India-US : Overview

Why India-US relationship is booming?

  • India’s Act East policy and the USA’s rebalance to Asia compliments each other.
  • Both see China as a potential rival in coming years
  • Both have strong commitment to ideal like Democracy, Secularism, Anti-Terrorism etc.
  • Indian Origin people in USA are a strong lobby now both economically and by their voter base.
What are some of the recent developments in this relationship?
  1. Defence cooperation has improved
  2. US is India’s second largest trade partner for goods and by far its largest export market.
  3. Multiple dialogue platform regarding trade have been revived during the past year like Trade Policy forum, CEOs Forum
  4. US-India Infrastructure Collaboration Platform has been envisaged to assist US companies explore infrastructure opportunities in India.
  5. Smart City – Allahabad, Ajmer, Vishakhapatnam
  6. US to give India back stolen artefacts including a Chola era Ganesha idol
  7. India approved two major defence deals worth $3billion for purchase of Apache and Chinook choppers.
  8. Creation of a $20 million U.S.-India Clean Energy Finance initiative and a $40 million U.S.-India Catalytic Solar Finance Program, with equal financial contribution from the two countries
  9. an announcement that the U.S. recognises India as a “major defence partner”
What are some of the failures/issues?
  1. Failure to operationalise nuclear deal
  2. USA’s  continuing support for Pakistan
What role are US MNCs playing in this relationship?
  1. Qualcomm: $150 million India-specific Venture Fund formed exclusively to fuel innovation and foster promising Indian startups that were contributing to the mobile and IoT ecosystem.
  2. Google – wi-fi at 500 stations
  3. Microsoft – broadband to villages
Evidence of India’s soft stance vis-a-vis USA:
  • India agreed to negotiate the reduction of hydrofluorocarbons (HFCs)  under the Montreal Protocol  and
  • India also agreed for airplane emissions under the International Civil Aviation Organisation Assembly (ICAO)
Highlight the importance of United States to the Indian growth story. What are the irritants in the relationship between two countries? Comment on them. (200 Words)
Globalization and rise of china has inevitably led to good relations between US and India. In the present context of India’s desire to eliminate poverty, economic betterment and entry to the united nations security council hinges largely upon it’s relation with the US.
  • Energy security-India’s focus on renewable energy and nuclear energy largely depends on technology transfer and investments from US companies.
  • Trade Relations-India’s hopes of reviving it’s manufacturing industry through ‘Make in India’ depends upon the US investment. India’s agriculture sector and food processing industry has a lot to learn from and co-operate its American counterparts
  • People to People relations-Better relations will lead to cross border flow of information and ideas that will help India in developing its knowledge economy
  • Huge remittances from US help India reduce its CAD therefore assumes high importance
  • Threat of terrorism to both the countries have led to better co-operation between the two countries in ensuring internal security
Major Irritants
  • India’s solar policy which stipulates that the equipment to be used should be indigenous is also a bone of contention between the two nations as US feels this policy to fillip ‘make in India’ campaign is against its companies and has challenged this policy at WTO.
  • Visa Issues-Stringent regulations on Indian emigrants has been a bone of contention
  • IPR regulations-India’s insistence on availability and affordability of drugs and US pharma companies allegations of violations of IPR rules has led to reluctance of US pharma companies to invest in R&D.
  • Unilateralism and military intervention in West Asia by the USA has been antithetical to Indian diplomacy. The USA needs to be sensitized better regarding Indian concerns in West Asia and the need to handle them better.
  • Trade issues continue to be an irritant. Fights at WTO regarding visa issues, poultry bans and solar subsidies, and Trade Facilitation Agreement (TFA) are major issues of divergence. These can be solved only through active diplomacy and drafting more commercial attaches in US desks in the MEA.
  • The Bilateral Investment Treaty is far from conclusion. India’s refusal to include MFN clause, taxation issues and Compulsory Licensing as well as requiring US firms to arbitrate in India for 5 years before resorting to international laws are important divergences. Separating non-negotiable areas such as Compulsory Licensing, from others and seeking to bridge the gap on them can help early resolution.
  • India and USA are in opposite camps on environment and climate change negotiations. The Paris Summit has although included India’s thrust on CBDR, it has dropped historic responsibility. There is less chance of convergence on these issues
  • Arms supply to Pakistan by the USA, including the recently approved F-16s continue to irk India. This requires some straight talking by Indian diplomats as well as some fine lobbying by Indian groups on a consistent basis to drive home the point that these arms end up in hands of terrorists and can be used to threaten India.
  • Finally, eagerness of US to draw India into a military partnership in Asia to contain China requires a tight rope walk.
Related Questions:
  • “The US sees India as a “swing state” that can help it to tilt the global strategic balance against China and Russia.” Critically comment. (200 Words)



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