India-US Partnership: Shared Interests Take Precedence

The recently concluded PM Modi’s landmark State visit to the US replete with exuberant warmth can rightly take pride in the incredibly ambitious agenda both countries have set for deepening and widening the India-US partnership. With elections around the corner, while an exuberant display of warmth and accompanying pomp, grandeur, and photo-ops can be dismissed as an attempt to serve domestic constituencies, the Joint Statement from the United States and India is high on substance.

The sheer expanse of cooperation spanning “seas to the stars”¹ had notably, three core aspects – technology partnership, defence cooperation, and clean energy. Reinforcing the commitment to an open, secure, accessible technology ecosystem, countries have launched the iCET (Initiative for Critical and Emerging Technologies). Giving a huge fillip to iCET, in March 2023, countries signed an MoU on Semiconductor Supply Chain and Innovation Partnership ushering investments into India. Micron Technology caught up in the US-Chip wars is all set to invest $825 million in India towards building a semiconductor assembly and testing facility in Sanad, Gujarat. This coupled with Lam Research’s proposal to train 60,000 Indian engineers through its Semiverse Solutions and an announcement by Applied Materials, Inc to invest $400 million to establish a collaborative engineering centre in India will help in building a semiconductor ecosystem in India a hub of innovation teeming with a young and skilled workforce.

Shaping a long-term strategic technology cooperation framework, for greater technology sharing, co-development and co-production opportunities between governments, industry and academic institutions of both countries an interagency- Strategic Trade Dialogue was launched in June 2023. For creating secure and trusted telecommunications, resilient supply chains and enabling global digital inclusion countries have established two Joint Task Forces on advanced telecommunication. These task forces are focused on Open RAN, research and development of 5G/6G technologies led by India’s Bharat 6G Alliance and the US Next G Alliance. As a confidence-building measure, Indian companies are now welcome to participate in the US Rip and Replacement Program.

Working towards a Comprehensive Quantum Information Science and Technology Agreement, countries have unveiled a joint Indo-US Quantum Coordination Mechanism. To facilitate expert and commercial exchanges with like-minded nations, the US welcomed India to participate in the Quantum Entanglement Exchange and Quantum Economic Development Consortium.

Till now India largely relied on France for High-Performance Computing (HPC), especially for weather forecasts. The US has now launched $2 million grant program under US-India Science and Technology Endowment Fund for the joint development of AI, Quantum technologies and HPC facilities in India. Currently, India is the Chair of the Global Partnership on AI and with US support, India can roll out a responsible global AI regime to advance AI education, promote commercial opportunities and mitigate against bias and discrimination.

Furthering the growing cooperation in earth and space science, India has joined US Artemis Accords for space exploration and NASA will now provide advanced training to Indian Astronauts at Johnson Space Centre in Houston in a joint effort to refurbish International Space Station in 2024.

Paving way for the much-awaited defense partnership, GE (General Electric) and HAL (Hindustan Aeronautics Limited) signed MoU for technology transfer to India for the manufacture of GE F-414 engines for LCA (Light Combat Aircraft) MkII LCA. The final agreement entailing 80% of ToT to India is expected to be signed by the end of the financial year. Absent ToT, co-production, co-development in spite of the $25 billion defence agreements between India and the US, the ties failed to advance from the existing buyer-seller relationship.

Biden’s directive to remove regulatory barriers for defence tech sharing with India and the green signal for the purchase of the MQ-9B HALE UAV (High Altitude Low Endurance-Unmanned Aerial Vehicles) from the General Atomics is really a new hallmark. These drones with enhanced ISR (Intelligence Surveillance and Reconnaissance capabilities will be assembled in India. As a part of this plan, General Atomics plans to set up a Global MRO facility in India to help build her indigenous defence capabilities.

Countries are contemplating a Defense Industrial Cooperation Roadmap with a robust policy framework for collaborative research, testing and prototype testing. To this end, countries are commencing negotiations for concluding the Security of Supply arrangement and initiating discussions about Reciprocal Defence Procurement Agreement. To facilitate joint defense innovation and co-production countries have launched India-US Defense Acceleration System (INDUS-X) creating a network of universities, startups, industries and think tanks.

Since the inking of foundation defense agreements, India has emerged as the hub for maintenance and repair of forward-deployed US Navy assets following which the US concluded Master Ship Repair Agreements with Indian shipyards. Indeed, US Department of Defense’s Space Force has signed its first International Cooperative Research and Development Agreement with India start-up 114 AI and 3rdiTech, both of which are going to work with General Atomics to co-develop advanced components. This integration of Indian and American defence industries is going to be a new dawn for India’s efforts to attain self-reliance.

