The Fine Print in the Indo-US Pact

Context

The latest agreement between India and the US, the iCET, is a follow-up to the declaration made by the two leaders during the third Quad Leaders’ Summit, which took place in May 2022.

Relevance

GS Paper-2: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora

Mains Question

The time has come for India to regain its “strategic autonomy” and independence from Russia in international affairs. Examine the statement in depth. (250 words)

Critical and Emerging Technologies Initiative (iCET)

• The iCET is a project that the national security councils of the two nations will lead to increase cooperation in critical and emerging technologies.
• The iCET envisions a “innovation bridge” with India by joining six of India’s Technology Innovation Hubs to support at least 25 joint research projects in fields like AI and data science and apply their findings to areas like agriculture, health, and cl
• This is especially true for the Indo-Pacific than other regions where one of the most intense competitive one-upmanships is likely to play out with China’s rapid advancements in the field and the US determined to maintain a significant tech gap with Chin.

Do You Know?

• US-India bilateral trade reached USD 119.42 billion in 2021–2022 compared to USD 80.51 billion in 2020–21.
• In 2021–22, exports to the US increased to USD 76.11 billion from USD 51.62 billion, while imports increased to USD 43.31 billion from USD 29 billion in the previous fiscal year.
• One of the few nations with which India enjoys a trade surplus is America.
• India’s trade surplus with the US in 2021–22 was $32.8 billion.
• Since at least the 2000s, Russia has been India’s top choice for defence purchases.
• The year 2021 was an exception, when France took the place of Russia as India’s main supplier.
• Despite this deviation, over 46% of India’s defence requirements were met by Russia in the previous five years.

Problem with India-Russia Defense Deals:

• Acquired only the “knowhow”: Indian engineers and designers only acquired the “knowhow” of methods and procedures needed for putting together or constructing aircraft, aero engines, and armoured vehicles from parts or material supplied.
  • We didn’t ask for or receive from the Soviets/Russians the “know-what” and “know-why” pertaining to the rules and regulations that would have allowed us to create and construct our own weapon systems. o India has remained one of the top arms importers in the world. Because of this oversight or omission, India has continued to be one of the world’s top importers of weapons, purchasing from other countries rifles, machine guns, battle tanks, fighters, and prime movers like diesel and aero engines and nuclear reactors.

Challenges to Come:

1. Clearance Issue: o Although the private sector may be the owner of technology in the US, the US Arms Export Control Act imposes restrictions on the recipient state in addition to requiring clearances from the Departments of State and Defense for (Transfer of Technology)ToT.
2. Strong Resistance From Russia: Weaning India off its reliance on Russian military hardware is undoubtedly an unstated but significant long-term goal of the iCET.
   1. Moscow and domestic opponents are both likely to oppose this vigorously on a number of different grounds, but the national interest must win out.
3. US industry is still firmly focused on trade, despite the fact that India is in desperate need of technology.
4. India will therefore need to use its sizeable purchases in the energy, nuclear, civil aviation, and other sectors in a comprehensive way to leverage US technology.

The Future of Trade Relations Between India and the US:

• India and the US should concentrate on reducing non-tariff barriers (NTBs) that businesses in both countries encounter.
• The two parties should identify and reduce the various NTBs that businesses might encounter, such as sanitary and phytosanitary requirements, technical obstacles, economic needs tests, and onerous registration requirements.
• The US government might think about reinstating the Generalized System of Preference (GSP) benefits for Indian exporters because the removal only benefited other GSP recipients, and reinstating them might even help US businesses that use the products as cheap inputs.
• The two parties could try to comprehend, through discussions at the Trade Policy Forum, how investment rules could be made more appealing in order to increase the flow of investments and collaborations.

Conclusion

• Over the past 60 years, neither the quality of Soviet/Russian hardware nor the product support has ever been able to compete with that of their western counterparts, and the disruption brought on by the conflict between Russia and Ukraine has made matters worse.
  • The time has come for India to reclaim its “strategic autonomy” in world affairs by severing its ties with Russia.
• To simply switch from Russian to American military hardware, however, would be to “jump from the frying pan into the fire.” Our ultimate goal must continue to be Atmanirbharta.