Foreign Policy Watch: India-United States

Foreign Policy Watch: India-United States

Unfurling India’s foreign policy concerns

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Impact of the next U.S. President's policies on India's two major concerns

The article analyses two major concerns of India which would be influenced by the policies adopted by the next U.S. President. 

Concern for India

  • What policy President-elect Joe Biden will adopt in its foreign policy will has bearing on India.
  • There are two foreign policy issues which are of great concern and interest — China and Iran in that order.
  • For the world, the equation between the United States and China may be the relationship of the greatest consequence.
  • For India, the most consequential relationship is not with the U.S. — as is sometimes claimed — but one with China.
  • What happens in greater West Asia will always remain of concern, but those interests will not be affected one way or the other by who is the President of the U.S.

Quad dynamics and China

  • In the Trump years, India signed all the ‘foundational’ agreements with America.
  • India also bought billions of dollars worth of military hardware from them.
  • India resisted converting the Quad into a primarily military or strategic grouping, and is in fact aimed solely at containing China.
  • The Quad is an anti-China coalition.
  • How far it can be successful in containing the Dragon remains to be seen.
  • India’s External Affairs Minister has stated, India will not join any military alliance.
  • However, given the fact that all the other three, and perhaps five or six in future, are already in strategic alliance with one another and with the U.S., it is highly likely that India too will be forced to agree to some form of military alliance at a future date.
  • But no external power would want to get involved on our side in case of major hostilities with China.
  • On the other hand, if there is a major skirmish or worse in the South China Sea, the other members of the Quad will expect us to join them in fighting China, in an area far removed from our shores.

Approach towards China

  • If Mr. Biden adopts a more conciliatory approach towards China, India may find ourselves in a difficult situation.
  • We do not want China to be permanently hostile to us; it will absorb huge resources, human and material.
  • The strong rhetoric employed in relation to China will need to be tempered.
  • Public opinion which has been worked up against China may make it difficult to do so immediately but the government is efficient in managing and moulding public opinion.

Approach toward Iran

  • It may be difficult for Mr. Biden to quickly reverse Mr. Trump’s adventurist policy towards Iran.
  • It may not be possible for him given the domestic compulsions, to readopt JCPOA in its original form.
  • But he will surely, if slowly, engage Tehran in talks and negotiations through Oman or some other intermediary, to reduce tensions in the region.
  • India may be able to buy Iranian oil, and sell our pharma and other goods to that country.
  • The government may also feel less constrained in investing openly in oil and other infra projects in Iran, including the rail project in which Indian Railways Construction Ltd has been interested.

Conclusion

While India can’t expect the reversal of all Trump era policies, there will be certain changes in the stance adopted by the new U.S. President and India should be prepared to deal with it.

Foreign Policy Watch: India-United States

How a Biden’s Presidency may affect India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Impact of US regime change on India

Donald Trump’s rise to the White House as well as his exit has led to a wide reactionary response in India.

Also read:

[Burning Issue] India US relations in the backdrop of recent hiccups

(1) Economic Impact

Trade

  • There are several ways in which the US economy, its health and the policy choices of its government affect India.
  • For one, the US is one of those rare big countries with which India enjoys a trade surplus. In other words, we export more goods to the US than what we import from it.
  • The trade surplus has widened from $5.2 billion in 2001-02 to $17.3 billion in 2019-20.
  • Under a Biden administration, India’s trade with the US could recover from the dip since 2017-18.

FDI and FPI

  • The US is the fifth-biggest source for Foreign Direct Investment (FDI) into India. Of the total $476 billion FDI that has come in since April 2000, the US accounted for $30.4 billion — roughly 6.5 per cent — directly.
  • Only Mauritius, Singapore, Netherlands, and Japan have invested more FDI since 2000.
  • Apart from FDI the US also accounts for one-third of all Foreign Portfolio Investments (that is, investment in financial assets) into India.

Ending protectionism

  • A Biden presidency may also see a renewed push towards a rules-based trading system across the world.
  • Instead of outright ad-hocism as was the case under Trump — as well as a move away from the protectionist approach that has been getting strong across the world.

(2) Visa

  • For instance, how a US President looks at the H1-B visa issue, affects the prospects of Indian youth far more than the youth of any other country.
  • Under Trump, who severely curtailed the visa regime, thanks to his policy of “America First”, India had suffered the most.
  • That could change under Biden, who is unlikely to view immigrants and workers from India with Trump-like suspicion.

(3) Technology

  • Other points of contention between India and the US are the tricky issue of data localisation or capping prices of medicines and medical devices.
  • These have a better chance of getting towards a resolution as we move away from the radical approach of President Trump to the pragmatism of a Biden presidency.

(4) Diplomacy

  • Further, under the Trump administration, the US sanctions on Iran severely limited India’s sourcing of cheap crude oil.
  • For an economy such as India, which needs a regular supply of cheap oil to grow fast, a normalization of US-Iran relationship (and lifting of sanctions) would be more than useful.
  • On China, too, while the US apprehensions are unlikely to be fewer. It is more likely that a Biden administration will help India against China, instead of clubbing the two together.

(5) Climate Action

  • Biden has promised to rejoin the Paris Climate Accord, and this may help countries such as India in dealing with the massive challenges — both technical and financial — on this front.

Foreign Policy Watch: India-United States

The next administration will also pursue ‘America First’

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- India-U.S. relations and implications of the Presidential elections in the U.S.

The voting trend in the U.S. presidential election indicates significant support for the policies pursued by President Trump. This could impact the policies the next administration pursues.

Why U.S. election matters for the world

  • The world still has need for American leadership.
  • It remains the world’s largest net provider of global public goods.
  • It is the lynchpin of the global multilateral system.
  • If Joe Biden wins, it is possible that America will re-engage with dignity and restore mutual respect in its relations with allies and partners, beginning with the trans-Atlantic alliance.
  • However, the Trump Americans, who are the new political base, will still shape American policy irrespective of who the president is.

‘America first’ is here to stay

  • The American people believe that their education, employment and retirement have been impacted by the immigration, outsourcing and liberal trade policies of past administrations.
  • Trump America does not want more migrants, it will not support the outsourcing of jobs at the cost of their own.
  • It wants a fair deal on trade that does not allow cheaper imports to put small American businesses out of business.
  • Even a Biden administration cannot return America back to the days of open borders and free trade.
  • It might relax some categories of work-visas, but it cannot return to the time when outsourcing was the preferred option for American companies.
  • It might re-engage with the World Trade Organisation but it cannot tear down the trade barriers that Trump has erected in the name of Make in America.

Foreign policy of next administration

  • The Trump Americans do not wish to spend any more taxpayer dollars on foreign wars and they want their boys and girls to come home.
  • They think America’s allies are not carrying their weight and are unfairly living off American contributions.
  • They want their allies and partners to take greater responsibility for peace and security.
  • Biden’s supporters hope that he can reverse the abdication of American global leadership and renew alliances, but as president he may find it difficult to go against the Trump Americans on issues like China, Iran and climate change, without endangering the Democratic Party’s long-term interests.
  • And if Trump is re-elected as the president, it will only be because of his core voter base and it will strengthen his resolve.

Implications for the world

  • Whether or not America withdraws from the world, American leadership, as we know it, might be over.
  • America will become more transactional and less generous.
  • Common values like democracy or multipolarity may be of lesser importance in America’s scheme of things.
  • Whether it is Trump or Biden, the Sino-US relationship will remain complicated and rivalrous.
  • Whether it is Trump or Biden, the Obama-era nuclear deal with Iran cannot be restored.
  • Whether it is Trump or Biden, American troops will soon be gone from Afghanistan.
  • There will be less willingness to consider emerging economies as deserving beneficiaries of concessional arrangements.
  • A Biden presidency might also mean a more critical look at the record of not just authoritarian states but also democracies on issues like labour, environment and non-proliferation.

Implications for India

  • President Trump has been good for India in terms of foreign policy, less so in terms of economic policy.
  • But Delhi should equally be prepared for the Trump administration to ratchet up pressure on trade and to tighten rules on immigration.
  • With Biden, India and the US might return to a more balanced re-engagement on trade and immigration, but should be prepared for a more accommodative policy on both Pakistan and China than Trump’s.

Conclusion

Whoever is the next occupant of the White House, the way Americans voted on November 3 will shape American policy and politics for years to come.

Foreign Policy Watch: India-United States

Consolidation of quad reflects India’s political will

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Five eyes

Mains level : Paper 2- Quad and its future

Quad as new feature of Indo-Pacific

  • Australia’s participation in the Malabar exercises marks the emergence of the Quad as a new feature of the Indo-Pacific geopolitics.
  • The question is India’s ability to take full advantage of the possibilities after the US elections to construct a wide range of new international coalitions.
  • Likely changes could envelop a range of old institutions like the Five Eyes and the G-7 grouping that coordinates Western policies on global economic management.
  • We could also see the creation of a new League of Democracies that will addres issues like including the defence of shared values, commerce, corruption, taxation, climate change and digital governance.

Phases of India’s international aspiration

  • The consolidation of the Quad reflects the political will in Delhi to break free from old shibboleths and respond to security imperatives.
  • The post-Quad era opens a new phase in which India, for the first time, can help shape global institutions.
  • First phase: Idealism was the hallmark of India’s internationalism in the 1950s, the harsh politics of the Cold War quickly dampened it.
  • Second phase: In the 1970s, India embraced the radical agenda of a New International Economic Order, as the leader of the Non-Aligned Movement and the Group of 77. The results were meagre.
  • Third phase began with the end of the Cold War.
  • And as India’s own economic model collapsed, India had to focus on economic reform and prevent the world from intruding too much into its internal affairs.
  • The fear of the US activism on Kashmir and nuclear issues saw Delhi turn to Russia and China in search of a “multipolar world” that could constrain American power.
  • The BRICS forum with Russia, China, Brazil and South Africa became emblematic of this strategy.
  • Delhi also figured out that it was not possible for BRICS to constrain Beijing, since China was so much bigger than the other four members put together.
  • Fourth phase in India’s multilateralism is marked by three features — the relative rise in Delhi’s international standing, the breakdown of the great power consensus on economic globalisation, and the breakout of the US-China rivalry.

Efforts to tackle China

  • The Trump administration has already sought to imagine the Quad’s possibilities beyond the defence domain.
  • The invitation to India to join a Five Eyes meeting came amidst the bipartisan calls in the US Congress for the expansion of the forum and the inclusion of India.
  • The “Quad Plus” dialogue has variously drawn in Brazil, Israel, New Zealand, South Korea, and Vietnam for consultations with the Quad members on coordinating the responses to the pandemic.
  • India is also engaged with Japan and Australia in developing resilient supply chains to reduce the reliance on China.
  • President Trump has proposed the expansion of G-7 grouping to include Australia, India, Russia and South Korea.
  • The last few months has seen the Trump administration promote a “Clean Network” that eliminates untrustworthy vendors from telecom systems, digital apps, trans-oceanic cables and cloud infrastructure.
  • Clean Network is now a broader effort to build secure technology ecosystems among like-minded countries.
  • Britain is said to be developing plans to convene a coalition of 10 democracies, including India, that can contribute to the construction of secure 5G networks and reduce the current dependence on China.
  • France and Canada have invited India to join the Global Partnership on artificial intelligence that now includes 15 countries.
  • The objective is to promote responsible development of AI that is consistent with shared democratic values.

