Foreign Policy Watch: India-United States

[op-ed snap] Terms of estrangementMains Onlyop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Contentions in India and USA relationship


CONTEXT

While India and the US claim to be strategic partners, the bones of contention are now more numerous and more substantial than they’ve been in the last two decades — after Bill Clinton’s visit in 2000.

1.Freedom of religion issue

  • For more than half a decade, the annual report of the State Department on Freedom of Religion accuses India of not treating its minorities in the right manner.
  • In April, the 2019 report not only mentioned the role of vigilante groups involved in “mob lynchings” but cited organisations: “A multifaceted campaign by Hindu nationalist groups like Rashtriya Swayamsevak Sangh (RSS), Sangh Parivar, and Vishva Hindu Parishad (VHP) to alienate non-Hindus or lower-caste Hindus is a significant contributor to the rise of religious violence and persecution.

2. Trade Issues

E-commerce –

  • In February, India introduced new e-commerce rules that affected foreign online retailers, including Amazon and Walmart, which could no longer negotiate exclusives on products and sell items via vendors they hold an equity stake in, like Flipkart (that Walmart bought for $16 bn last year).
  • Amazon India and Flipkart represent 70 per cent of e-commerce in India today and these new rules were intended to help domestic sellers to resist the American giants.

Generalised System of Preferences –

  • Trump waited for the Indian elections to be over, but on May 31 he terminated India’s designation as a beneficiary developing country of the Generalised System of Preferences.
  • The withdrawal of duty-free access to Indian exporters is bound to damage the Indian economy.
  • The Modi government retaliated in June by imposing tariffs on 29 American goods.

3.Visa Issues

  • Indians are not as welcome in the US as they used to be. Not only have thousands of techies seen their demand for an H1B visa extension rejected, but the Trump administration is contemplating imposition of a 10-15 per cent quota of all the H1B visas on migrants from countries forcing foreign companies to store data locally.
  • India is one of them and is, therefore, criticised by companies like Mastercard and Visa, which have effectively lobbied the Trump administration.
  • Such a cap on the Indian H1B visas would be an additional blow as Indians get about 70 per cent of the 85,000 H1B visas granted every year by the US.
  • One may argue that such practices are unfair, but India’s attempts at regulating migration in the North-east reflect the same agenda — the kind of agenda on which national-populists are elected.

4.Strategic autonomy issue –

  • The Indian policy of multi-alignment or strategic autonomy is another.
  • This approach is hardly sustainable when the world scene gets so polarised that memories of the Cold War come to mind.
  • India thought it could be a strategic partner of the US and still buy S-400from Russia.
  • It went ahead with the deal at a cost of Rs 40,000 crore (without any tender) in spite of US warnings — and now it has to negotiate in order to get a sanctions waiver.

5.Balancing Iran and USA

  • Similarly, to be a friend of Iran and the US at the same time is getting more and more difficult.
  • New Delhi has had to bow to Washington when the Trump administration ended on May 2 waivers that allowed India (among others, including China) to continue their oil imports for six months after American sanctions over Iran were re-imposed.
  • After all, India needs Iran because of Chabahar and Afghanistan — where the American withdrawal is another bone of contention.
  • An important question is arising in DC too: How far can the US rely on India to contain China?
  • In the last Shanghai Cooperation Organisation meeting at Bishkek, Modi did not rule out India joining hands with Russia and China in the emerging trade war with the US.
  • The decision India will make regarding 5G will send a significant signal: Will it boycott Huawei, like the US, or will it say “no” to the US and deal with Huawei?

Conclusion

At Osaka, Modi thanked Trump for his “love towards India” and the latter said that both countries “have never been closer”. But these words may not reflect the full picture of the US-India relationship at a time of resurgent nationalism and national-populism.

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