commons such as sea routes and communication lanes.
- For example, India has raised the Taiwan issue publicly for the first time, while the United States has been passing through the South China Sea and the Taiwan Strait to protect freedom of navigation at sea.
- Global cooperation: International cooperation through platforms such as the UN, ASEAN, the G-20, the IMF, and the Quad. To counter China’s dominance in the region, the Quad Security Dialogue has been launched.
- Defense cooperation: Every year, bilateral military exercises such as Yudh Abhyaas, Vajra Prahar, and others are held in accordance with agreements such as LEMOA, COMCASA, Industrial Security Agreement, and BECA.
- Space cooperation: An agreement between India and the United States on science and technology cooperation; a joint microwave remote sensing satellite called NISAR.
- Diaspora and people-to-people ties: The Indian diaspora in the United States numbers around 4.5 million people, accounting for about 1% of the population. The Indian diaspora is recognised as a source and agent of soft power, an effective public diplomacy tool, and for its work ethos, discipline, non-interference, and peaceful coexistence with the locals.
Divergences and areas of friction
- Tariff war: Both countries have been engaged in a tariff war since 2018. For example, in 2018, the United States imposed additional tariffs of 25% on steel imports and 10% on aluminium imports from a variety of countries, including India. The refusal of India to remove the 20% tariffs on ICT products caused the trade agreement between India and the United States to be delayed, and it is still pending.
- WTO disagreements: India The United States is involved in WTO disputes over issues such as India’s capping of medical device prices, increased Indian market access for American agricultural and dairy products, and so on.
- Intellectual Property Rights: India is also on the United States’ “Priority Watch List,” which identifies countries that pose a threat to American intellectual property rights. In addition, the US wants India to strengthen patent regulations and remove barriers to American companies investing in India.
- Tensions between the United States and Iran and Russia: Imposing unilateral restrictions on Russian and Iranian imports into India through CAATSA would have an impact on India’s relations with Iran and Russia, both of which India has a strong stake in.
- Divergence of interests in Afghanistan: The United States left Afghanistan in the aftermath of the Afghan Peace Treaty. Decades of work were abandoned when the Taliban took over, and people’s freedom and the development work done by India were jeopardised.
Despite differences in some areas, the upward trajectory of India-US relations indicates a greater nuance to the need for bilateral institutionalisation — towards not only graduating the bilateral dynamic away from over-reliance on chemistry between top political leadership, but also designing frameworks in a manner that maximises convergences between the two countries.