Conclusion

Delhi’s participation in the sweeping rearrangement of the global structures will have major consequences for India’s economic prosperity and technological future. Unlike in the past, Delhi now has the resources, leverage and political will to make a difference to the global order

Foreign Policy Watch: India-United States

The challenges of walking the Indo-Pacific talk

Note4Students

From UPSC perspective, the following things are important :

Prelims level : India FTAs

Mains level : Paper 2- Limits and challenges India faces in its engagement in Quad and Indo-Pacific construct

The article analyses the similarity, differences and limitations of the Quad and the Indo-Pacific construct and delineate the challenges India as it seeks to deal with China.

Expectations from India in countering China

  • During the mid-2000s the world expected India to be an economic powerhouse, a decade later, those expectations remain modest, at best.
  • The international community has once again decided to court New Delhi to play a decisive role in shaping the region’s strategic future.
  • The expectation this time is more strategic and military, to lead the charge against China from within the region.

Role of India in the Quad and similarity with Indo-Pacific construct

  • Quad is a forum for strategic and military consultations among India, the U.S., Australia and Japan.
  • Quad members are also major States in the Indo-Pacific region.
  • Both the Quad and the Indo-Pacific constructs are focused on China.
  • More so, they are also in some ways centred around India’s geographic location and its policies.
  • Put differently, if you take China out of the equation, they would have little rationale for existence.
  • If you take India out of the picture, their ability to sustain as geopolitical constructs would drastically diminish.

Differences between  Indo-Pacific Construct and Quad

  • The Indo-Pacific is a politico-economic vision and the Quad is a military-strategic vision which does not form the military or strategic nucleus of the first.
  • While the Indo-Pacific provides a complex political and economic picture with a hesitant, but growing, articulation of China as a strategic challenge.
  • The Quad is inherently more anti-China in character and intent.
  • The Indo-Pacific,will find it impossible to avoid engaging China, the Quad is mostly focused on diplomatic signalling and with little common intent let alone joint action.
  • Quad’s ability to succeed would entirely depend on China — the more aggressive China gets, the more resolute the Quad countries would be in strengthening it.

Comparing Indio-Pacific with BRI

  • The BRI is far more advanced, much more thought-out, and enjoyes the support of Chinese state.
  • Several Indo-Pacific countries are already members of the BRI.
  • On the flip side, the BRI is already under immense stress from its inherent weaknesses, such as China’s unilateral pursuit of the BRI and the associated economic burdens on the States that sign up to it.

Challenges India face

1) On economic front

  • There must be strong economic partnerships and linkages among its members, merely focusing on strategic talk and possible military cooperation will not work.
  • India’s recent decision not to join the Regional Comprehensive Economic Partnership (RCEP), could potentially complicate the country’s future engagements in the region.
  • Also worryinng is the already huge gap between India and China on trade with almost every Indo-Pacific country.
  • This growing trade gap will be a major determining factor in shaping the region’s strategic realities.
  • Institutional engagement: India does not have FTAs with Australia, New Zealand, the U.S., Bangladesh and the Maldives. It has FTAs with South Korea, the Association of South East Asian Nations, or ASEAN, Japan and Sri Lanka.
  • In the case of China, it has FTAs with all these countries barring the U.S.

2) On strategic and military front

  • India strategic and military engagements in the region also fall short.
  • Beijing is a major defence supplier to several of the region’s States including Bangladesh, Myanmar, Sri Lanka, Indonesia, Malaysia, the Philippines, and Thailand.
  • This dwarfs India’s minimal sales, defence dialogues and occasional joint military exercises in the region.

Way forward

  • India’s role in the Indo-Pacific will remain limited if it does not prove to be a major economic partner to these States.
  • But given the economic slowdown in India today in the wake of COVID-19 and the lack of political consensus about RCEP, India’s ability to economically engage with the region remains limited.
  • On the military-strategic side too, India’s performance in the region is less than desirable.
  • The only choice, it appears then, is for some sort of a loosely structured regional strategic alliance with the U.S. and its allies in the broader Indo-Pacific region.

Consider the question ” What are the similarities and differences in the Quad and the Indo-Pacific construct? What are the challenges India faces as it increases its engagement in the both.” 

Conclusion

India remains caught between a deeply constrained, but unavoidable, need to rethink its strategic posture, and the recognition of its material inability to do so, at least for now.

Foreign Policy Watch: India-United States

Excessive optimism over a pact with election-bound US is premature

Note4Students

From UPSC perspective, the following things are important :

Prelims level : BECA

Mains level : Paper 2- India-US and optimism

The growing pace of India-US bilateral engagement has raised hopes in several quarters. However, there are several issues that must be considered and need to avoid excessive optimism. 

Timing of 2+2 dialogue

  • The India-US 2+2 third meeting was held in Delhi only a week before the US presidential elections.
  • The government felt that it was important to seal the Basic Exchange and Cooperation Agreement (BECA) without delay.
  • Other reason could be government’s assessment that there is bipartisan support in the US for higher and positive bilateral ties.

Need for caution in India’s approach

  • In India-US ties, the leading outside consideration is China.
  • A Biden presidency, should that be the choice of the American people, would seek to ensure that China’s rise is not at the cost of the US’s global pre-eminence.
  • However, the strategy and methods it employs would be different from that of its predecessor.
  • Further, even a Trump 2 administration, with the election done, may change course in its China approach.
  • Hence, caution and prudence are good diplomatic watchwords.
  • It is good that the agreements for a full defence engagement with the US are in place.
  • But it is one matter to have them done and an entirely different one insofar as the nature and intensity of cooperation.
  • So, India’s tradition of relying on its own strengths in matters of national security should not be eroded in the hope that an outside power would provide useful inputs.

Alliance Vs. Partnership

  • India-US ties are in the framework of a partnership, not an alliance.
  • The partnership may not be based on opposition to an outside element, the alliance almost always is.
  • Alliances also demand a much higher price than partnerships, through loss of autonomy if the ally is a bigger power.

Excessive enthusiasm on Quad may be premature

  • The 2+2 joint statement does not name China but its thrust is clear.
  • The Quad is based on a commonality of concerns on account of China’s actions.
  • India’s decision to go along with a more purposive group, including through its maritime exercises, is in keeping with its interests.
  • The real direction that the Quad will take has to await the US’s overall China strategy over the next few years.
  • Excessive enthusiasm on the Quad front may, therefore, be premature.

Way forward

  • India has to change the nature of its economic and commercial ties with China.
  • Thus, the joint statement’s reference on the need to “enhance supply chain resilience and to seek alternatives to the current paradigm” was timely, though here, again, the future US approach is not entirely certain.
  • The areas where the bilateral partnership has the potential of evolving most positively for India relate to health, education and science and technology.
  • There should not be any reluctance in developing ties in defence industries, too, but it cannot be forgotten that no country will part with any of its critical technologies.
  • But there cannot be a substitute for developing indigenous capacity for India’s needs for weapon systems.

Conclusion

India-US ties will move positively forward but there will be imponderables ahead, principally arising out of US strategies towards China. But, a close embrace of another country is always problematic.

Foreign Policy Watch: India-United States

 Explained: Basic Exchange and Cooperation Agreement (BECA) VS COMCASA VS LEMOA

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CAATSA, COMCASA, LEMOA , BECA

Mains level : India-US relations as a response to China

India and the United States have signed the Basic Exchange and Cooperation Agreement (BECA), which, along with the two agreements signed earlier — the LEMOA and the COMCASA.

Try this question for mains:

Q. What is the troika of “foundational pacts” of India with the US? Discuss each of them. (150W)

Completing the troika

  • The two agreements signed earlier are— the Logistics Exchange Memorandum of Agreement (LEMOA) and the Communications Compatibility and Security Agreement (COMCASA).
  • This completes a troika of “foundational pacts” for deep military cooperation between the two countries.

What is BECA?

  • BECA will help India get real-time access to American geospatial intelligence that will enhance the accuracy of automated systems and weapons like missiles and armed drones.
  • Through the sharing of information on maps and satellite images, it will help India access topographical and aeronautical data, and advanced products that will aid in navigation and targeting.

Benefits of BECA

  • This could be a key to Air Force-to-Air Force cooperation between India and the US.
  • BECA will provide Indian military systems with a high-quality GPS to navigate missiles with real-time intelligence to precisely target the adversary.
  • Besides the sailing of ships, flying off aircraft, fighting of wars, and location of targets, geospatial intelligence is also critical to the response to natural disasters.

What was the LEMOA about?

  • LEMOA was the first of the three pacts to be signed in August 2016.
  • LEMOA allows the militaries of the US and India to replenish from each other’s bases, and access supplies, spare parts and services from each other’s land facilities, air bases, and ports, which can then be reimbursed.
  • LEMOA is extremely useful for India-US Navy-to-Navy cooperation since the two countries are cooperating closely in the Indo-Pacific.

Concretizing the mutual trust

  • The critical element that underpins LEMOA is mutual trust.
  • Without trust, no country will be willing to expose its military and strategic assets such as warships to the facilities of another country.
  • The signing of LEMOA was in itself an affirmation of the mutual trust between the two militaries, and its application will enhance the trust.
  • It took almost a decade to negotiate LEMOA, and the exercise in a sense bridged the trust deficit between India and the US and paved the way for the other two foundational pacts.

What about the COMCASA?

  • COMCASA was signed in September 2018, after the first 2+2 dialogue during Mrs. Swarajs’ term as EAM.
  • The pact allows the US to provide India with its encrypted communications equipment and systems so that Indian and US military commanders, and the aircraft and ships of the two countries, can communicate through secure networks during times of both peace and war.
  • The signing of COMCASA paved the way for the transfer of communication security equipment from the US to India to facilitate “interoperability” between their forces.

Specific context and practical benefit for India

  • The strengthening of the mechanisms of cooperation between the two militaries must be seen in the context of an increasingly aggressive China.
  • Amid the ongoing standoff on the LAC in Ladakh — the longest and most serious in three decades — India and the US intensified under-the-radar intelligence and military cooperation at an unprecedented level.
  • These conversations facilitated information-sharing between the two countries, including the sharing of high-end satellite images, telephone intercepts, and data on Chinese troops and weapons deployment along the LAC.

Conclusion

  • Such agreements mark the enhancement of mutual trust and a commitment to the long-term strategic relationship.
  • The US wants India to move away from Russian equipment and platforms, as it feels this may expose its technology and information to Moscow.
  • So far, India is going ahead with the purchase of the S-400 air defence missile system from Russia, and this has been a sticking point for American interlocutors.
  • For its part, India is wary of Pakistan’s deep-rooted ties with the Pentagon, and Washington’s dependence on Rawalpindi for access to Afghanistan as well as its exit strategy.
  • But, because of the clear and present danger from China, New Delhi’s strategic embrace of Washington is the obvious outcome.

Foreign Policy Watch: India-United States

Incentives for furthering the India-US partnership are stronger than ever

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- India-US relations

Changing geopolitical factors have accelerated further the deepening of India-US ties. The article analyses the current circumstances and evolution of the bilateral relations.

