Haritha's Musings: Setting Stage for stead-fast Indo-US Ties

The first India-US Strategic and Commercial Dialogue, a brain child of the Modi-Obama meet at Delhi in 2015 concluded just before Modi’s arrival in the US setting ground for an interaction between leaders of both countries next week in New York. India-US Strategic Dialogue has been in place since 2010, this year it was elevated to accommodate commercial and economic aspects besides the issues of security and global diplomacy. While the Strategic Dialogue earlier too included the economic issues the new format is more on lines of China-US Strategic and Economic Dialogue. But the extent of trade between the India and US is roughly one sixth the size of US and China.

Indian delegation was headed by foreign affairs minister Sushma Swaraj and included Minister of Commerce Nirmala Sitharaman and Minister of Coal Piyush Goyal. American side was represented by US foreign secretary John Kerry, Secretary for Commerce Penny Pritzer and Secretary of Energy Ernst Moinz. The event attended by nearly 400 business leaders from both countries opened on a promising note with Joe Biden, Vice-President of US in his inaugural address indicating that the US wants India to be its best friend (1). He appealed that both democracies should collectively working towards climate change and to rein in extremist forces.

While there has been a greater understanding between the countries on strategic issues the economic front is marred by lack of synergy. Days before beginning of the dialogue several US senators expressed their concerns about section 3(d) of India Patent System that curtails the practices of ever greening of a patent, restrictions in market access, policy towards US agricultural products and crackdown on the NGO’s. Further India’s report card on economic front issued by World Bank was poor with ease of doing business (142^nd), enforcement of contracts (186) and resolving insolvency (136) among 189 countries. US has been quite critical of bad statistics. But Indian delegation struck back with pragmatic statistics that projected a rosy image of the economy. These include India topping the innovative index among the low income group. Elsewhere a study of Morgan Stanley group rated Indian private sector companies as the best in the World (2). Further with the bursting of the stock market bubble in China, India is projected to emerge as the best economy among BRICS. Besides a stable currency, demographic dividend and a robust stock market make India one of best places for investment (3).

A steadfast approach of Modi government resulted in substantial improvement of Macro Economic indicators like GDP, Consumer Price Index, reining on fiscal deficit, balance of payments, stock index. Several Indian Economists are pragmatic at the pace of reforms and opine that a clarity on deregulation, tax regime, dispute resolution will augur foreign investment. India markets largely driven by domestic consumption and thus a lucrative place for foreign investments.

Ministerial level dialogue between the countries wrapped up in Washington on 24^th ended with the release of Joint Statement (4) which briefly elucidates the initiatives and bilateral agreements reached and laid foundations for strengthening of long term relation. Following the conclusion of the dialogue, Sushma Swaraj reflected on six major takeaways. These included- steering high level dialogue, nuclear cooperation, internet governance, combating terrorism, working towards climate change and long term space cooperation (5).

Strategic interests significantly outweighed the commercial aspects in the dialogue process. Both sides believed that intense engagement can be fostered through facilitation of greater interactions between bilateral institutions and people. The US welcomed Indian proposal of conducting regional Pravasi Bharatiya Divas (PBD) at Los Angeles in November 2015.

Strategic and Defense Issues

Significantly the two vibrant democracies of the World envisaged the need to extend the arena of collaboration in new areas and consistently work towards contribute towards peace, security and prosperity under the Joint Strategic Vision for Asia- Pacific and Indian Ocean Region. The US has been highly appreciative of India’s efforts in evacuating its citizens from Yemen and resolved to protect civilians during global crisis. Both countries have decided to train troops in identified six African countries before they are recruited in the UN Peace Keeping Forces.

US has agreed to support India’s membership into the Missile Technology Control Regime and NSG and into other nuclear nonproliferation regimes. Further it was agreed that the bilateral ministerial dialogue would also Japan and would eventually held along the sides of UN General Assembly meetings and consequentially Japan will be part of the 2015 MALABAR naval exercise.

Interestingly both sides have agreed on launching a new high level consultations led by Indian foreign secretary and US deputy secretary for State. While India has proactively pushed through the InterGovernmental Negotiations (IGN) on Security Council reforms on the eve of the 70^th Anniversary of the UN, the tepid response of the US delegation has been a bone of contention. India’s bid for permanent seat in the reformed UN Security Council India received a major boost with the US reaffirming its support.

US appreciated India’s proposal to launch SAARC satellite and both sides in an effort to scale up outer space cooperation are exploring the possibility of renewing US-India Technology Safeguards Agreement for 10 years to facilitate launch of US satellite components on Indian Space vehicles. Currently both countries are sharing technical data on Mars Orbiter Space Security Joint agreement launched in March 2015. The ambit of cooperation is now extended to areas like blue economy, protection of Ocean ecosystem

In line with India’s aspirations of forging ahead into the realm of internet governance, discussions are on to include India in ICANN. A track 1.5 program is convened to further cooperation on internet and cyber issues.

