US Secretary of State John Kerry, US Vice President Joe Biden and India’s Prime Minister Narendra Modi in September 2014. Photo Credit: Screenshot State Dept video
The United States should reset expectations in line with India’s preferences for continuity, reformation, and new equilibria.
By Kashish Parpiani and Sukanya Sen*
During his confirmation hearing, US Secretary of State Antony Blinken deemed India to have been “a bipartisan success story of our successive administrations.” In affirming the Joe Biden administration’s commitment to advancing the relationship, Blinken deemed Biden’s time in the US Senate to have been pivotal in the US’ strategic courtship of India. Blinken credited Biden’s early vision, by recounting his aim to have India and the US become the “two closest nations in the world” by 2020. Blinken however, noted: ”Well, we’re not quite there, but it’s a terrific vision.”
Such assessments that underscore the unrealised potential of US-India ties no longer invite surprise, particularly after four years of the Donald Trump administration exercising blatant transactionalism and breaking the precedent of incremental gains (particularly on trade issues). Although to a degree, the criticism does stand warranted owing to the vast scope of the US-India dynamic, there is also a concurrent need for the US to alter its expectations in line with India’s priorities, limitations, and multiple strategic alignments.
Continuing Trump’s focus on convergence-based institutionalisation
Although the push for definite frameworks and standardised communication channels began under the Barack Obama administration, the Trump dispensation exercised continuity on institutionalising US-India ties by setting frameworks in a manner that maximised convergences. A key example being, the India-US 2+2 ministerial dialogue between the countries’ foreign and defence ministers, which replaced the India-US Strategic and Commercial dialogue between the countries’ foreign and commerce ministers. In doing so, the near-unhindered progression of defence ties was ensured, even amidst repeated stalemates between US-India trade negotiators.
Furthermore, after just three iterations of the 2+2 dialogue, India and the US locked-in considerable gains like enhanced cooperation between the US Naval Forces Central Command and the Indian Navy, finalisation of two more interoperability agreements, and paving the way for the actualisation of the US-India Defence Technology and Trade Initiative. With speculations now abound over Biden possibly reverting to the Obama-era format by reinstating the Strategic and Commercial dialogue, there is a need to recognise India’s prioritisation of unhindered defence cooperation.
Similarly, deepening energy ties was another avenue that witnessed convergence-based institutionalisation under Trump. With energy trade being a key US approach to reduce its trade deficit with India, and India looking to diversify its “energy import basket beyond OPEC nations”, the 2018 US-India Strategic Energy Partnership (SEP) espoused an “all-of-the-above approach”. Some noteworthy outcomes of the same were, the US’ rise as the sixth largest crude oil supplier to India, bilateral hydrocarbon trade crossing US$ 9.2 billion, and an accelerated adoption of technological and private sector innovation to further clean energy access in India.
Harnessing this momentum, the Biden administration can find similar convergences by bolstering the features of the SEP even as it pursues a “climate first” policy agenda. For instance, the two sides can formalise a climate action forum under the aegis of the SEP. Broader government action on climate change, that expands climate-oriented priorities to trade, national security and diplomacy can lend a common approach towards a more sustainable future. At the same time, doing so under the ambit of SEP would ensure that Biden’s clean energy approach will stand slightly tempered in view of India’s continued geopolitical interest in stockpiling crude oil in American strategic reserves as well as its complex path in managing its own transition, which may require boosting industrial growth and protecting jobs of stakeholders.
Instituting civility on trade and accepting the common focus on domestic production
While Trump’s focus on trade fueled unusual tensions, Biden’s “America is Back” reengagement strategy encompasses a critical point of continuity. Mirroring ‘America First’ inclinations, a similar economic trend is apparent with Biden’s own focus on sharpening America’s domestic economic interests to ultimately benefit the middle class. Similarly, India’s clarion call for an “Atmanirbhar Bharat”, which seeks to enhance India’s “capacity, capability, and reliability to strengthen the global supply chain”, is also inclined towards consolidating local supply chains and raising tariffs on electronic, agriculture, and solar imports.