Background against which 2+2 dialogue taking place

  • The 2+2 dialogue between India and the United States in Delhi this week marks an important moment in bilateral relations.
  • The 2+2 dialogue comes just three weeks after the foreign ministers of the Quad — or the Quadrilateral Security Framework — met in Tokyo.
  • It also takes place amidst a profound structural shift in great power politics as well as turbulence in the international economic order intensified by the coronavirus pandemic.
  • The dialogue follows India’s first-ever participation in a meeting of the exclusive Five Eyes grouping that facilitates intelligence-sharing among the US, Canada, UK, Australia and New Zealand.
  • A few days ago, Delhi announced the much-awaited expansion of the annual Malabar exercises to include Australia.

Background of the past engagements

  • Signing the historic civil nuclear initiative ended India’s prolonged atomic isolation in the world laid the outline of a broader framework for security cooperation.
  • Due to the deep divisions within the national security establishment, the leadership and some political constraints faced by the government, the coalition broke up.
  •  The focus was on keeping visible distance from the US in the name of non-alignment, strategic autonomy, and the quest for a multipolar world.
  • The relationship survived those years, thanks to the US’s perseverance.

3 Factors responsible for rapid progress in the US-India ties

1) Chines aggression on northern border

  • The huge military crisis on the northern borders with China that is well into the sixth month is the first factor.
  • In the past, India avoided closer security ties with the US in deference to Beijing’s sensitivities.
  • In contrast, the government now has refused to pay heed to Chinese sensitivities over its policy on security cooperation with the US.

2) Disruption caused by the corona pandemic

  • The coronavirus has sharpened the US debate on the dangers of excessive economic interdependence on China.
  • Meanwhile, India has begun to reduce its commercial ties to Beijing in response to the PLA’s Ladakh aggression.
  • This has created the conditions for a new conversation between India and the US on rearranging global supply chains away from China.
  • So, the Quad Plus conversations have drawn in Brazil, Israel, New Zealand, South Korea and Vietnam with a view to rearrange the global supply chain.

3) Focus on critical technologies

  • Third factor is critical technologies like artificial intelligence that promise to transform most aspects of modern life — including security, political economy and social order.
  • Delhi and Washington are now focused on finding ways to collaborate on the critical technologies of the 21st century and work with their partners in setting new global rules for managing them.

Conclusion

As the regional and global order faces multiple transitions, the incentives for Delhi and Washington to sustain and advance India-US partnership are stronger than ever before and will continue into the next administration.

Foreign Policy Watch: India-United States

Why India should consider the next US administration’s approach to China

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- US Presidential election and Implications for India

Though it is the election held in the US for the election of the US President, it is closely followed throughout the world given the dominant position of that country in the world and impact of the US Presidents decision on the world. This article analyses the implications for India in both the scenarios re-election of Trump or Joe Biden winning the election.

Implications for India

  • Broader foreign policy decisions will have significant implications for India.
  • Particularly consequential will be how a second Trump administration or a Biden administration perceive and approach China and, relatedly, the question of America’s role in the world.
  • The outcome will depend on the choices that the next American president makes on key personnel and policies.

Analysing Trump administration’s approach to China from India’s perspective

  • The Trump administration’s more hawkish view of China broadly converges with Indian concerns about a rising China’s actions and intentions.
  • And it has facilitated the Trump administration to assign India an important role in its strategic framework, including through the Free and Open Indo-Pacific concept.
  • This has laid the basis for defence and security cooperation, helped to manage differences with Delhi on trade, Russia, Iran, and human rights, and vocal American support for India in the ongoing crisis with China.
  • Unlike India’s subtler approach to highlighting Beijing’s malign behaviour, the administration’s more explicit one has put a global spotlight on Chinese assertiveness.
  • However, there are aspects of President Trump’s China approach that have caused concerns in Delhi.
  • There has been concern about Trump striking a deal with Chinese leader Xi Jinping since summit in April 2017.
  • The administration subsequently pivoted to competition with China that summer.
  • Concerns have also been raised due to neglect in the Trump administration of developments related to Hong Kong, Xinjiang and Huawei/ZTE.
  • The other aspects of Trump’s China approach that have given Delhi pause are its ideological dimensions, as well as responses like tariffs that have hurt India too.
  • On the similar lines American withdrawal from international institutions and agreements that has served to benefit Beijing.
  • The China prism has had its limits — it has not, for instance, resulted in concessions to India on trade and immigration.

What would be Joe Biden’s to approach towards China and implications for India

  • And there is recognition among most Democrats that the US-China relationship today is different from what it was in 2009, 2012 or 2016.
  • An Obama administration China hand noted that opinion in the US on approach to China has “moved from balancing co-operation and competition, to competition and confrontation”.
  • But what a Biden administration sees as the terms of strategic competition with China and how it might choose to blend in cooperation will have implications for India.
  • Its outcome will depend in part on the president’s views, who holds key foreign and economic policy positions, as well as Beijing’s approach.
  • India will closely watch how Biden might respond to any overtures from Beijing.
  • It will particularly worry about any signs that Washington would be willing to limit competition or criticism in return for Chinese cooperation on certain administration priorities.
  • More broadly, it will look at whether Biden administration’s Asia policy derives from its China policy or vice versa.
  • Other aspects of Biden’s preferred approach might suit India, for instance:
  • 1) acting collectively with allies and partners rather than unilaterally,
  • 2) Not imposing tariffs that hit allies and partners along with China,
  • 3) Recommitting to international organisations in ways that could blunt Chinese influence.
  • India might also broadly approve of — and could benefit from — the 3Ds of a Biden foreign policy: Domestic (renewal), deterrence, and democracy.
  •  If a Biden administration sees engagement with China on climate change, global health security and non-proliferation as a priority that will complicate the Indian government’s options and require adjustments.
  • Moreover, with either Trump or Biden, foreign economic policy choices and budgetary ones for example, spending at home versus abroad will have crucial implications for India.

Conclusion

India will need to consider what America’s choice on November 3 will mean for American power and purpose — because assessments of that could determine how Beijing decides to act in the region and globally.

Foreign Policy Watch: India-United States

Importance of maritime domain for India and role of Quad in it

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Malabar Exercise, Quad

Mains level : Paper 2- Defining the roles and relations between Malabar and the Quad

While highlighting the importance of navy for India, the article examines the need to define the role and relation between the Quad and Malabar.

The salience of navy for India

  • It took confrontation in the Himalayas to bring focus on India’s maritime domain clearly indicates that the salience of maritime power is not yet understood in India.
  • On its northern and western fronts, India faces a formidable challenge and can at best hope for stalemate due to two factors :
  • 1) Economic, military and technological asymmetry between China and India.
  • 2) Active China-Pakistan nexus.
  • Attention has, therefore, been focused on the maritime domain, where it is believed that India may have some cards to play.
  •  While preparing to fight its own battles with determination, it is time for India to seek external balancing (read Quad) — best done via the maritime domain.

Evolution of Malabar Exercise

  • Above is the backdrop against which one must see the progressive evolution of Exercise “Malabar”,
  • At beginning, it was a bilateral event involving just the Indian and US navies.
  • It became tri-lateral with the inclusion of Japan in 2015.
  • And now it has transformed into a four-cornered naval drill that will also include Australia.
  • Apart from its geo-political significance for the Indo-Pacific, this development poses two conundrums.
  • Firstly, given the same composition, what is the distinction, now, between “Malabar” and the “Quad”?
  • Secondly, does Malabar 2020 mark the release of Australia from China’s thralldom?

Defining the roles and relation betwee Malabar and Quad

  • The Quadrilateral Security Dialogue or Quad has its roots in the Core Group of four senior diplomats representing the US, India, Japan and Australia.
  • The group was formed to coordinate relief efforts after the Great Asian Tsunami of December 26, 2004.
  • The present Quad has obviously retained this tradition and its members have neither created a charter nor invested it with any substance.
  • The Quad is 16 years old now, and Malabar 28.
  • Both have served a useful purpose, and a reappraisal of the roles and relationship of the Quad-Malabar concepts is, therefore, overdue.
  • Since it is India which faces a “clear and present danger”, it should boldly take the initiative to do so.

Need for the Indo-Pacific Concord

  •  In order to rein in China’s hegemonic urges, there is need for affected nations to come together to show their solidarity and determination in a common cause.
  • In this context, there is need to create a broad-based “Indo-Pacific Concord”, of like-minded regional democracies.
  • This should be an organisation with a maritime security charter, which has no offensive or provocative connotations.
  • Using the Quad and Malabar templates, a shore-based secretariat can be established in a central location like Port Blair, in the Andaman Islands, which would schedule and conduct periodic multinational naval exercises.
  • The exercises could be structured to hone the skills of participating navies in specialisations like humanitarian assistance and disaster relief, countering non-traditional threats, undertaking search-and-rescue operations and establishing networked maritime domain awareness.
  • The Concord could also designate forces to uphold maritime security or “good order at sea”.

What Australia joining Quad means

  •  The prospect of Australia belatedly joining the Quad is expected to reinforce the Quad and enhance its credibility.
  • But there are reasons for India to be circumspect it.
  • Memories are still alive of its past political ambivalence towards India, its criticism of our naval expansion and its vociferous condemnation of the 1998 nuclear tests.
  • Nor should one overlook Beijing’s recent influence on Australia’s foreign policy.
  • This influence on Australia’s foreing policy caused it to flip-flop over the sale of uranium to India as well as its peremptory withdrawal from the Quad in 2008.

Implications of singing of BECA with the U.S.

  • India signing the BECA (Basic Exchange and Cooperation Agreement) with the US last of the four “foundational agreements” would enhance interoperability between the respective militaries.
  • However, there is need to pay heed to two valid concerns:
  • 1) Regarding the possible compromise of information impinging on India’s security.
  • 2) Whether these agreements will barter away the last vestiges of India’s strategic autonomy.

Consider the question “The changing geopolitical equations has necessitated the formation of Indo-Pacific Concord by the democracies of the region.” In light of this, elaborate on India’s role in Quad and its implications for the region”

Conclusion

Indians, given our history, should never lose sight of the truism in international relations, that it is the unerring pursuit of national interests that guides the actions and policies of every nation.

Foreign Policy Watch: India-United States

In news: International Labour Organization

Note4Students

From UPSC perspective, the following things are important :

Prelims level : ILO

Mains level : India and ILO

After 35 years, India has assumed the Chairmanship of the Governing Body of International Labour Organization (ILO).

Try this PYQ:

Q.The Partnership for Action on Green Economy (PAGE), a UN mechanism to assist countries transition towards a greener and more inclusive economies, emerged at:

(a) The Earth Summit on Sustainable Development 2002, Johannesburg

(b) The United Nations Conference on Sustainable Development 2012, Rio de Janeiro

(c) The United Nations Framework Convention on Climate Change 2015, Paris

(d) The World Sustainable Development Summit 2016, New Delhi

About the International Labour Organization

  • The ILO is a UN agency whose mandate is to advance social and economic justice through setting international labour standards.
  • Founded in 1919 under the League of Nations, it is the first and oldest specialised agency of the UN.
  • The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
  • The ILO’s international labour standards are broadly aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity.

About its Governing Body

  • The Governing body is the apex executive body of the ILO which decides policies, programmes, agenda, budget and elects the Director-General.
  • It meets three times a year, in March, June and November.

