Author : Harsh V. Pant

Expert Speak Raisina Debates
Published on Aug 05, 2019
India and major powers: United States of America

The 2019 Lok Sabha elections were conducted at a pivotal juncture in India’s history. As the 1.3 billion people-strong nation steadies its stride towards the US$5-trillion GDP-mark, its aspirations for its place in the world are coming to the fore. Leading the way, the government of Prime Minister Narendra Modi has effectively moved India from its historical fixation with ‘strategic autonomy’—a ghost of its nonaligned past, to ‘strategic alignment’. The government has redefined autonomy “as an objective that is attainable through strengthened partnerships instead of avoiding partnerships.”<1> This has meant, for instance, Modi in his speech at Davos having no hesitation to find common-ground with China to defend globalisation against the America First-brand of protectionism, whilst otherwise embracing the United States on a host of other issues.

Under Prime Minister Modi, India-US bilateral trade of goods and services has crossed the goal of US$100 billion set during the term of President Barack Obama, to breach US$126.2 billion as of 2017.<2>  Either side’s Foreign Direct Investment (FDI) witnessed a double-digit growth in 2017—with US FDI in India rising by 15.1-percent and India’s FDI in the US surging by 11.5 percent (See Figure 1).<3>

Further, immigration has emerged as a political lightening rod under Trump, even causing an across-the-board decline in international student enrolments. Of those foreign students, Indian nationals accounted for 17.9 percent in 2017-18—second only to Chinese nationals, contributing US$7.5 billion to the US economy.<4>  Meanwhile, the number of US students studying in India has seen a year-on-year increase—from 4,181 to 4,704 in 2017-18.<5>

Importantly, the Modi government ramped up defence trade and force interoperability with the US. One may argue that this has largely stemmed from a convergence of interests with regards to a “free and open” Indo-Pacific, and a consensus on the US being India’s “most important partner” amongst 75 percent of New Delhi’s strategic community.<6>

However, the emerging strategic alignment with the US also has a realpolitik  relevance over foreseeable US military primacy. Despite its relative economic decline, the US is poised to dominate the military realm due to high defence spending, ahead-of-the-curve arms ingenuity fostered by a robust public- private defence industrial base, and unparalleled power projection capability of nearly 800 military outposts across 70 countries.<7>

Figure 1: India–US Bilateral Trade and FDI

Source for Indo-U.S. Bilateral Trade:
Source for India’s FDI in the U.S.: in-the-united-states/
Source for U.S. FDI in India: since-2000/

Indeed, India-US defence trade has increased from US$1 billion in 2008, to over US$18 billion today.<8>  Between 2013-17—largely coinciding with Modi’s first term—US arms exports to India saw a staggering increase of over 550 percent,<9> making America, India’s second-largest arms supplier.<10>  As a result, India now operates the second-largest C-17 Globemaster and P-8 Poseidon fleets in the world.<11>

Furthermore, the Defence Technology and Trade Initiative (DTTI) assumed the core of Indo-US defence trade relations. DTTI has effectively moved New Delhi and Washington from a traditional “buyer-seller” dynamic to one of co- production and co-development;<12> this hones the potential of overcoming the supposed inconsistencies between Narendra Modi’s ‘Make in India’ and US President Donald Trump’s ‘America First’ push to indigenisation. For instance, with Tata Advanced Systems Limited (TASL), Boeing employs over 300 people at its Hyderabad co-production facility for the manufacture of fuselages of the AH-64 Apache helicopters.<13>  Indirectly, too, Boeing India employs over  1,200 and another 7,000 attached to its domestic supply chain partners.<14>

Furthermore, with Lockheed Martin, TASL employs over 80 skilled personnel at India’s pioneering metal-to-metal bonding facility at Adibatla.<15>  In raising the tempo for technology transfers, India in 2018 also became just the third Asian country (after formal US treaty allies, Japan and South Korea) to receive clearance on purchasing licence-free space and defence technology under the Strategic Trade Authorisation-I.<16>