India and the US intend to steadily step up cooperation between their defense industries through “Make in India” program. A ten year Defense Frame Agreement was formally signed by the US and Indian counterparts during Defense Secretary Aston Carter’s visit to India in May 2015. In memory of the victims of the 26/11 and 9/11 both sides resolved to expand partnership in endorsing the Joint Declaration on combating terrorism. Both sides pledged their commitment to restore peace in Afghanistan through high level consultations and they expressed support for the timely implementation of Joint Comprehensive Plan of Action (JCPOA) evolved by P5+1 for Iran.

Climate and Clean Energy

In the run up the COP, Paris Conference of Parties under the UN Framework Convention on Climate Change in December both sides accentuated the need to work towards mitigating the global climate change. India in a bid to curtail its emissions is keen on adopting embracing clean energy initiatives and actively seeking technological partnership. To foster scientific and academic cooperation in the field of climate change and renewable energy US-India Partnership announced Fulbright Climate Fellowship program. A MoU was signed to tackle wild life trafficking a special mention was made of India’s anti-poaching efforts towards conservation of Tigers.

Combatting Terrorism

The Joint statement on Strategic and Defense cooperation emphatically pondered on enhancing and extending the purview of cooperation to new areas to intensify engagement, a categorical Joint statement on combatting terrorism is the hall mark of this entire dialogue process (6). Sushma Swaraj vehemently reiterated the threat posed by Al-Qaeda, its affiliates, Lashkar –e-Tayyaba, D-company, Haqqani Network, Jaish-E- Mohammad and appealed Pakistan to bring the perpertrators of the terrorism to justice. Both sides have severely condemned the terrorist attacks in Gursdaspur and Udhampur. India appealed to US that it is time to act tough on kinds of terrorism that threaten the peace and stability of entire South Asia. During the discussions India reiterated the need for enhanced cooperation against money laundering, terrorism finance, extradition and mutual legal assistance. Mumbai is included the Strong Cities Network, an initiative under which the local governments are systematically strengthened in building community resilience to counter violent extremism. Progress has been made for MoU between the Indian National Police Academy (Hyderabad) and the New York Police Department. The tough stance of the US towards terrorism does indicate that Washington no longer accepts the Islamabad’s line of argument. But the lack of consistent action and veiled financial support of the US to the Pakistan does raise doubts about its real intentions. Even though US specifically calls for bringing the 26/11 masterminds to justice, Pakistan remains unperturbed under the aegis of China. Accustomed to fanning out despicable claims against India Prime Minister Sharif has set ground to rake up the Kashmir issue at the UN General Assembly. Incidentally China too has raised the issue of recent stand-off in the Burtse area of Ladakh as Indian Army has bulldozed the Chinese observatory hut built 1.5 km inside the Indian side of the LAC. The choreographed dubious claims against India by hostile neighbors at a time when the UNSC reforms are at its pinnacle clearly reflects the sinister motives of anti-India club. It is high time India too ratchets up supports with the US and Japan.

Commerce and Innovation

In a remarkable move both sides agreed to set up Innovation forum by 2016 to promote a culture of innovation, entrepreneurship and help in creating of sister hubs. Both countries announced collaboration of private sector led- Confederation of Indian Industries (CII) and the American National Standards Institute (ANSI) to kindle and scale up innovation, increase bilateral trade and investment, support advancement of small and medium scale establishments (SME). US promised to assist India in skill training programs for 400 million people over the next decade.

Both countries will be working together for removal of barriers that restrict participation in global supply chains and for sustained implementation of trade facilitation measures. US has agreed to India’s request of supporting development and evaluation of Massive Open Online Courses and Distance Education Learning. India and US has agreed to support the efforts of the Harvard University and the IIM, Ahmedabad to develop cluster map. India has agreed to ratify the WTO’s Trade Facilitation Agreement (TFA) (7). The US expressed its keen interest to work together with Indian Ministry of Urban Development on Smart Solutions for Smart Cities Reverse Trade Mission. Further a MoU in field of Mental Health, tradition medicine towards capacity building. A new working group on Agricultural Biotechnology has been developed to promote agricultural science and technology research.

Nirmala Sitharaman apprised the US delegation of the Totalisation Agreement under which Indian IT companies paid $22.5 billion from 2011-15 to the US treasury in the form of taxes, a sum which has to go back to workers. Reiterating that the US economy is currently benefitting not only from invaluable technology expertise of the workers but also from their huge tax deposits. In turn the workers are entitled to the retirement benefits. This issue is on the top of the agenda of Commerce minister and sough fruitful engagement of both parties to resolve the issue.

The dialogue progress diligently structured the path ahead for India’s strategic and defense cooperation. It is time India makes an incremental leap forward in catapulting its economy to new heights whereby large trading block could hardly afford to miss its engagement. The way forward for India to emerge as a global leader is to push hard on its economic reforms.

Haritha's Musings

Tuesday 29 September 2015

Setting Stage for stead-fast Indo-US Ties

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