Significance for India

  • India will be presiding over the upcoming meeting of the Governing Body to be held in November 2020.
  • India would have the opportunity to interact with the senior officials and social partners of the member states.
  • It will also provide a platform to apprise participants of the transformational initiatives taken by the Government in removing the rigidities of the labour market.

Foreign Policy Watch: India-United States

US Secretary of state Visit to India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CAATSA

Mains level : Paper 2- India-U.S. relations

Secretary of State, Mike Pompeo makes his way to India next week, exactly a week before the election. This article discusses the various aspects that could form the part of the discussion.

Difference in U.S’s and India’s position on Quad

  • He has stated that meeting in India “would include discussions about how free nations can work together to thwart threats posed by the Chinese Communist Party”.
  • Just a few weeks ago, at the Quad Foreign Ministers meeting, U.S. Secretary of State had called for collaboration to protect people and partners from the Chinese Communist Party’s exploitation, corruption, and coercion.
  •  In contrast, India has maintained that its membership of the Quad is aligned to its Indo-Pacific policy, and by no means directed against any country.
  • While Chines aggression is changing India’s priorities, any shift in India’s position on the Quad at the U.S.’s prompting must also benefit India.

What should be the part of U.S.-India collaboration

  • It is critical to study just how India hopes to collaborate with the U.S. on the challenge that Beijing poses on each of India’s three fronts: at the LAC, in the maritime sphere, and in the South Asian Association for Regional Cooperation (SAARC) region surrounding India.
  • On the maritime sphere, discussions will include strengthening ties in the Indo-Pacific, enhancing joint military exercises like the ‘Malabar’ and completing the last of the “foundational agreements” with the Basic Exchange and Cooperation Agreement for Geospatial Cooperation (BECA).
  • In Male, the U.S. has announced a defence agreement that will pave the way for a strategic dialogue.
  • And unlike in the past, India has not objected this agreement with Male for entering in its area of influence in the Indian Ocean Region, as it will allow the U.S. to counter Chinese influence there.
  • With Sri Lanka the U.S. is in discussions on infrastructure projects, and progress on its “Millenium Challenge Corporation” (MCC) offer of a five-year aid grant of about $480 million.
  • At a time when India is delaying Sri Lanka’s requests for debt relief, given its own economic constraints, the U.S. aid offer will be seen as one way of staving off China’s inroads into Sri Lanka.
  • Most important will be how the U.S. and India can collaborate on dealing with India’s most immediate, continental challenge from China: at the LAC.
  • Apart from enhancing and expediting U.S. defence sales to India, there is must the U.S. could promise to India.
  • The U.S. must also commit to keeping the pressure on Pakistan on terrorism, despite the U.S. need for Pakistan’s assistance in Afghan-Taliban talks.
  • A firm U.S. statement in this regard may also disperse the pressure the Indian military faces in planning for a “two-front” conflict with China.

Resolving other key issues with the U.S.

  • Resolution of Trade issues, an area the Trump administration has been particularly tough, and restoration of India’s Generalised System of Preferences status for exporters should also be priority.
  • The government could press for more cooperation on 5G technology sharing, or an assurance that its S-400 missile system purchase from Russia will receive an exemption from CAATSA sanctions.

Conclusion

By inviting Secretary of State this close to the U.S. elections, New Delhi has taken a calculated and bold gamble, however, our leaders must drive a harder bargain to consolidate the pay-offs from the visit.


Back2Basics: What is CAATSA?

  • The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a U.S. federal law that imposes economic sanctions on Iran, Russia and North Korea.
  • The bill came into effect on August 2, 2017, with the intention of countering perceived aggressions against the U.S. government by foreign powers.
  • It accomplishes this goal by preventing U.S. companies from doing business with sanctioned entities.

Foreign Policy Watch: India-United States

India becomes a member of UN Commission on Status of Women

Note4Students

From UPSC perspective, the following things are important :

Prelims level : UN Commission on Status of Women, ECOSOC

Mains level : Not Much

India has been elected as a member of the United Nation’s Commission on Status of Women (UN-CSW), a body of the Economic and Social Council (ECOSOC).

Try this PYQ:

Q.Democracy’s superior virtue lies in the fact that it calls into activity:

(a) The intelligence and character of ordinary men and women

(b) The methods for strengthening executive leadership

(c) A superior individual with dynamism and vision

(d) A band of dedicated party workers

UN Commission on Status of Women

  • The Commission on the Status of Women (CSW or UNCSW) is a functional commission of the UN Economic and Social Council (ECOSOC), one of the main organs within the United Nations.
  • CSW has been described as the UN organ promoting gender equality and the empowerment of women.
  • Every year, representatives gather at UN Headquarters in New York to evaluate progress gender equality, identify challenges, set global standards and formulate concrete policies to promote gender equality and advancement of women worldwide.
  • India will be a member of United Nation’s Commission on Status of Women for four years, 2021 to ‘25.
  • This year is the 25th anniversary of the famous Beijing World Conference on Women (1995).

Foreign Policy Watch: India-United States

Finding alternative to non-alignment

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NAM

Mains level : Paper 2- Finding alternative to non-alignment in India's foreign policy

The article analyses role of non-alignment in India’s foreign policy and India’s struggle to find the alternative to the non-alignment.

Background

  • Non-alignment was a policy fashioned during the Cold War, to retain the autonomy of policy between two politico-military blocs.
  • The Non-Aligned Movement (NAM) provided a platform for newly independent developing nations to join together to protect this autonomy.
  • NAM campaigned for de-colonisation, universal nuclear disarmament and against apartheid.
  • After the end of the Cold War, the NAM countries were able to diversify their network of relationships across the erstwhile east-west divide.

Non-alignment and India’s foreign policy in the present context

  • For a few years now, non-alignment has not been projected by our policymakers as a tenet of India’s foreign policy.
  • India has not yet found a universally accepted alternative to the non-alignment yet.
  • “Strategic autonomy” as an alternative soon acquired a connotation similar to non-alignment, with an anti-U.S. tint.
  •  Multi-alignment has not found universal favour, since it may convey the impression of opportunism, whereas we seek strategic convergences.
  • Seeking issue-based partnerships or coalitions is a description that has not stuck.
  • “Advancing prosperity and influence” was a description External Affairs minister settled for, to describe the aspirations that our network of international partnerships seeks to further.

Role of geography and politics

  • Two major imperatives flow from India’s geography-1) economic and security interests in the Indo-Pacific space. 2) the strategic importance of the continental landmass to its north and west.
  • The Indo-Pacific has inspired the Act East policy of bilateral and multilateral engagements in Southeast Asia and East Asia and the Pacific.
  • Shared India-U.S. interests in dealing with the challenge from China in the maritime domain have been a strategic underpinning of the bilateral partnership since the early 2000s.

Issues in India’s engagement with the U.S.

  • In the immediate-term, Indian and U.S. perspectives are less convergent in India’s continental neighbourhood.
  • Connectivity and cooperation with Afghanistan and Central Asia need engagement with Iran and Russia, as well as with the Russia-China dynamics in the region.
  • Russia extends to the Eurasian landmass bordering India’s near and extended neighbourhood.
  • A close Russia-China partnership should move India to broad-base relations with Russia.
  • A strong stake in relations with India could reinforce Russia’s reluctance to be a junior partner of China.
  • As the U.S. confronts the challenge to its dominance from China, classical balance of power considerations would dictate accommodation with Russia.
  •  U.S. should see ties with India as a joint venture not an alliance in which they could pursue shared objectives to mutual benefit and accept that differences of perspectives will have to be addressed.
  • This template could have wider applicability for bilateral relations in today’s world order, which former could be described as militarily unipolar, economically multipolar and politically confused. 
  • The U.S. could acknowledge that India’s development of trade routes through Iran which could provide it route to Afghanistan and Central Asia, bypassing Pakistan and Russia, respectively.

Consider the question “India has not been able to find an alternative to NAM which has been described as the basic tenet of India’s foreign policy. Discuss.”

Conclusion

India should find the alternative to the non-alignment which accommodate its interest in relations with the U.S. at the same time allow it “strategic autonomy”.

Foreign Policy Watch: India-United States

India’s strategic autonomy and its evolution

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Evolution of the idea of strategic autonomy

The article analyses the evolution of India’s approach to strategic autonomy from the unipolar world dominated by the U.S. to now when the Chinese threat has been looming large.

Context

  • Addressing a Southeast Asian forum last week, external affairs minister outlined India’s new quest for “strategic autonomy” in its global economic engagement.

Connection with Atmanirbhar Bharat

  • This new quest for “strategic autonomy” is the natural external complement to new economic strategy, described as “Atmanirbharata” or “self-reliance”.
  • The concept carries so much ideological baggage, its revival by Government inevitably raised many questions
  • Senior ministers and officials of the NDA government sought to reassure India’s partners that Delhi was not marching backwards.
  • When applied to the foreign policy framework, “self-reliance” becomes “strategic autonomy”.

Evolution of the idea of strategic autonomy

  • America towered over the world after the collapse of the Soviet Union in 1991.
  • India’s past emphasis on strategic autonomy was in the context of the “unipolar moment” [dominated by the U.S.] that emerged after the Cold War.
  • On the one hand, India needed Western capital as well as technology and better access to its markets.
  • On the other hand, Delhi had to protect some of its core national interests from the threats of US intervention.

India-U.S. Relations: Evolution after the Cold war

  • In the early 1990s, the Clinton Administration strong desire to resolve the Kashmir dispute between India and Pakistan.
  • The Clinton Administration saw the nuclear and Kashmir disputes as one and the same thing.
  • Indian diplomacy for the next two decades tried to change the US policy on both Kashmir and nuclear issues.
  • Under President George W Bush, the US discarded the long-standing temptation to insert itself in the Kashmir dispute.
  • The US also went out of the way to resolve the nuclear dispute with India by changing its domestic laws and international norms on nuclear proliferation.
  • The Obama and Trump Administrations have stayed the course since then.

China challenge for India

  • On the atomic front, as the US sought to lift the prolonged atomic blockade against India, China sought to block the process.
  • China turned an obstacle to India’s membership of the Nuclear Suppliers Group.
  • China takes up the Kashmir issue regularly in the United Nations Security Council.
  • Today, India’s strategic autonomy is about coping with China’s challenge to India’s territorial integrity and sovereignty.
  •  China today is viewed in Delhi as a major threat to India’s economic development.
  • The bilateral trade deficit reached nearly $55billion in 2019.
  • India pulled out of an Asia-wide free-trade arrangement called the Regional Comprehensive Economic Partnership late last year, sensing the threat posed by China-led economic order.
  • Ladakh aggression forced India to go from a passive commercial withdrawal to an active economic decoupling from China.

Way forward

  • The logic of strategic autonomy from China nudges India to look for strong security partnerships with the US, Europe, Japan and Australia.
  • On the economic front, India is exploring various forms of collaboration with a broad group of nations that have a shared interest in developing trustworthy global supply chains.

Consider the question “Delineate the evolution of India’s approach towards the idea of strategic autonomy. How it differs from the past?”

Conclusion

Threats to either territorial integrity or economic prosperity are powerful enough on their own to compel drastic changes in any nation’s policies. Coming together, they promise to make strategic autonomy from an assertive China an enduring theme of India’s economic and foreign policies in the years ahead.

