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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 before.
• The relations between the two countries had been plateauing for months with Trump being preoccupied with domestic and international battles.
• The whim of US Administration under Trump and recent events has put the India-US relations again under test of time.

Let’s take a look a timeline of recent events:

• Discontinuing India’s designation as a beneficiary of its Generalized System of Preferences (GSP) duty concession programme
• Freedom of religion issue
• US claim of credit for settling Balakot Air strikes and Pulwama attack
• US offer for mediation on Kashmir

At glance

I. Trade Issues

• Trade is a big source of friction between the two nations. US companies see India’s 1.3bn people as a potentially lucrative market.
• But they have been frustrated with New Delhi’s protectionism and unpredictable regulations and policies, which make India a notoriously tough place to do business.
• Specific points of irritation include India’s price caps on medical devices such as stents; restrictions on US dairy imports; restrictions on foreign companies operating in e-commerce and retail; and new data localisation rules.
• Trump has repeatedly complained about India’s 50 per cent import duties on Harley-Davidson motorcycles.
• US administration also terminated India’s designation as a beneficiary of the GSP citing unfair protectionist measures by India.
• The withdrawal of duty-free access to Indian exporters is somehow bound to damage the Indian economy.

II. Visa Issues

• Indians are not as welcome in the US as they used to be as thousands of techies seen their demand for an H1B visa extension rejected.
• 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.

III. Freedom of Religion issue

• The annual report of the State Department on Freedom of Religion accuses India that for more than half a decade India of not treating its minorities in the right manner.
• It alleged the role of vigilante and right wing groups involved in “mob lynchings” to alienate non-Hindus or lower-caste Hindus is a significant contributor to the rise of religious violence and persecution.

IV. Autonomy issues

• India has long valued its strategic autonomy and its freedom to maintain a complex web of warm foreign relationships.
• In particular, Iran and Russia are both longstanding traditional friends which have historically provided India with oil and military hardware.
• India is in the process of purchasing S400 surface-to-air missile systems from Russia which could mean more sanctions as per a US law called “Countering America’s Adversaries Through Sanctions Act” (CAATSA).

V. Content over Iran

• 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 waivers that allowed India (among others, including China) to continue their oil imports from Iran
• After all, India needs Iran because of Chabahar and Afghanistan — where the American withdrawal is another bone of contention.

Immediate cause of rift: Unwelcomed move over mediation on Kashmir

• More recently, Trump threw a bombshell at India during his meeting with Pak PM Imran Khan by saying that PM Modi had asked him to mediate on Kashmir.
• India’s insistence on bilateralism has historically stemmed from the distrust of outsiders meddling in its internal affairs.
• India has sought outside help from the world, not for mediation, but to rein in Pakistan’s meddling of terror in Kashmir.

Why is US frustrated with India these days?

• An important question is arising for Washington is: How far can the US rely on India to contain China?
• In the last SCO meeting at Bishkek, Modi did not rule out India joining hands with Russia and China in the emerging trade war with the US.
• Huawei is another potential sore point. The Chinese tech giant has plans for expansion in India and hopes to play a role in building the country’s 5G network.
• The US has been pressurizing India to ban the Chinese company from its 5G development and deployment on the back of security concerns of Chinese surveillance on these networks.

U.S. deterrence is not unusual

• The US president claimed to have defused the India-Pakistan standoff that arose from the Pulwama attack. The US is said to have played a part in release of Abhinandan.
• The US also played a role in forcing China to agree to the designation of Jaish chief Masood Azhar.
• And most recently, Trump took credit for the arrest of Hafiz Saeed. Perhaps Trump thinks he has already resolved much of the problem.

U.S. is still important

• The US move to take a listing request for Jaish-e-Mohammad founder Masood Azhar directly to the UN Security Council is an indicator of its undeterred support for India.
• The recent passing of a bill titled Fairness for High-Skilled Immigrants Act (HR 1044) which would make shorter wait time for Indian applicants of Green Cards is one of the major sigh of relief for Indian migrants.
• Passing of HR 2123 Bill to give India Nato-ally like status is a vital step to enhance strategic cooperations.
• The isolation of Pakistan by US is another boon for India’s quest for peace in South Asia.

Conclusion

• The US president’s statement can be explained away as another instance of “Trump being Trump”.
• As usual, India cheers the strong support by the U.S. on multiple fronts.
• The US like always has been clear to seek greater market access and the removal of trade barriers in our economic relationship.
• Unlike the US-China trade war, and the US-Mexico disputes the recent differences were never at the centre of India-US relations.
• As correctly pointed by Mike Pompeo, Great friends are bound to have disagreements.

Way ahead

• The current state of play suggests that the two countries were now at a crossroads.
• There is no easy way to sugarcoat the present state of the relationship, it is one in which the only common denominator is a fundamental misunderstanding of priority objectives on the other side.
• A strong commitment to improve the bilateral trade relationship and build a sound foundation for future successes is necessary.

 

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Also read:

 

For amazing timeline of India-US relations since 1947 , navigate to the page:

https://www.cfr.org/timeline/us-india-relations