Pompeo to seek stronger strategic ties with India despite trade tensions

US Secretary of State Mike Pompeo will seek to further strengthen strategic ties with India during a visit next week despite increasing frictions over trade, data flows and arms from Russia, officials said.

Pompeo arrives in New Delhi on Tuesday for talks that are aimed at laying the ground for a meeting between US President Donald Trump and Indian Prime Minister Narendra Modi later in the week at a G20 meeting in Japan.

India is embroiled in disputes with the US over tariffs, Indian price caps on imported medical devices, most from the US, and Indian rules on e-commerce that impose conditions on the operations of major US companies such as Amazon and Walmart.

Another issue that has alarmed India is the possibility of US restrictions on work visas for Indian professionals in retaliation for India's insistence on local data storage by big foreign firms, even though the State Department said on Thursday it had no such plan.

“US-India trade ties, at least between our capitals, are certainly worsening. We both have leaders who look at trade as a zero-sum game,” said Richard Rossow, a US-India expert at Washington's the Center for Strategic and International Studies.

The Indian government led by Modi, who was re-elected last month with a big majority, says it has been trying to negotiate solutions to the disputes with the US but that, as a developing country, it has to protect the interests of its people.

Trump has repeatedly criticised India for its high tariffs and last month raised the stakes with the withdrawal of a decades-old trade privilege.

Indian and US officials said trade would be addressed during Pompeo's visit but emphasised the broader political and security relationship.

“There will be certain issues between us that will be on the table at all points of time,” an Indian government official said. “But it should not detract from the overall direction of the relationship, which is positive.”

ARMS SALES

Both countries are wary of the growing might of China.

US officials said Pompeo will seek to advance the US strategic partnership with India.

“India is a crucial partner in the Trump administration’s vision for a free and open Indo-Pacific region; It shares our concerns about challenges to our shared interests in the region,” a senior official of the US State Department told presspersons on Friday.

The official said Pompeo would “talk specifically ... about expanding security, energy and space cooperation,” and noted that the two countries were gearing up for their first-ever tri-service military exercises in the Bay of Bengal later this year.

At the same time, the US side was hoping the visit would provide a “kick-start” to move quickly to resolve longstanding irritants over trade and market access for US firms.

“A serious process, a credible process and a candid process is going to be critical,” the official said. “We need to get a conversation started quickly.”

India and the US eyed each other warily over decades of Cold War suspicion, when India was closer to the then Soviet Union.

But the US has become one of India's top arms suppliers over the past decade, selling more than $15 billion of weapons such as transport planes, long-range submarine hunters and helicopter gunships.

US firms Lockheed Martin and Boeing are in the race for a contract to build 110 fighter planes in a deal estimated at $20 billion.

In 2016, the US declared India a major defence partner, opening the way for sales of high-tech military equipment seen as part of a US aim to build up the country as a counterweight to China in the region.

But here too, new strains have emerged over an Indian plan to buy S-400 surface-to-air missile systems from Russia, which can trigger US sanctions under the Countering American Adversaries Through Sanctions Act (CAATSA), prohibiting any engagement with Russia's defence sector.

India, which signed the deal with Russia last year, has been hoping for a waiver, but that has not been forthcoming.

US principal deputy assistant secretary for South and Central Asia, Alice Wells, told Congress this month Washington had “serious concerns” about the possible Indian purchase and there was no available CAATSA waiver when it came to the S-400.

“We are continuing our conversations about how the US or other defence providers could assist India,” she added.