Foreign Policy Watch: India-United States

Strategic autonomy in foreign policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Strategic autonomy and alignment with the U.S.

India has been maintaining strategic autonomy in its foreign policy since Independence. But the end of Cold War and growing closeness towards the U.S. raises concerns. This article addresses this issue.

India’s foreign policy: characterised by autonomy

  • India has historically prided itself as an independent developing country which does not take orders from or succumb to pressure from great powers.
  • Indian maintained this stance in its foreign policy when the world order was bipolar from 1947 to 1991, dominated by the U.S. and Russia.
  • Also, when the world was unipolar from 1991 to 2008, dominated by the U.S.
  • Or when it is multipolar as at the present times.
  • The need for autonomy in making foreign policy choices has remained constant.

Flexibility in foreign policy

  • However, strategic autonomy has often been adjusted in India’s history as per the changing milieu.
  • During the 1962 war with China, Prime Minister Nehru, had to appeal to the U.S. for emergency military aid.
  • In the build-up to the 1971 war with Pakistan, Prime Minister Indira Gandhi had to enter a Treaty of Peace, Friendship and Cooperation with the Soviet Union to ward off both China and the U.S.
  • And in Kargil in 1999, India welcomed a direct intervention by the U.S. to force Pakistan to back down.
  • In all the above examples, India did not become any less autonomous when geopolitical circumstances compelled it to enter into de facto alliance-like cooperation with major powers.
  • Rather, India secured its freedom, sovereignty and territorial integrity by manoeuvering the great power equations and playing the realpolitik game.

Concerns over India’s growing closeness to the U.S.

  • As India is facing China’s growing aggression along the LAC, Non-alignment 2.0 with China and the U.S. makes little sense.
  • Fears that proximity to the U.S. will lead to loss of India’s strategic autonomy are overblown.
  • Because independent India has never been subordinated to a foreign hegemon.

What should be India’s strategy

  • In the threat environment marked by a pushy China, India should aim to have both- American support and stay as an independent power centre by cooperation with middle powers in Asia and around the world.
  • For India complete dependence on the U.S. to counter China would be an error.
  • Such complete dependence would be detrimental to India’s national interest such as its ties with Iran and Russia and efforts to speed up indigenous defence modernisation.
  • A wide and diverse range of strategic partners, including the U.S. is the only viable diplomatic way forward in the current emerging multipolar world order.

Consider the question “Does India’s close alignment with the U.S. harms its strategic autonomy? Suggest the strategy to balance India’s security concerns and maintaining strategic autonomy.”

Conclusion

We are free and self-reliant not through isolation or alliance with one great power, but only in variable combinations with several like-minded partners. India is familiar with the phrase ‘multi-vector’ foreign policy. It is time to maximise its potential.

Foreign Policy Watch: India-United States

A new direction for India-U.S. ties

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- India-U.S. ties

This article analyses what the new shift in the India-U.S. ties will require for the mutual benefit.

Following 12 factors would influence the depth and longevity of the India-U.S. ties.

1) Outcome of the  U.S. Presidential elections

  • The success of India’s new bonding with the U.S. will depend on the outcome of the U.S. Presidential elections.
  • The Democratic party candidate with the Left wing and liberals in the U.S. has been highly critical of the Citizenship (Amendment) Act.

2) Need to build trust with the U.S.

  • India purchased of the S-400 air defence missile system from Russia disregarding the U.S. concerns.
  • India refused to send Indian troops to Afghanistan.
  • We need to build trust with the U.S. that we will give to the U.S. as good as it gives us.
  • For this structuring we must realise that India-U.S. relations require give and take on both sides.
  • What India needs to take today is for dealing with the Ladakh confrontation with China.
  • India needs U.S. hardware military equipment.

3)  Fighting the U.S. enemy in neighbourhood

  • The U.S. needs India to fight her enemies in the neighbourhood such as in Afghanistan.
  • India should send two divisions gradually to Afghanistan and relieve U.S. troops to go home

4) Intelligence sharing and cooperation

  • India needs the support of the U.S. and its ally, Israel, in cyberwarfare, satellite mappings of China and Pakistan.
  • There is a need for sharing intercepts of electronic communication, hard intelligence on terrorists, and controlling the military and the Inter-Services Intelligence in Pakistan.

5) Developing naval bases

  • India needs the U.S. to completely develop the Andaman & Nicobar, and also the Lakshadweep Islands as a naval and air force base.
  • These naval bases can be used by the U.S  and shared along with its allies such as Indonesia and Japan.

6) Economic relations and India’s concerns

  • The economic relations must be based on macroeconomic commercial principles.
  • Free, indiscriminate flow of U.S. foreign direct investment (FDI) is not in India’s national interest.

7) Technology sharing

  • India needs technologies such as thorium utilisation, desalination of sea water, and hydrogen fuel cells.

8) U.S. should allow import of agricultural product

  • The U.S. must allow India’s exports of agricultural products including Bos indicus milk, which are of highly competitive prices in the world.

9) FDI in India

  • FDI should be allowed into India selectively from abroad, including from the U.S.
  • FDI in India should be based on the economic theory of comparative advantage and not on subsidies and gratis.

10) Tariffs

  • Tariffs of both India and the U.S. should be lowered, and the Indian rupee should be gradually revalued to ₹35 to a dollar.
  • Later, with the economy picking up, the rupee rate should go below 10 to the dollar.

11) Stay away from certain issues

  •  India should not provide the U.S. with our troops to enter Tibet, or be involved in the Hong Kong and Taiwan issue.
  • There is always a possibility of a leadership change in China.
  • Thus, China’s policy changed very favourably towards India.
  • In the cases of Tibet, Taiwan, and Hong Kong, we have made explicit agreements.
  • In the case of Tibet, two formal treaties were signed by Nehru (1954) and A.B. Vajpayee (2003).

12) Trilateral commitment to world peace

  • In the long run, India, the U.S., and China should form a trilateral commitment for world peace provided Chinese current international policies undergo a healthy change.

Consider the question “What are the factors influencing the India-U.S. ties? Suggest the pathway to address the issues that hamper the deepening of India-U.S. ties.”

Conclusion

Both countries need to recognise each other’s concern and work towards the deepening of the ties for the mutual benefit and with a view to dealing with the challenges confronting both the countries.

Foreign Policy Watch: India-United States

Global coalition of democracies amid Chinese assertion

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Global coalition of democracies

In the recent speed Mike Pompeo, the US Secretary of State, floated the idea of an ‘alliance of democracies’. This article discusses its implications for India.

Two propositions on China

  • The US Secretary of State laid out two propositions.
  • One is that nearly five decades of US engagement with China have arrived at a dead-end.
  • Second is that the US can’t address the China challenge alone and called for collective action.
  • He mused on whether “it’s time for a new grouping of like-minded nations, a new alliance of democracies.”

How it matters for India?

  • Both the propositions signal the breakdown of the relationship between the world’s two most important powers.
  • They also reflect on the need to create new frameworks to cope with emerging global challenges.
  • China, is a large neighbour of India and America, is India’s most important partner makes the new context rather different from the Cold War.

Concerns for India in the propositions

  •  Many in Delhi would like to know if the current direction of China policy will endure if Joe Biden wins the presidential election in November.
  • India must pay close attention to the unfolding China debate in the US.
  • India also note the structural changes in American engagement with China over the last two decades.
  •  Delhi will certainly avoid calling the group proposed by US Secretary of State an “alliance”.
  • India would rather have it described as a “coalition of democracies”.

Idea of ‘Coalition of democracies’

  • Over the last many years, India has become comfortable with the idea of a political partnership with the world’s leading democracies.
  • India also supported past US initiatives like-Clinton Administrations “Community of Democracies”, Bush Administrations democracy promotion fund at the UN.
  • Delhi has also welcomed President Trump’s initiative to convene an expanded gathering of the G-7 leaders.
  • The idea of democracies working together has an enduring appeal for the US.
  • India figures in this American vision is relatively new. So is Delhi’s readiness to reciprocate.

Consider the question “In the ongoing geopolitical situation the U.S. has proposed the idea of ‘alliance of democracies’. Where does India feature in this vision and what are the implications of it for India.”

Conclusion

Constructing a global coalition of democracies will take much work and quite some time. But engaging with that initiative, amidst the rise and assertion of China, should open a whole range of new possibilities for Indian foreign and security policies.


Original article:

https://indianexpress.com/article/opinion/columns/us-india-democracy-china-cold-war-global-economy-6526409/

Foreign Policy Watch: India-United States

U.S. stance on CAATSA unchanged

Note4Students

From UPSC perspective, the following things are important :

Prelims level : CAATSA, COMCASA, LEMOA agreements

Mains level : India-US relations

Recently India had planned for the purchase of Mig-19 fighter aircraft with Russia at an estimated Rs. 18,148 crore. The U.S has reacted to countries, including India, on sanctions for the purchase of Russian arms has not changed.

Practice question for mains:

Q.What is CAATSA law? Discuss how it will impact India’s ties with Russia.

About CAATSA

  • CAATSA stands for Countering America’s Adversaries through Sanctions Act (CAATSA).
  • It is a US federal law that imposed sanctions on Iran, North Korea, and Russia.
  • The bill provides sanctions for activities concerning:

(1) cybersecurity, (2) crude oil projects, (3) financial institutions, (4) corruption, (5) human rights abuses, (6) evasion of sanctions, (7) transactions with Russian defence or intelligence sectors, (8) export pipelines, (9) privatization of state-owned assets by government officials, and (10) arms transfers to Syria.

A cause of worry

  • While the US has become its second-largest defence supplier, mainly of aircraft and artillery, India still relies heavily on Russian equipment, such as submarines and missiles that the US has been unwilling to provide.
  • Seventy per cent of Indian military hardware is Russian in origin.
  • India is set to receive the S-400 Triumf air defence system.

Is India the only country facing CAATSA sanctions?

  • Notably, Russia is India’s major defence supplier for over 6 decades now, and Iran is India’s second-largest oil supplier.
  • By coincidence, CAATSA has now been invoked by the US twice already, and both times for countries buying the Triumf system from Russia.
  • In September 2018, the US announced sanctions for the procurement of the S-400 Triumf air defence system and Sukhoi S-35 fighter aircraft.
  • Washington expelled Turkey from the F-35 fighter jet programme in July this year after the first delivery of S-400s was received.
  • India is neither like China, which has an inimical relationship with the U.S., and hence not bound by its diktats, nor like Turkey which is a NATO ally of the US.

Foreign Policy Watch: India-United States

Private: H-1B Visas Temporarily Suspended

Note4Students

From UPSC perspective, the following things are important :

Prelims level : H1B visa basics

Mains level : Indo-US Relations

  • The US President Donald Trump has issued a presidential proclamation announcing his decision to suspend certain categories of non-immigrant visas including the coveted foreign work visas such as the H-1B, H-4, H-2B visa, J and L visas till December 31, 2020.
  • It will come into effect from June 24.

What are these non-immigration H-1B, H-2B, L and other work visas?

  • To fill a vacuum of highly-skilled low-cost employees in IT and other related domains, the US administration issues a certain number of visas each year which allows companies from outside the US to send their employees to work on client sites.
  • When a person travels to the US with a non-immigrant visa, then he/she has to depart from the US by the date of visa expiration. It allows one to work for a specific employer only. 

