Modi and Biden Align Strategic Partnership with Emerging Challenges

India extended a lavish welcome to Joe Biden on his official visit to India as the US President. Building on the momentum from the US State visit in June, in a marked departure, PM Modi held bilateral talks with President Biden at his residence at 7 Lok Kalyan Marg hours preceding the G20 Summit.

 Between June when PM Modi’s US State visit set the agenda and now, there has been swift movement with respect to defence agreement. During PM Modi’s US State visit, The US Congress approved the pact between GE and Aerospace and Hindustan Aeronautics Limited (HAL) that entailed 80% of technology transfer for the joint production of F414 fighter jet engines for the Indian Air Force.

This technology transfer valued at an estimated $1 billion would enhance the indigenous component in LCA Tejas Mk2 and set the stage for further defense collaborations. Kickstarting the official process for the acquisition of 31 ‘Killer Drones’ or MQ-9B reapers drones, India has issued a Letter of Request (LoR) signaling the intent to seal the deal by the end of the financial year. These High Endurance Long Range Drones will be assembled in India. General Atomics is believed to tie up with some Indian companies to increase the indigenous components from 8-9% to 15-20%.  Additionally, as part of an agreement, reached between India and the US in June 2023, both countries decided to terminate six WTO disputes and curb retaliatory tariffs on certain US products. As per September 5, government notifications India has removed additional duties on US imports- lentils, chickpeas, apples, walnuts, and almonds. With this India and US have settled the seventh and the last outstanding WTO dispute.

To expand collaboration in clean energy collaboration, India and the US launched the Renewable Energy Technologies Action Platform (RETAP). Under the Master Ship Repair Agreement, the first US ship, USNS Salvor docked at the L&T at Kattupalli port for repair paving the way for India to become the Indo-Pacific logistic hub. Augured by this partnership, Mazagon Dock Shipbuilders Ltd and the US Navy concluded a second agreement in August. Indeed, US industries have made commitments to make more investments in India’s maintenance, repair, and overhaul facilities of aircraft as well.

In a boost to semiconductor partnership, US’s AMD (Advanced Microchip Devices) announced an investment of $400 million over five years to set up the biggest design facility in India and Microchip Technology rolled out plans to invest $300 million in chip assembly and test facility in Gujarat. An avid interest in advancing the agreements initiated three months ago besides asserting commitment reflects the earnestness of both sides in building an enduring partnership.

Despite the discomfiture over India’s import restrictions and requirement of licenses on the import of laptops and other electronic items like tablets and personal computers, the bilateral relations are more or less stable. The geopolitical turn of events especially, the tenuous relationship of both countries with China is now emerging as a formidable driver for the India-US strategic partnership. China’s muscle flexing and its interception of US vessels and aircraft in the air defense zone (ADZ) over the South China Sea (SCS) and Taiwan Straits is inevitably bolstering the indispensability of India’s partnership to ensure a free and open Indo-Pacific.

Unwavered by China’s intimidatory tactics, India has stiffened its stance and reiterated the precondition of peace and tranquility at borders for the normalisation of bilaterals. Around the same time, US diplomats have been making a beeline to China to revive ties and stabilise the lines of communication which have taken a hit over the Taiwan issue and the Chip war. Toggling between decoupling and derisking while the US has started advocating “protect what we must and promote what we can”. India has been crystal clear about its foreign policy toward China which became more resolute following China’s obstinate defiance of the disengagement of troops. Ironically, more than three years into Presidency, Biden is unclear about America’s China policy.

India on the other hand, is taking on China at the platforms where Beijing is the dominant actor. Standing her ground, India, as the Chair of SCO triumphantly discharged its responsibilities and resisted Chinese attempts to advance its agenda at the SCO summit. Similarly, at the recently concluded BRICS summit, India thwarted Beijing’s attempts to turn the bloc into a Chinese club by insisting on instituting a mechanism and guidelines for the expansion of BRICS. Emerging as a potential counter to China both in terms of repulsing its territorial aggressions and diplomatically voicing the concerns of the developing economies and advocating for developmental agenda, trouncing China’s ambitions of unipolar Asia, India is swiftly positioning herself as an alternate pole in the continent.

While shared concerns about China have been the major driving force of the India-US ties, growing realization in Washington of India’s rising stature in the region, her adherence to the rules-based international order, democratic functioning and a potential voice of the global south are impelling the US to deepen multi-dimensional partnership.

Indeed, the 29-para joint communique of the Modi-Biden meeting bereft of any mention of regional or global issues has pointedly distilled the crux of the partnership which is broad-based. A reference to a “free, open, inclusive Indo-Pacific” highlighted China’s muscular aggression. The focus has been on reviewing the agreements reached in June, taking stock of their current status and enunciating the future goals of each of these pacts and dialogues.

Biden congratulated Modi, scientists and engineers associated with Chandrayaan-3 on its historic lunar landing and the successful launch of the Aditya L1. Setting the stage for enhanced cooperation, countries are planning to establish a Working Group for Commercial Space collaboration under the existing India-US Civil Space Joint Working Group. Countries affirmed interest in advancing cooperation in sustainable energy, agriculture, health and pandemic preparedness, semiconductor technology, telecommunications, AI, quantum science, and development of 5G/6G technologies.

Modi and Biden welcomed the development of the “Innovative Handshake agenda” under India-US commercial dialogue to bring together startups, private equity, venture capital firms, and corporate investment departments, to forge connections between innovation ecosystems of both countries. Extending support for building resilient global semiconductor supply chains, Modi and Biden have intended to undertake the midterm review of iCET (Initiative on Critical and Emerging Technologies) in September 2023 to drive momentum toward the next annual iCET review led by NSA in early 2024.

Biden reaffirmed support for a reformed UNSC with India as a permanent member and welcomed India’s candidature as a non-member for 2028-29. Leaders have agreed to intensify negotiations on collaborations in nuclear energy including the development of next-generation modular reactor technologies.

As part of decarbonising the transport sector, the US plans to acquire 1000 made-in-India electric buses. To further renewable energy cooperation, India’s National Investment and Infrastructure Fund and the US Development Finance Corporation exchanged letters of intent to set up a renewable infrastructure investment fund.

To foster scientific research the Council of Indian Institutes of Technology (IIT Council) signed an MoU with the Association of American Universities (AAU) to set up the India-US Global Challenges Institute with an initial combined commitment of $10 million¹.

The covid pandemic, surging inflations, and rising interest rates are taking a toll on the developing economies. While China is exploring new avenues to engage with the developing world, unilateral Western sanctions are driving them away from the US. The US is increasingly losing out in its attempts to reach out to developing countries, majorly the global south. Through deft diplomacy and amiable outreach, India is presenting herself as a bridge to the global south.

To manage competition with China, especially in terms of providing loans through its multilateral banks to developing countries, Biden is strengthening the Western Banks-IMF and World Bank to lend more support. He is planning to use the G20 summit to woo developing countries.

Biden lauded India’s G20 Presidency for delivering and focusing on developmental outcomes for global good. He expressed confidence and affirmed support for building inclusive economic policies and reshaping, and scaling up multilateral development banks to address the contemporary global challenges.

Given, India’s emerging role as a rising economy and its formidable reputation as a ‘doer’ the US is increasingly seeking to deepen and sustain an enduring partnership with India in countering China, developing resilient supply chains and building global consensus. As a rising great power, India is now the most sought-after country, nations are willing to partner. The US is certainly cognizant of it.

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