A Path to the Future
US President Donald Trump’s visit to India from February 24-25 was indicative of continuity in high level bilateral interactions between the two countries. Former Ambassador Anil Wadhwa highlights why this visit was of utmost importance
US President Donald Trump has completed a highly successful maiden visit to India from February 24 to 25, 2020. The First lady of USA, Melania Trump, the President’s daughter Ivanka Trump and son-in-law Jared Kushner accompanied him for the visit, covering Ahmedabad, Agra and New Delhi. This included a hugely successful public event at the Motera Stadium in Ahmedabad, where a capacity crowd turned up to cheer Prime Minister Narendra Modi and President Trump. The US President was impressed by the rousing welcome he received from the large number of people who lined the route between the airport and the stadium and was fulsome in his praise for India and PM Modi, with whom his camaraderie was palpable. President Trump and PM Modi have met frequently over the past eight months, and have developed a friendship and rapport, which prompted President Trump to call PM Modi “an exceptional” and “ a tremendously successful leader”.
Indo-US relations have seen an all-round upswing over the past few years, including trade, investments, defence, counter terrorism, energy, coordination on regional and global issues as well as people to people exchanges. The visit of Indian foreign and defence ministers to USA for the second edition of the 2+2 ministerial dialogue in December 2019 had seen the signature of the Industrial Security Annex (ISA) and three agreements under the Defence Technology and Trade Initiative to secure technology transfer and co-production of critical technologies.
Both countries have moved on to sign key agreements of secure communication and sharing of military logistics like Logistics Exchange Memorandum of Agreement (LEMOA), Communications Compatibility and Security Agreement (COMCASA). It was agreed during the visit to move swiftly towards signing of the Basic Exchange and Cooperation Agreement (BECA) for geospatial cooperation. These agreements open up the possibility of joint operations in the future. However, India as a major defence partner, will look for transfer of technology and co-production with a view to making India a production hub for American equipment. Building on the STA 1 (Strategic Trade Authorisation) status, further legislative adjustments, including amendment of the US Arms Export Control Act, need to be carried out to ensure predictability and reliability of supplies. India will also be keen to move quickly on establishment of Maintenance repair and Overhaul (MRO) facilities in India for American platforms.
Trade was another important item on the agenda. In 2018, the US levied global tariffs of 25 per cent and 10 per cent on steel and aluminium, also affecting India. On June 5, 2019, the US withdrew GSP (Generalized System of Preferences) status accorded to Indian goods, affecting USD 6.3 billion worth of Indian exports. On June 16, 2019, India levied additional duties on 28 American products. The US has been pushing for lower duties and market access for medical devices, information and communications technology goods like smart watches and iPhones, Harley Davidson motor cycles, market access for its dairy products and agricultural commodities like almonds, blueberries, pecan nuts and walnuts. India would like to see its GSP beneficiary status restored, additional duties on steel and aluminium removed and also be able to get market access for its fruits like grapes and mangoes.
The definition of employment and speciality occupations under H1 B visa and its impact on the Indian IT industry is a pending issue and India continues to stress on the importance of the contribution made to the growth and development of the US economy by the highly skilled Indian professionals. During the visit, PM Modi also raised the issue of finalising a totalisation agreement that will benefit Indian professionals working in the US. India’s trade surplus with the US has narrowed down drastically over the last two years, with bilateral trade jumping to USD 142 billion in 2018 mainly due to Indian energy imports from USA.
A delegation from the US Nuclear Energy Institute was in India before President Trump’s visit, to discuss policy support for American nuclear exports to India, besides promoting American products and services to Nuclear Power Corporation of India Ltd and other potential customers. This includes six Westinghouse nuclear reactors, on which negotiations will need to continue. The US-India energy trade has reached USD 20 billion in the last four years alone and will be a new driver in commercial relations between the two countries. The US International Development Finance Corporation has decided to establish a permanent presence, and has announced a USD 600 million financing facility for renewable energy projects in India. President Trump, while addressing a press conference, stated that the two sides had discussed the importance of a secure 5G wireless network and “the need for this emerging technology to be a tool for freedom, progress and prosperity, not to do anything with where it could even be conceived as a conduit for suppression and censorship.”
The two sides agreed to upgrade their relationship to the status of a “Comprehensive Global Strategic Partnership”. In the joint statement, the two leaders came down heavily on the “use of terrorist proxies and strongly condemned cross-border terrorism in all its forms”. They called on Pakistan “to ensure that no territory under its control is used to launch terrorist attacks, and to expeditiously bring to justice the perpetrators of such attacks, including 26/11, Mumbai and Pathankot”. Both sides recognised the importance of connectivity, which they stated should be linked to the respect for “territorial integrity, sovereignty of states, good governance, transparency, and accountability”. The statement recognises India as a net provider of security, as well as developmental and humanitarian assistance in the Indian Ocean region. The sides agreed on a new partnership between USAID, which has announced USD 400 million for the Indo-Pacific, and India’s Development Partnership Administration for cooperation in third countries. They took note of efforts towards a meaningful Code of Conduct in the South China Sea, and urged that it does not prejudice the legitimate rights and interests of all nations according to international law. They looked forward to enhanced Maritime Domain Awareness sharing among the US, India and other partners. The US reiterated support for India’s permanent membership of a reformed UN Security Council and an entry in the Nuclear Suppliers Group. India expressed interest in the “Blue Dot Network” mentioned by the US President, which is a multi-stakeholder initiative, unlike the BRI, which will bring governments, the private sector, and civil society together to promote high quality trusted standards for global infrastructure development.
Both sides can look back with satisfaction on the visit, which was high on optics, but also rich in substance, and has set the path for an even more comprehensive engagement between the US and India in the future.