The Pulse

What to Expect from US-India Relations in 2016

Recent Features

The Pulse

What to Expect from US-India Relations in 2016

U.S.-India ties are heading in the right direction, according to India’s former Foreign Secretary Kanwal Sibal.

What to Expect from US-India Relations in 2016
Credit: Flickr/IANS/RB

India-U.S. ties have been transformed in recent years, best exemplified with the newly declared global strategic partnership between the two countries. Yet, what is the reality of the partnership in terms of achievements on the ground? And, what could be the future expectations?

For starters, the United States’ Pakistan policy remains a problematic issue. The objective of the two countries to advance regional security together is impeded by the continuation of U.S. military aid to Pakistan. This is done through presidential waivers to overcome the provisions of the Kerry-Lugar legislation, which requires Pakistan to act verifiably against terrorist groups on its soil before U.S. aid can be released.

Furthermore, the United States does not consider the Taliban as a terrorist organization. The U.S. is, in reality, engaged in an effort to accommodate the Taliban politically in Afghanistan in a Pakistan-brokered deal, which is a risk to India’s security. It is thus difficult to see how, in these circumstances, the counter-terrorism partnership between India and the U.S. can be a defining one for the 21st century.

U.S. President Barack Obama’s affirmation in 2010 that “the United States looks forward to a reformed UN Security Council that includes India as a permanent member” was viewed as a major evolution in the U.S. position. Yet up to now, the United States has not clearly defined its position on the expansion of the United Nations Security Council, due to the fact that U.S. openness to India’s hope for permanent membership on the council remains at a declaratory stage.

Similarly, while past joint U.S.-India statements have repeatedly spoken about India’s membership in the four export control regimes, and, India has been declared ready for Missile Technology Control Regime (MTCR) as well as Nuclear Supplier Group (NSG) membership, so far no tangible progress has occurred. Breakthrough understandings at the governmental level on national tracking and liability issues have removed political roadblocks in the way of civilian nuclear cooperation.

However it is now time for U.S. companies to take the call, as the larger question of the commercial viability of U.S. supplied nuclear reactors remains. With India ratifying the Convention on Supplementary Compensation, an international nuclear liability regime governed by the International Atomic Energy Agency, it appears that the decks have been cleared for progress within a year on the project to supply six Westinghouse nuclear reactors to India. Nevertheless General Electric, another supplier, continues to hold out. Without a strong U.S. leadership role, progress is unlikely to come soon.

In the past, the United States had virtually no defense ties with India. Today, apart from a renewed Defense Framework Agreement, the U.S. has become a large supplier of defense equipment to India, and even the biggest in the last few years, with contracts worth almost $13 billion. In addition, the largest number Indian joint military exercises are with the United States.

Robust language has appeared in joint India-U.S. statements in 2013, 2014, and 2015 on defense cooperation. However, so far, less than expected progress has been made in the area of defense manufacturing under the so-called Defense Technology and Trade Initiative (DTTI). During Obama’s visit to India, four “pathfinder” projects under the DTTI rubric involving relatively minor technologies were announced. Contacts between the two sides under this U.S. initiative continue.  Two other projects of note, one on aircraft carrier technology and the other on jet engine technology, are also under discussion.

U.S.-China tensions are growing, and, India too has longstanding disputes with China. The 2015 U.S.-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region specifically addresses maritime territorial disputes involving China and, among other things, affirmed the importance of safeguarding maritime security and ensuring freedom of navigation and freedom of the air throughout the region, especially in the South China Sea.

U.S. trade and financial relations with China are vast; India too seeks stable and economically productive ties with China. India has the difficult task ahead of managing the China threat by both engaging closely with the United States and reaching out to China. At the same time, the credibility of the U.S. rebalance to Asia and the Pacific is yet to be tested.

As part of closer India-U.S. understandings on the Indo-Pacific region, India and the United States have decided to include Japan in the bilateral India-U.S. Malabar naval exercises. The trilateral India-U.S.-Japan political dialogue has also been raised from the official to Ministerial level.

However, India’s problems with China are principally related to ongoing border disputes arising from a boundary disagreement and Beijing’s deepening relationship with Islamabad. In both cases, India cannot count on the United State to take a position supportive of India. This points to the limits of the strategic partnership, as such a partnership falls short of supporting India’s territorial sovereignty.

When it comes to deepening bilateral economic relations between the two countries, progress has been mixed. For one thing, U.S. businesses remain reluctant to invest in India because of their beliefs that the Indian government has not yet delivered on promises to ease doing business in India including taxation issues, and implement general economic reforms in the country.

Nevertheless, the IT sector has brought the knowledge economies of India and the United States closer together and it constitutes the strongest link Washington has with the drivers of India’s modernization and innovation. However, the United States is unfortunately targeting this sector with higher visa costs and increased restrictions.

What is the way forward when it comes to bilateral economic relations?

Among other things, the India-U.S. collaborative economic agenda should include co-production and co-development of defense products under the Make in India program, coal gasification technologies, and the issuance of a non-FTA country waiver in order for India to gain access to U.S. fossil fuel reserves.

The bilateral economic agenda should also extend to partnerships in the area of agricultural technology, the civil aviation sector, life sciences, infrastructure financing, and green financing, among others. Bilateral dialogues should also address visa issues in the IT/ITES (i.e. outsourcing services) sectors, focus on exporting synergies in the biotech and pharmaceutical sectors, and find means to support university and other skill development exchanges.

The India-U.S. relationship is being increasingly consolidated. However, like in any such relationship — especially between the world’s foremost political, military, economic and technological power and a large developing country advanced in certain sectors of the knowledge economy, but beset with serious problems of poverty as well as at unequal stages of development internally —  differences are normal.

Much work lies ahead to make the India-U.S. relationship a “defining one” in the 21st century, but we are headed in the right direction.

Dr. Kanwal Sibal joined the Indian Foreign Service in July 1966, eventually serving as the Foreign Secretary of India from July 2002 to November 2003. Dr. Sibal served as Ambassador of India to Egypt, France, and Turkey. This article has previously been published on the EastWest Institute Policy Innovation Blog