Under Modi, stronger Indo-US defence ties also led to increased force interoperability. In 2016, the Modi government signed the Logistics Exchange Memorandum of Agreement (LEMOA) giving “access to designated military facilities on either side for the purpose of refuelling and replenishment.”<17>

In 2018, another defence foundational agreement, the Communications Compatibility and Security Agreement (COMCASA) was inked to “facilitate access to advanced defense systems and enable India to optimally utilize its existing U.S.-origin platforms.”<18>

In addition to technical interoperability, India conducts most of its military exercises with the US. The Modi government furthered cooperation on that front by overseeing the revival of the Cope India exercise between Indian and American air forces after a gap of eight years.<19> The first term of Modi also saw the integration of Japan into the Indo-US Malabar Exercise as a permanent member in 2015.<20> Beyond the coming together of like-minded powers, the same may pave the way for institutional arrangements like the Quad to mature beyond its current state as a mere political cobbling.

To be sure, challenges remain in maintaining the trajectory of India-US relations. For one, Trump’s ‘America First’ outlook magnifies the susceptibility of the bilateral dynamic to transactionalism. The latest illustration was the Trump administration’s intent to withdraw Generalised System of Preferences (GSP) status for India as trade talks to address the bilateral trade deficit continue to stall. Under the programme, India received duty-free access to the US market for exports worth US$5.6 billion.<21>  The move came despite US exports to India registering a 28-percent increase in 2018, effectively decreasing its deficit with India from US$22.9 billion in 2017 to US$21.2 billion.<22>

Thus, as one analyst recently pointed out, going forward “compartmentalisation could be key” to ensure developments on the strategic front do not get eclipsed by inconsistencies on trade matters.<23>  In addition, hurdles posed by leaders’ idiosyncrasies stand exacerbated in a time of an American president who often overstates the role of “personal chemistry” with other leaders.<24>

Seeking more institutional touch-points could therefore be effective as Indo- US relations have generally also been overtly reliant on a top-down structure. One may argue that the erstwhile approach may now be unsustainable if this bilateral engagement is to achieve its full potential. As Cara Abercrombie— former Deputy Assistant Secretary of Defence for South and Southeast Asia, has noted, “Until and unless the U.S. and India routinely engage one another at all levels within government—from the strategic to the tactical—and build habits of cooperation, the relationship will not mature.”<25>

The Modi government has taken steps towards developing such linkages at varied levels (See Table 1). The initiation of the 2+2 dialogue between Indian

Table 1: Indio-US Bilaterals and Other Significant Meetings

* Trilateral Meeting with Japanese PM Shinzo Abe
Source: Archives of US State Department and Ministry of External Affairs

and American principals of foreign and defence cabinets could be central in dampening prospects of American sanctions (like CAATSA) over policy differences on India’s relations with US adversarial nations like Russia and Iran. The intended development of the Indo-US Industrial Security Annex—aimed at supporting “closer defence industry cooperation and collaboration”—could enhance technology transfers via identifying new public-private partnership avenues.<26> The inaugural India-US CEO Forum—which was held early this year, can potentially address recent flare-ups on trade by identifying more “areas for closer collaboration for mutual benefit of both economies.”<27>  Lastly, in going beyond mere technical interoperability, the Modi government also sought military liaison contact points. Last year, it was announced that the defence attache at India’s embassy in Bahrain will double up as a representative<28>  at the US Naval Forces Central Command (NAVCENT)—home of the US Fifth Fleet.<29>

Table 2: Key Indo–US Addresses, Declarations and Joint Statements

Source: Archives of US State Department and Ministry of External Affairs

Therefore, in tackling emergent challenges and consolidating gains of the past five years, the Modi government, in its second term, will have to further prioritise moving away from the top-down approach to Indo-US relations. In continuing to “overcome the hesitations of history”<30>—as Modi told the US Congress in 2016—it would be imperative to seek further institutionalisation of this “natural alliance” at bureaucratic, legislative, military, and even public- private partnership levels.

This article originally appeared in special report Looking Back looking Ahead.