India has a stellar record in discharging climate responsibility obligations. Making sustainability a mass movement, India is roping in many partners in its initiatives which are very well received. As a part of its US-India Strategic Clean Energy Partnership (SCEP), countries have now launched US-India New and Emerging Renewable Energy Technologies Action Platform for accelerated cooperation in green hydrogen, wind energy and other emerging technologies.

Often US investments and its employment generation potential in India garner the headlines. Indian investments worth $40 billion have created 4,25,000 direct jobs in the US¹. During PM Modi’s State visit India’s VSK Energy LLC and India’s JSW Steel USA announced investments of $1.5 billion and $120 million in renewable energy and infrastructure industries. Also, India’s Epsilon Carbon Limited is planning to invest $650 million in US greenfield electric vehicle battery component factory. In fact, India’s historic agreement with Boeing for 200 aircrafts has created over 1 million jobs across 44 US States. 

It is worth noting that Indian companies, part of the US-India CEO forum are upskilling more than 2,50,000 employees and promoting STEM learning in the local communities across the United States. The concept of “Innovation Handshake” under commercial dialogue is now connecting dynamic startup ecosystems of India and US and fostering innovation, job growth in emerging technologies.

To decarbonise the transport sector and develop sustainable aviation fuel, India along with Brazil and the US developed Global Biofuels Alliance which will be launched in July. Nuclear energy plays a significant role in decarbonisation efforts and energy security. To meet growing energy needs, India’s Nuclear Power Corporation of India Limited (NPCIL) has intensified negotiations with Westinghouse Electric Company (WEC) for construction of six nuclear reactors in India.

Critical Mineral Elements are critical for the clean energy transition and to achieve the climate and strategic technology goals. To develop diverse and sustainable global supply chains, US offered India to join the Mineral Security Partnership (MSP). India has reaffirmed support for India’s membership to NSG (Nuclear Suppliers Group) and IEA (International Energy Agency). Underscoring the need for reforming the multilateral institutions to reflect changing global realities. Countries reaffirmed need Comprehensive Reforms Agenda including increasing the number of permanent and non-permanent members in the UNSC. US reiterated support for India’s UNSC permanent membership.

Pledging to render humanitarian assistance, India concurred with the US on the need for the reconstruction of Ukraine and called for the need for respecting territorial integrity and sovereignty, the contemporary global order built on UN charter and international law. Refraining to condemn Russia, India reiterated that this is not an era of war but of diplomacy and dialogue.

Recommitting to the free, open, inclusive Indo-Pacific, reaffirmed empowering the Quad for peace and prosperity in the Indo-Pacific. India invited the US to join the Indo-Pacific Ocean Initiative and the US welcomed India as an observer in the Partners in the Blue Pacific. Countries shared their concerns over the deteriorating situation in Myanmar, denuclearisation of Korean Peninsula, and a stable, representative and inclusive government in Afghanistan.

Without naming China, leaders of both countries expressed concerns over the coercive actions and unilateral attempts seeking to alter the status by force, they strongly condemned Pakistan for the cross-border terrorism, and use of terrorist proxies and called for immediate action to ensure that their territory is not used as a launch pad by terrorists.

In addition to the above, India and US have agreed to resolve six outstanding WTO disputes and establish US-India Global Challenge Institutes to ignite deeper research partnerships. Plans are afoot to explore a US-India Global Digital Development Partnership for developing and deploying Digital Public Infrastructure (DPIs) in developing countries, launch the India Ocean Dialogue, hold US-India Cancer Dialogue, and conclude the Cultural Property Agreement to prevent illegal trafficking of antiquities.

The $191 billion bilateral trade between India and US in 2022 nearly double from 2014 aligns well with the unique synergy between the two countries. In tune with the demands of changing technologies and advancements, both countries are constantly stepping up their engagement and expanding the facets of cooperation to encompass all sectors.

India-US bilateral ties which have expanded most rapidly in recent years are constantly evolving, reforming, renewing, and advancing the aspirations of both countries.  Anchored and nourished by the strong Indian Diaspora, who have been instrumental in building bridges of friendship both countries have overcome the “hesitations of history”.

The real measure of the partnership will certainly be judged by the outcomes which need sustained efforts and commitment. The 2005 civil nuclear pact was a real pathbreaker that failed to take off despite all the regulatory clearances. Eighteen years hence rising India is well poised to leverage its huge markets and immense growth potential to synergistically partner with advanced countries to catapult itself into a technology-driven economy.  Facing difficulties Chinese companies are now pledging investments in India and in their efforts to decouple, India is a promising bet.

Additionally, the inexorable driving force that brought US and India together is the prospect of the US being at odds with two powers- Russia and China simultaneously. The Ukraine conflict has irrevocably damaged Russo-American ties and Sino-US ties are fraying with a likelihood of a Ukraine-like situation in the Indo-Pacific. Extraordinary geopolitical and geoeconomic convergences quintessentially caused the remarkable dynamism in the India-US Strategic partnership.

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