H1B Visa

    • It is most popular among Indian IT companies. Issued for a period of 3 to 6 years.
    • Meant for persons in Specialty Occupation: to work in a specialty occupation, one requires a higher education degree or its equivalent.
    • The total number of H-1B visas issued annually: 85,000.
    • Of these, 65,000 H-1B visas are issued to highly skilled foreign workers, while the rest 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or master’s degree from an American university.
    • Indian nationals have been receiving about 70% of these work permits, the majority of them, software engineers working for technology companies.
    • H-1B visa holders who are currently not in the US can still re-enter the country. This visa ban also does not impact people waiting for visa renewals who are already in the US.

H2 B Visa

    • It permits employers to hire foreign workers to come temporarily to the United States and perform temporary nonagricultural services or labor on a one-time, seasonal, peak load or intermittent basis.
    • H-2B visa holders are allowed for one year, with renewal for two years.

L Visa

    • Meant to transfer candidates who already work for a foreign branch of a US-based company, or are planning to open operations in the US of a foreign-based company.
    • Holders are granted an initial three years of stay in the U.S, which is subject to further extension up to 7 years.

The key difference between H1B and H1B1 visas: 

    • H-1B visa permits for “dual intent” which means that a foreign national will be coming to work in a professional position temporarily while also intending to immigrate to the United States at some point in time in the future. H-1B visa holders can apply for permanent residency by applying for a green card.
    • H1B1 visa applicants, however, have to demonstrate that they do not intend to immigrate to the United States at all.

Is this visa suspension an economic initiative or a political agenda? 

  • Immigration policy experts and lawyers have said that it appears to be driven more by political considerations than economic ones as it is a mere reflection of Trump’s ‘buy American, hire American’ stance.
  • Trump, who won the first term on the back of anti-immigration rhetoric, has encouraged policies that have favoured US technology companies for H-1B visas as against the traditional Indian IT companies.
  • In January 2017, after taking over as the president of the US, Trump had hinted that the low-cost workers were hampering the economy and undercutting the jobs of citizens.
  • The US had then hinted at reforming the “broken” H-1B visa system.
  • According to the US Bureau of Labour Statistics – While overall unemployment has risen from 4% in January 2020 to 13.5% in May 2020 – In Computer Occupations it has come down from 3% in January 2020 to 2.5% in May 2020. Presently, 625000 job vacancies are still available.
  • This shows that in the IT sector the skill scarcity is so high that the “unemployment reason” being cited is not at all economically justified.
  • In the opinion of political analysts – Trump seized the opportunity provided by the economic contraction due to Covid-19 by first banning the entry of non-immigrant workers till June 23, and then extending it till December 31.

The Response of Indian Tech Giants

  • Indian tech companies like Infosys, Wipro and TCS are progressively ramping up their presence in the US by stepping up local hiring, either setting up local innovation centres or tying up with local universities to work in newer technology areas. 
  • These companies are associating with local technical varsities to help in promoting STEM (Science, Technology, Engineering and Math) education.
  • A recent announcement was made by Infosys, India’s second-largest IT services company, that it will open its next technology and innovation centre in Hartford, Connecticut, the second of four such units in the US, and hire 1,000 American workers in the state by 2022.
  • Cognizant,  recently formed a $100-million non-profit foundation to support STEM, digital education and skills initiatives for US workers and students.
  • Tata Consultancy Services (TCS) has recently given a grant of $35 million to Carnegie Mellon University to fund a new facility and student scholarships.

What are the disadvantages of this move to the US tech sector?

According to expert estimates, this policy on work visas is only going to hurt the US’s own competitiveness, inhibit economic investment, and have a counterproductive effect:

  • Reduce productivity of American workers: Skilled workers that have been travelling to the US  under the H-1B visas and L-1 one visas have also enabled the necessary talent to go in and augment American workers in support of specialised technology fields, which will now come to an end.
  • Many of the companies that utilise H-1B workers are also using and creating training programmes to create integrated teams that can support the work and which can train more American workers in the skills that are necessary for high skilled IT jobs. This is a major loss to the US economy.
  • Divert skilled work-force to other countries: Such politically motivated policy will likely divert highly talented STEM-educated workforce to other high growth countries.
  • Offshore work: Industry body Nasscom opines – “The move is misguided and harmful to the US economy and it could possibly force more work to be performed offshore since the local talent is not available in the country”.
  • Effect R&D sector: Lack of talent being flown in would negatively impact Research & Development in the US tech sector.

Challenges caused to Indian IT Sector

  • Adversely affect New workers and dependents: Foreign nationals outside the US, who were to begin work on an H-1B visa or even L-1 visas (intra-company transfer) – but do not as yet hold a valid visa, as well as dependents who were to accompany them (be it spouses or dependent children) will have to wait longer, till the ban expires.
  • H-2B aspirants and select category of J-1 exchange program participants (interns, trainees, teachers, camp counsellors and summer work travel participants) who are outside the US and are not holding a valid visa will also be impacted by the ban.
  • As per the United States Citizenship and Immigration Services (USCIS) – typically between 60-70 percent of the new H-1B visas are issued to Indians, the sponsoring employers comprise both MNCs and Indian headquartered companies, with the former hiring in larger numbers in fact. “This ban disproportionately impacts Indian nationals.”
  • L-I visa applicants do not even directly compete with the US workforce as they are foreign executives, managers or specialised knowledge employees of global and international organizations being transferred to the related US entity. It does not make sense to suspend their entry.
  • The marginal and low wage employees are to be the worst hit by the changes brought about in the H1B1 visa system.

Benefits of the move for the Indian tech industry

  • Newer opportunities for Indian high skilled workers in the IT sector in other countries outside of the US – NASSCOMs Virtual Trade Mission To Canada during 22-25 2020 – The program was a first-of-its-kind opportunity to understand Canada’s rich tech and innovation ecosystem. It was participated by 63 member companies.
  • Reverse Brain gain: H1B1 has drawn away the best talent from India for decades. This move may cause reverse brain gain for better growth of the Indian tech industry.
  • R&D: Better Innovation, Research & Development for nurturing the growing start-up sector in India.
  • Most of the companies have become capable of handling their work remotely in the wake of the COVID-19 pandemic. This has provided resilience to the Indian tech sector against international mobility restrictions.

Will this move impact the bilateral ties between India & the US? 

  • The freezing of non-immigration work visas is more of a US election-related issue rather than an indication of any mutual problems between India and the US.
  • India & US share global strategic partnership, based on shared democratic values and similarity of interests on bilateral, regional and global issues.
  • However despite this strong bond and despite hectic talks at diplomatic levels between India and the US, the Trump administration decided in favour of implementing the ban.
  • The issue becomes a sensitive one as US cooperation becomes strategically necessary for India amid its border tensions with China and ongoing skirmish with Pakistan.
  • Nasscom has been seeking exemptions for Indian tech workers on grounds that they come under the category of essential workers.

Foreign Policy Watch: India-United States

UN Arms Trade Treaty (ATT)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : UN Arms Trade Treay

Mains level : Arms Trade Treay and its significance

China will join a global pact to regulate arms sales that has been rejected by the United States.

The New START, INF, Open Skies and now the ATT …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.

What is the Arms Trade Treaty?

  • The Arms Trade Treaty is a multilateral treaty that regulates the international trade in conventional weapons. It entered into force on 4th December 2014.
  • The ATT is an attempt to regulate the international trade of conventional weapons for the purpose of contributing to international and regional peace; reducing human suffering; and promoting co-operation, transparency, and responsible action by and among states.
  • 105 states have ratified the treaty, and a further 32 states have signed but not ratified it.
  • India has abstained from voting for this Treaty

Highlights of the treaty

ATT requires member countries to keep records of international transfers of weapons and to prohibit cross-border shipments that could be used in human rights violations or attacks on civilians. The treaty would ensure that no transfer is permitted if there is a substantial risk that it is likely to:

  • be used in serious violations of international human rights or humanitarian law, or acts of genocide or crimes against humanity;
  • facilitate terrorist attacks, a pattern of gender-based violence, violent crime, or organized crime;
  • violate UN Charter obligations, including UN arms embargoes;
  • be diverted from its stated recipient;
  • adversely affect regional security; or
  • seriously impair poverty reduction or socioeconomic development.

China’s agenda at ATT

  • Beijing saying it is committed to efforts to “enhance peace and stability” in the world.
  • It comes after the US announced plans last year to pull the United States out of the agreement which entered into force in 2014.
  • The US Senate never ratified the 2013 Arms Trade Treaty after former president Barack Obama endorsed it, and Trump has said he would revoke his predecessor’s signature.

Why has India abstained?

  • From the beginning of the ATT process, India has maintained that such a treaty should make a real impact on illicit trafficking in conventional arms and their illicit use especially by terrorists and other unauthorized and unlawful non-state actors.
  • India has also stressed consistently that the ATT should ensure a balance of obligations between exporting and importing states.
  • However, the ATT is weak on terrorism and non-state actors (undoubtedly Pakistan) and these concerns find no mention in the specific prohibitions of the Treaty.
  • Further, India cannot accept that the Treaty is used as an instrument in the hands of exporting states to take unilateral force majeure measures against importing states parties without consequences.

Also read:

U.S. set to exit the ‘Open Skies Treaty’ Copy

Foreign Policy Watch: India-United States

The 5G Club ‘D10’

Note4Students

From UPSC perspective, the following things are important :

Prelims level : D10 Club

Mains level : Not Much

Britain said that it was pushing the U.S. to form a club of 10 nations that could develop its own 5G technology and reduce dependence on Huawei.

We can expect prelims question asking the purpose of the D10 group like-

Q. The D10 Club recently seen in news is a- Environment NGO/ Group of Democracies/ etc.

The D10 Club

  • The Britain is proposing a ‘D10’ club of democratic partners that groups the G7 nations with Australia and the Asian technology leaders South Korea and India.
  • It would include G7 countries – UK, US, Italy, Germany, France, Japan and Canada – plus Australia, South Korea and India.
  • It is aimed for channelling investments into existing telecommunication companies within the 10 member states.
  • The group aim to create alternative suppliers of 5G equipment and other technologies to avoid relying on China.

Ruling out Huawei

  • Britain has allowed the Chinese global leader in 5G technology to build up to 35% of the infrastructure necessary to roll out its new speedy data network.
  • But their PM Boris Johnson was reported to have instructed officials to draw up plans to cut Huawei out of the network by 2023 as relations with China sour.

Foreign Policy Watch: India-United States

U.S. set to exit the ‘Open Skies Treaty’ Copy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : OST, INF Treaty, New START policy

Mains level : US-Russia power tussle

The U.S. has given notice that it will exit the Open Skies Treaty (OST) in response to Russia who had allegedly violated the treaty.

The New START, INF and now the OST …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.

Open Skies Treaty (OST)

  • OST is an agreement that allows countries to monitor signatories’ arms development by conducting surveillance flights over each other’s territories.
  • The idea behind the OST was first proposed in the early years of the Cold War by former U.S. President Dwight Eisenhower.
  • It came to existence decades later and was signed in 1992, during the George H.W. Bush presidency and after the Soviet Union had collapsed.
  • The OST came into effect in 2002 under the George W. Bush administration and it allows its 34 signatories to conduct unarmed reconnaissance flights over the territory of treaty countries.