End Notes

<1> For a detailed articulation of this argument, see Harsh V. Pant, Indian Foreign Policy: The Modi Era (New Delhi: Har-Anand Publishers, 2018). <2> USTR Report, “U.S.-India Bilateral Trade and Investment,” Office of the United States Trade Representative, 8 April 2019. <3> Ibid. <4> Prashant K. Nanda, “Flow of Indian students to US slows to a five-year low,” Livemint, 14 November 2018. <5> Ibid. <6> Dhruva Jaishankar, “Survey Of India’s Strategic Community,” The Brookings Institution, 1 March 2019. <7> David Vine, “Where In The World Is The U.S. Military?” Politico Magazine, July/August 2015. <8> Sadanand Dhume, “India Is Falling Behind China In An Asian Arms Race,” Wall Street Journal, 7 February 2019. <9> Special Correspondent, “India’s Arms Imports From U.S. Up By 550%: Report,” The Hindu, 13 March 2018. <10> Rahul Singh, “India Still Largest Arms Importer, Spent More than $100 B in Last 10 Years: SIPRI,” The Hindustan Times, 12 March 2018. <11> DoD Report, “Enhancing Defense and Security Cooperation with India– Joint Report to Congress,” The US Department of Defence, July 2017. <12> Ibid. <13> Boeing News Release, “Tata Boeing Aerospace Delivers First AH-64 Apache Combat Helicopter Fuselage,” Boeing, 1 June 2018. <14> Ibid. <15> Lockheed Martin news release, “Tata, Lockheed Martin Bring New Cutting- Edge Aerospace Technology To India,” Lockheed Martin, 18 April 2018. <16> Richard Fontaine, “U.S.-India Relations: The Trump Administration’s Foreign Policy Bright Spot,” War On The Rocks, 24 January 2019. <17> Dinakar Peri, “LEMOA Fully Operational Now,” The Hindu, 8 September 2018. <18> Ankit Panda, “What The Recently Concluded US-India COMCASA Means,” The Diplomat, 9 September 2018. <19> PTI report, “Air forces of the US and India to hold joint exercise ‘Cope India 2019’,” The Economic Times, 29 November 2018. <20> BS Webteam report, “Malabar 2018: All you need to know about the trilateral naval exercise,” The Business Standard, 15 June 2018. <21> Rishi Iyengar, “The US And India Are Heading For A Showdown On Trade,” CNN, 13 February 2019. <22> Seema Sirohi, “Trump’s Trade Mantra: Heads We Win, Tails You Lose,” Observer Research Foundation, 7 March 2019. <23> Seema Sirohi, “Trump’s Trade Mantra: Heads We Win, Tails You Lose,” Observer Research Foundation, 07 March 2019. <24> Michael R. Gordon, “Trump’s Approach To Diplomacy Hits A Snag In North Korean Summit,” The Washington Street Journal, 28 February 2019. <25> Cara Abercrombie, “Realizing the Potential - Mature Defense Cooperation and the U.S.-India Strategic Partnership,” The National Bureau of Asian Research, 30 January 2019. <26> Ajai Shukla, “2+2 Talks: US-India Sign COMCASA, Agree To Do Tri-Service Military Exercise,” Business Standard, 7 September 2018. <27> PIB report, “India - U.S. Commercial Dialogue and CEO Forum Held in New Delhi,” Press Information Bureau Government of India, 14 February 2019. <28> Sandeep Unnithan, “Exclusive: We Can Match China In The Indian Ocean Region, Says Navy Chief Sunil Lanba,” India Today, 17 November 2018. <29> USCENTCOM, “Unified Commands, CENTCOM & Components,” U.S. Central Command, . <30>PM Narendra Modi’s speech in US Congress,” Indian Express, 10 June 2016.
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Harsh V. Pant

Harsh V. Pant

Professor Harsh V. Pant is Vice President – Studies and Foreign Policy at Observer Research Foundation, New Delhi. He is a Professor of International Relations ...

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Kashish Parpiani

Kashish Parpiani

Kashish Parpiani was Fellow at ORFs Mumbai centre. His interests include US-India bilateral ties US grand strategy and US foreign policy in the Indo-Pacific.

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