Under these circumstances, the US-India trade relationship is undoubtedly entering a period of uncertainty, with Biden unlikely to forge any new trade deals in the near-term, and his administration’s intent to conduct “a fresh review” of the limited US-India trade deal that Trump failed to finalise.
Moreover, under Trump, US trade tensions with India prolonged primarily due to either sides approaching negotiations from divergent standpoints, as New Delhi sought to diffuse tensions by addressing the broader trade imbalance, and Washington sought the redressal of long-standing apprehensions over Indian tariff and non-tariff market-access barriers. Whereas under Biden, the common focus on enhancing domestic production can be deterred from feeding new tensions. For instance, in recognising their inherent strengths in the sectors of pharmaceuticals and high-end medical devices, India and the US can cooperate on strengthening each other’s supply chain resilience, avoid the pitfalls of protectionism, and thereby reduce their dependence on China.
Additionally, in moving away from the Trump administration’s inclination to interlink issues (like its momentary consideration of limiting H-1B visas for nations that insist on data-localisation) or its penchant for escalation (as with the reported threats of a full-blown Section 301 investigation), US-India trade ties warrant the establishment of a permanent, consultative platform. This could either be in terms of Biden reconvening the Trade Policy Forum, or the establishment of an alternate framework which also recognises the strategic relevance of US-India trade. The latter could include a multi-stakeholder dialogue of the US Trade Representative, US Secretary of State, and US Secretary of Commerce with their respective Indian counterparts. The inclusion of either side’s foreign ministers could be useful in acknowledging strategic considerations like the relevance of India’s GSP status in helping US manufacturers reduce their dependencies on China.
Recognising India’s multiple strategic alignments
Over the past four years, as India integrated itself into the eastward security calculus of the Indo-Pacific, it did not always do so in partnership with the US. However, this has not meant a decline in US support towards India’s emergence as a security provider in Indian Ocean. In fact, India’s fleet of US-made P-8 maritime surveillance aircraft for instance, serves as the backbone of the Information Fusion Centre-Indian Ocean Region — New Delhi’s flagship initiative to present itself as a hub for maritime domain awareness in the Indian Ocean.
However, on conducting joint patrols in the Indian Ocean, India opted to partner with France and not the US, despite repeated offers from “several senior US military officers”. Given France’s “resident power” status in the Indian Ocean, wherein its overseas territories render the region to be “a matter of sovereignty even for Paris”, India identified a more conducive partner. Similarly, to burden-share the responsibility of securing the region, the India-France-Australia trilateral has swiftly enacted agreements for reciprocal access to each other’s outposts (Andaman and Nicobar islands, Reunion island, and Cocos island) in the Indian Ocean.
On the continued spectre of US secondary sanctions under CAATSA, owing to New Delhi’s purchase of the S-400 missile system, there is an expectation that the Biden administration will accord India with a waiver under Section 231(d) exemption provisions. Alternatively, at the very least, India would seek continuity on the Trump administration’s precedent of deferring the prospect of sanctions in view of New Delhi’s rising import of US arms. Reduced attention to India’s ties with Russia can also be strategically relevant for the US, with recent India-Japan efforts to dampen Russian apprehensions over the Indo-Pacific.
Similarly, greater reprieve on New Delhi’s ties with Tehran could accord a fillip to India’s strategic investment in Iran. Although India’s investments in the Chabahar port for instance, has been outside the purview of US sanctions, only a significant departure from the Trump-era “maximum pressure” policy against Iran will fully unlock the port’s strategic potential towards the joint US-India aim of facilitating land-locked Afghanistan’s trade potential.
Hence, in the Biden administration’s aim to actualise the unrealised potential of US-India ties, it would be prudent for the US to adapt its expectations to Indian predispositions over its prioritisation of defence ties, constraints on commercial avenues, and management of multiple strategic alignments.
Observer Research Foundation
ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.