Issues with the OST

  • The U.S. has used the treaty more intensively than Russia.
  • Between 2002 and 2016, the U.S. flew 196 flights over Russia (in addition to having imagery from other countries) compared to the 71 flights flown by Russia.

Significance

  • The U.S.’s exit last year from other arms deal the West had signed with Russia — the Intermediate-Range Nuclear Forces (INF) treaty — as well as its imminent departure from the OST has raised the strong possibility that the Trump administration may not renew the New Start Treaty.
  • The New START Treaty was signed by the Obama administration with Russia that caps Russian and U.S. nuclear arsenal. The New Start Treaty is due to expire in February 2021.
  • The Trump administration has been worried that extending New START would negatively impact an arms deal with China and Russia.
  • It is concerned that China’s nuclear stockpile could be doubled if the New Start Treaty continued as is, without including China.

Back2Basics: New START pact

  • The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
  • The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
  • It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
  • It is one of the key controls on superpower deployment of nuclear weapons.
  • If it falls, it will be the second nuclear weapons treaty to collapse under the leadership of US President Donald Trump.
  • In February 2019, the US withdrew from the 1987 Intermediate-Range Nuclear Forces Treaty (INF), accusing Moscow of violating the agreement.

INF Treaty

  • Under the INF treaty, the US and Soviet Union agreed not to develop, produce, possess or deploy any ground-based ballistic and cruise missiles that have a range between 500 and 5,500 km.
  • It exempted the air-launched and sea-based missile systems in the same range.
  • The INF treaty helped address the fears of an imminent nuclear war in Europe.
  • It also built some trust between Washington and Moscow and contributed to the end of the Cold War.

Foreign Policy Watch: India-United States

Why US’s offer of financial aid to Greenland has angered Denmark?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Greenland and its geographical features

Mains level : Neo-imperialism and its re-emergence

Context

  • The US had last year sent a proposal to “purchase” Greenland from the Nordic nation.
  • This proposal follows plans by the US government to open a consulate in Nuuk, Greenland’s capital.
  • This move is being considered to be “extremely provocative” interference by the US.

Go for a detailed map reading of the Arctic region. It has been in news for several times this year.

Why is the US opening a consulate in Greenland?

  • The US is opening a consulate in Greenland after nearly seven decades of closing its first consulate after the Second World War.
  • Russia has been steadily expanding its military presence in the Arctic and China has done its bit on the economic front.

US’s interests in Greenland

1) Domestic interest

  • The US claims that its aid is to ensure “sustainable growth” in the autonomous island.
  • It also cited Russia’s “aggressive behavior and increased militarisation in the Arctic” and China’s “predatory economic interests” as reasons for the decision.
  • The US acquiring new territory under Trump would appeal to the nationalistic and imperialistic views of Americans.
  • Acquiring Greenland would also secure Trump’s position in US history of having been the third president to add land to the country’s territory.

2) Strategic interest

  • Due to climate change, the Arctic ice is melting at an accelerated rate, opening up water routes for military and maritime trade.
  • This is in addition to global superpowers and regional players vying for control over Greeland’s vast untapped natural resources.

3) Economic interest

  • Greenland is also a resource-rich landmass, strategically located between the Arctic Sea and the Atlantic Ocean, with some of the largest deposits of rare-earth metals, including iron-ore, uranium, and by-products of zinc, neodymium, praseodymium, dysprosium and terbium.
  • These rare-earth metals are used in the production of electric cars, mobile phones and computers.
  • For the longest time, China has been the world’s largest supplier of these rare-earth metals and has expanded its acquisitory plans by excavating mines across the African continent.
  • An acquisition of Greenland would make the US less reliant on China for these rare-earth metals.
  • Greenland, as a part of the Arctic region, also has large deposits of undiscovered oil and gas, resources that the US always wants more of.

The US obsession

  • Trump’s interest in Greenland is almost an extension of his world view and US foreign policy in his administration.
  • Purchasing another country or territory is unusual, but the US government has done this twice before.
  • Erstwhile President Thomas Jefferson acquired Louisiana from the French in 1803 and the second time when President Andrew Johnson purchased Alaska from Russia in 1867.

Back2Basics: Greenland

  • Greenland is the world’s largest island located between the Arctic and Atlantic oceans, east of the Canadian Arctic Archipelago.
  • It is an autonomous territory within the Kingdom of Denmark.
  • Though physiographically a part of the continent of North America, Greenland has been politically and culturally associated with Europe
  • The majority of its residents are Inuit, whose ancestors migrated from Alaska through Northern Canada, gradually settling across the island by the 13th century.

Foreign Policy Watch: India-United States

[pib ] Indo-U.S. Science and Technology Forum

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IUSSTF

Mains level : India-US collaboration in STEM

Indian students will undertake a research internship at Viterbi School of Engineering, University of Southern California, LA, USA under the IUSSTF Program.

What is IUSSTF?

  • IUSSTF is an acronym for the Indo-U.S. Science and Technology Forum.
  • It is established under an agreement between the Governments of India and the USA in March 2000.
  • It is an autonomous bilateral organization jointly funded by both the Governments that promote Sci-Tech, Engineering and Innovation through substantive interaction among government, academia and industry.
  • The Department of Science & Technology, Governments of India and the U.S. Department of States are respective nodal departments.

About Viterbi Program

  • The Viterbi Program of IUSSTF was developed between IUSSTF and the Viterbi School of Engineering, University of Southern California (USC).
  • This program is a part of the Government’s endeavour to encourage research and development amongst the bright young Indian minds to create long-term, sustainable, and vibrant linkages between India and the US.

Foreign Policy Watch: India-United States

The ambit and the limits of ‘diaspora diplomacy’

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Indian diaspora and limits on its ability to influence.

Context

It is necessary for New India to look at the political choices of Indian migrants abroad through a more realistic lens.

Indian diaspora

  • Largest diaspora and highest remittances: India has the world’s largest diaspora, about 17.5 million and receives the highest remittance of $78.6 billion from Indians living abroad (Global Migration Report 2020).
  • Impact of the diaspora back home: Members of the diaspora, often seen as more “successful” and therefore more influential, can have a big impact on their relatives back home.

Certain wrong premises: The promise of the diaspora’s dual power is based on certain faulty premises.

1. Transferability of vote: To start with, the transferability of votes has not yet been proven conclusively.

    • It is necessary and timely that the government re-analyses the benefits accrued from the diaspora’s political presence through a more realistic lens.
    • One obvious reason is that the Indian community isn’t large enough to make a difference in the voting patterns in any of these countries.
    • The second is that the population that comes out for the rallies doesn’t represent the entire diaspora.

2. Not necessarily support the government: The second issue is that politically active members of the Indian diaspora don’t necessarily support the Indian government’s actions, and often because they are of Indian origin, hold the government in New Delhi to higher standards than they do others.

  • Concern over CAA and Kashmir Issue: The U.S. House Foreign Affairs Committee Chairperson for Asia, Ami Bera, voiced his concerns quite plainly about Kashmir and Citizenship (Amendment) Act (CAA) during a visit to India last month.
  • Criticism of the government actions: The sponsor of the U.S. House resolution on Kashmir (HR745) Pramila Jayapal; co-chair of U.S. Presidential candidate Bernie Sanders’s campaign Ro Khanna; and former presidential contender Kamala Harris, have all been openly critical of the government’s actions.

What should the government do? The conclusion for the government is that it cannot own only that part of the diaspora that supports its decisions, and must celebrate the fact that members of the Indian diaspora, from both sides of the political divide, are successful and influential.

3. Diaspora as a factor in bilateral relation: The government must ensure that its focus on the diaspora doesn’t become a factor in its bilateral relations.

  • While it is perfectly legitimate and laudable to ensure the safety and well-being of Indian citizens in different parts of the world, it must tread more lightly on issues that concern foreign citizens of Indian origin.

4.Introduction of India’s internal politics:

  • The introduction of India’s internal politics into this equation is another new angle, one that led the British Foreign Office to remonstrate with India about interference last December.
  • Politically affiliated Indian diaspora chapters are now also playing old India-Pakistan fault-lines amongst immigrants, which in the past were fuelled by Pakistani agencies.
  • In California primaries this month, local “Hindu-American” groups protested against Democratic candidates like Ro Khanna for joining the Congressional Pakistan caucus and for criticising New Delhi’s actions.

5. Impact on diaspora:

  • Conflating POI with citizens of India: The government must consider the impact that policies conflating the PIOs with Indian citizens could have on the diaspora itself.
  • Ability to assimilate: Most immigrant Indian communities have been marked by their ability to assimilate into the countries they now live in.
  • Much of that comes from a desire to be treated as equal citizens, not as immigrants, while a few also have bad memories of anti-immigrant sentiments in the 1960s and 1970s in Europe and the U.S. when they were targeted and accused of “divided loyalties”.

Conclusion

Laying claim to diasporas kinship and culture and taking pride in their success is one thing. It would be a mistake to lay claim to their politics, however.

 

Foreign Policy Watch: India-United States

After the Trump visit

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- India-US relations.

Context

President Trump’s visit had the right optics. Attention must now turn to India-US priority areas.

What were the mutual gains and highlights of the visit?

  • Security: Homeland Security is an American expression. For us to own it shows our concerns on cross-border sponsored terrorism.
  • Nuclear technology: Our nuclear VVER power plant technologies are state of the art and of Russian and French design.
    • Fast breeder: Good, but one more is better. We are well on the way to the fast breeder on the thorium route and these nuclear turbines are an essential step.
    • Unlimited thorium: We don’t have much uranium but unlimited thorium, so in the long run, apart from solar, this is the energy future.
    • Insurance obstacle resolved: Obviously, the insurance obstacle, as to who will bear the cost of insurance against disaster damage, which the Americans were raising earlier, has been resolved.
    • We have to build nuclear power to provide the initial feedstock for the thorium-based reactors.
  • No progress on trade pact: There are obviously differences between the two nations on the trade pact.
    • There is “progress”, but otherwise, we don’t know the way forward. Since the event was Ahmedabad-based, Amul is invading America and dairying is real politics.
  • US concerns over Kashmir issue: The US concern on Kashmir and minority rights is real.
    • If the largest foreign office establishment in the world is raising issues through their chief, let’s not bury our head in the sand.
    • Our defence minister expressing sadness at former chief ministers of Jammu and Kashmir being in detention was a gesture to the US President’s stand on pursuing solutions.
  • The bipartisan foreign policy of India shifting: The Americans generally rally behind the President on foreign policy.
    • We are more advanced now and have kicked a bipartisan approach to foreign affairs.
    • Seven decades of a bipartisan policy are thrown away without a word in explanation.

Challenges to the rights in India

  • Every right is tampered with. Your religion, your identity in a country that never questioned it, you name it, it’s in question.
  • Multiple identity cards not accepted: The Aadhaar card, passport, ration card, election card are not enough. One office doesn’t accept another’s card, even if they carry the same information.
  • A study on a ration card and election cards: A study funded by the Canadian IDRC showed the poor only keep under lock and key the ration and election cards. One saves them from starvation, the other gives them dignity. At least once every five years, the mightiest knock at their door. We must not destroy, we must build.

