US and India are considered to be ‘natural’ strategic partners, irrespective of which government comes to power in both these countries. In the past two years, bilateral ties have deepened in an unprecedented manner, but a plethora of issues still remain unresolved.
With the US set to see another change of guard, it remains to be seen whether the bonhomie between Prime Minister Narendra Modi and US President Barack Obama will be sustained if Republican candidate Donald Trump or Democratic Party nominee Hillary Clinton become US President
Although the relationship between India and the US seemed to have gathered momentum in the last leg of the Obama administration, the Modi-led government had only taken forward issues that were decided in the previous regime.
The US had been pushing India to sign the Logistics Exchange Memorandum of Agreement (LEMOA), a refurbished version of their Logistics Support Agreement for over a decade. However, this was signed in August this year, while the other two pacts — Communications and Information Security Memorandum of Agreement (CISMOA) and Basic Exchange and Cooperation Agreement for Geospatial Information and Services Cooperation (BECA) – are under negotiation.
“Bolstering defence ties with India will continue to be a priority even with the new American President. Exports have been rising consistently and they would not like to lose their market share,” a former ambassador to the US told BusinessLine on condition of anonymity.
Under the Defence Technology and Trade Initiative (DTTI) between the two countries, 20 projects are pending. The US is also keen to build fighter jets in India through their defence conglomerates – Lockheed Martin and Boeing.
Economic issues India has to a lot to settle with the US on the economic front, the most prominent being the conclusion of the Bilateral Investment Treaty (BIT) that is in a state of deadlock. During the recently-concluded US-India Trade Policy Forum, US has made it clear to India that big ticket investments from America will flow into the country if BIT is signed now.
Both sides have vowed to scale up trade in goods and services up to $500 billion from $105 billion at present. However, a series of trade disputes under the World Trade Organization (WTO) are playing spoilers.
India recently lost a couple of trade disputes concerning poultry imports and solar panels against the US. Also, the US has been threatening India with trade penalties if it does not clarify rules on import of poultry products from US.
“The US-India partnership is deeper and broader than ever before and given the growing importance of India as the world’s fastest growing economy, it is critical that the next administration continue the work on BIT, free movement of professionals and executing a totalisation agreement,” said Mukesh Aghi, President, US-India Business Council.
The Modi government has not been much successful in clinching the totalisation agreement. The pact allows Indian workers on temporary work visas to receive old-age insurance benefits for their contributions to the US social security system.
In past two years, Modi and Obama have had more than five bilateral meetings. However, economic issues between the two are far from being over.
Visa concerns Ironically enough, the closeness between both leaders has not cut much ice in ironing out India’s visa concerns. The US government has major plans to overhaul their archaic visa regulations. And India, which consumes almost 60 per cent of the H-1B visas, is likely to be adversely impacted. “Visa will be a tricky call that the new administration will have to take. This is because the issue is linked with employment. But I believe, nothing dramatic will happen immediately. The priority areas for the new US government, as far as ties with India are concerned, will be political and strategic affairs,” said Neelam Deo of Mumbai-based foreign policy think-tank, Gateway House.
So what do Trump or Clinton mean for India?
While Clinton is known to Indians, first as the former first lady of US and then as US Secretary of State, Trump is new to the region as well as the country. As Secretary of State, Clinton has made as many as six visits to India. According to Satinder Lambah, who was special envoy of the Prime Minister of India from 2005-14, when it comes to dealing with Asia, India will continue to occupy a special position with the US.
Compiled by Lokeshwarri SK; Graphic: KS Gunasekar