Conclusion

There are obviously differences between the two nations on the trade pact. But apart from trade, there are many areas the cooperation on which can benefit both the countries.

 

 

Foreign Policy Watch: India-United States

Blue Dot Network

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Blue Dot Network

Mains level : Blue Dot Network

 

With US President Donald Trump on his maiden visit to India, the two countries are expected to have discussed the Blue Dot Network, a proposal that will certify infrastructure and development projects.

Blue Dot Network

  • Led by the US’s International Development Finance Corporation (DFC), the Blue Dot network was jointly launched by the US, Japan (Japanese Bank for International Cooperation) and Australia (Department of Foreign Affairs and Trade) in November 2019 on the sidelines of the 35th ASEAN Summit in Thailand.
  • It is meant to be a multi-stakeholder initiative that aims to bring governments, the private sector and civil society together to promote “high quality, trusted standards for global infrastructure development”.
  • The network is like a “Michelin Guide” for infrastructure projects.
  • This means that as part of this initiative, infrastructure projects will be vetted and approved by the network depending on standards, as per which, the projects should meet certain global infrastructure principles.
  • The projects that are approved will get a “Blue Dot”, thereby setting universal standards of excellence, which will attract private capital to projects in developing and emerging economies.

Countering China’s BRI?

  • Observers have referred to the proposal as a means of countering China’s Belt and Road Initiative (BRI), which was launched over six years ago.
  • While Blue Dot may be seen as a counter to BRI, it will need a lot of work for two reasons.

Fundamental difference between BRI and Blue Dot

  • While the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
  • The question is whether Blue Dot offering first-world solutions to third-world countries.
  • Secondly, Blue Dot will require coordination among multiple stakeholders when it comes to grading projects.
  • Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.

Foreign Policy Watch: India-United States

A U.S. strategy only meant to isolate China

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2-Balancing India's interests in the light of US's strategy to contain China in the Pacific.

Context

Since 2017, the United States government has released a few reports and fact sheets on its new Indo-Pacific strategy. Buried in these documents is a much deeper agenda of the U.S. government: to use three large Asian states — Australia, India, and Japan — to isolate China. There is nothing else to it.

The scale of BRI and the US objections

  • Objections to BRI: The U.S. government has made it clear that what it finds most objectionable is China’s Belt and Road Initiative (BRI), which has signed on more than 70 countries in the world.
  • What BRI aims to achieve? Adopted in 2013, the BRI is intended as a mechanism to-
    • Development of new markets: BRI aims to end China’s reliance upon the markets of the West and to develop new markets in other continents.
    • Building infra: It is also intended to use China’s massive surpluses to build infrastructure in key parts of Africa, Asia, and Latin America.
    • Investment of $ 1.3 trillion: By 2027, according to estimates by Morgan Stanley, China will spend about $1.3 trillion on this ambitious construction project.
    • Involvement of Saudi Arabia: Even Saudi Arabia, a close ally of the U.S., has made the BRI one of the cornerstones of its Saudi Vision 2030 plan.
  • Involvement of Pakistan: While China has invested $68 billion to build the China-Pakistan Economic Corridor from Xinjiang to Pakistan’s Gwadar Port.
    • Saudi Arabia has agreed to invest $10 billion in the port itself.

Significance of the BRI and comparison with the US spending

  • Staggering scale and participation: The scale of Chinese investment, and the participation of a range of countries with different political identities in the BRI, is staggering.
  • Loss of appetite in the US to spend: At the Indo-Pacific Business Forum in July 2018 the U.S. said that it has spent $2.9 billion through the Department of State and the USAID (United States Agency for International Development).
    • It has lined up hundreds of millions of dollars more through its U.S. Millennium Challenge Corporation (MCC) and the Overseas Private Investment Corporation.
    • Inadequate US spending: If one adds up all the money that the U.S. intends to spend for economic projects, it is still a fraction of the amount spent by China.
    • ‘America First’ attitude: There is no appetite in Washington, D.C., with its ‘America First’ attitude, to funnel more money towards investments in the region currently being built by the BRI.

Military Claims of the US and investment

  • US investment with military presence: It appears as if U.S. investments will come only with military claims.
    • The case of Nepal: A few years ago, Nepal discovered a large amount of uranium in Mustang, near the Nepal-China border; this has certainly motivated U.S. interest in Nepal’s economy.
    • If the U.S. money comes with U.S. military presence, this will create a serious flashpoint in the Himalayas.

Raising human right and transparency issue against China

  • The argument of human rights and transparency
    • Rhetorical argument: Unable to outspend the Chinese, the U.S. government is making a rhetorical argument that it has more respect for “transparency, human rights, and democratic values” than China, which “practices repression at home and abroad”.
  • The argument of transparency and the debt trap
    • Debt trap used by the US: It is hard to imagine the U.S. being “transparent” with its trade deals. It is equally hard to imagine the U.S. being able to argue that it would not put countries into debt.
    • Debt crisis created by the US in the 1980s: The U.S. government enabled a massive Third World debt crisis in the 1980s, which was then used by the U.S.-driven International Monetary Fund’s Structural Adjustment Programs to strangle countries in Africa, Asia, and Latin America.
    • This history is alive, and it makes a mockery of the U.S.’s attempt to say that its own approach is superior to that of China’s.

US withdrawal from multilateralism

  • Apart from that, the U.S. government has already indicated that it is uninterested in multilateral deals.
  • Withdrawal from TPP: The US withdrew from the Trans-Pacific Partnership in 2017, for instance.
    • Australia and Japan shrugged, and then put their energy into the Regional Comprehensive Economic Partnership, which sidelines the U.S.

The claim of free and open Indo-Pacific

  • Renaming the Pacific Command: In May 2018, the U.S. military’s Pacific Command was renamed the Indo-Pacific Command, a symbolic gesture that provides a military aspect to the Indo-Pacific Strategy.
  • What free and open mean to the US? The U.S. government has made it clear that for all its talk of a “free and open Indo-Pacific”, what it actually wants is an Indo-Pacific with fewer Chinese ships and more U.S. warships.
  • Just before this renaming, the U.S. National Security Strategy of 2017 noted that “China seeks to displace the United States in the Indo-Pacific region”, and so the Indo-Pacific Strategy intends for the S. to fight for its dominance in the Pacific Ocean, the Indian Ocean, and in the Asian rim.
  • This is a very dangerous war that the U.S. seeks to impose on Asia.

India adopting the US project of Indo-Pacific

  • Australia and Japan moving away: As the military aspect of the Strategy increased, both Australia and Japan edged away from full-scale adoption of the U.S. project.
    • Japan has begun to use the term “Indo-Pacific” without the word “Strategy”.
    • Australia has signed onto a “comprehensive strategic partnership” with China.
  • Only India adopting the project: Only India remains loyal to the agenda set by U.S. President Donald Trump.
    • No US strategy to contain China: In all the documents released by the U.S. government and in all the speeches by officials, there is no discussion of the strategy to contain China.
    • There is only rhetoric that skates into the belligerent territory.

Conclusion

India would be advised to study the U.S. project rather than jump into it eagerly. Room for an independent foreign policy for India is already narrowed, and room for independent trade policy is equally suffocated. To remain the subordinate ally of the U.S. suggests that India will miss an opportunity to be part of a reshaped Asia.

 

 

Foreign Policy Watch: India-United States

Terms of transaction

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- India-US relations, contradictory impulses in the US policy and what future holds for India in the present scenario.

Context

Trump administration seems supportive of India as part of its Indo-Pacific strategy, while also counting gains for itself.

No substantive outcomes of the visit stated

  • Neither side has so far publicly touted any major substantive outcomes of the visit.
  • Creation of positive atmosphere: To create some positive atmospherics, the Indian Cabinet Committee on Security just gave final approval to $3 billion worth of pending contracts to purchase military helicopters from US companies Lockheed Martin and Boeing.
    • Missile defence system sale: The US Administration, on its part, informed Congress of its willingness to authorise the sale of another $1.8 billion worth missile defence system.
    • The move is indicative of the US’s growing willingness to allow higher technology defence equipment to India.
  • Placing India at level (STA-1) similar to its closest allies: The Trump Administration has gone farther than its predecessors in the technology levels it is willing to offer.
    • Including Guardian drones in 2017, and placing India at STA-1 level, similar to its closest allies and partners.
  • The expected MoUs: The spokesperson of the Ministry of External Affairs indicated on February 20 that five MoUs can be expected, inter alia,-
    • On intellectual property.
    • Trade facilitation and
    • Homeland security.
  • Making sense of the US’s actions in the present context: There will also be the regulation joint statement.
    • Analysing in greater details: This time, the statement will be parsed in more than usual detail for indications of future direction and intent for the partnership.
    • It is the time when the US has been talking of “Make America Great Again”, advocating for sovereignty and nationalism.
    • The US is also decrying-Alliance commitments, Readying to sign an agreement with the Taliban by month-end leading to a drawdown of US troop presence.
    • Yet, it is articulating repeatedly about India being a lynchpin of its “Free and Open Indo-Pacific Strategy”.

No development on the limited trade front

  • No progress on limited trade package: The two countries have not been able to finalise even a “limited trade package”, which has been under discussion for two years.
  • Gaps between the expectations: Obviously, there is a gap between what India can accommodate, and what the US negotiators want for their own political reasons.
  • The Trump administration has taken several steps that have negatively impacted India.
    • It has imposed additional tariffs on steel and aluminium imports from India, ostensibly on national security grounds.

Contradictory impulses

  • The above action flies in the face of citing strategic partnership and convergence in Indo-Pacific strategy.
  • GSP withdrawal: It has withdrawn hitherto available GSP benefits from certain categories of labour-intensive Indian products.
  • Labelling India a ‘Developed’ country: The US has taken India out of its list of “developing” countries, lowering the threshold for countervailing trade action.
  • Against the spirit of the beneficial rise of India: These actions go against the grain of the US articulation that it sees the rise of India to be in US benefit.
    • Treating the trade deficit with China and India on equal footing: It also does not make sense when India is an overall trade deficit country.
    • Even though it has a $20 billion surplus with the US which pales compared to China’s $350 billion surplus.
  • Unprecedented actions against the closest allies: Trump has taken unprecedented action against the closest US allies.
    • He has also repeatedly publicly ridiculed Indian tariffs, claiming recently that India has not treated the US fairly.

What the future holds for the India-US relationship

  • Is the US “all-weather” partner: Given the contradictory impulses, it would be fair to ask what the future holds for the India-US relationship, and where would the Trump visit and its aftermath take us.
    • Can India consider the US a reliable and “all-weather” partner, or be constantly juggling convergences and divergences?
  • The factors that affected relationship: Historically, four factors have affected the India-US relationship at any point of time:
    • US global posture and priorities.
    • Strength of bilateral relations.
    • The role assigned to Pakistan in its global objectives.
    • The strategy towards China.

Evolution of India-US relationship

  • Under Democrat Presidents
  • Roosevelt Period: During the Second World War, Roosevelt pushed Britain to grant independence to India, facilitated a separate official Indian representation in Washington through an Agent-General since 1941.
    • But did not go far enough fearing disruption of the necessary wartime alliance. In the post-war period.
  • Truman Period: Truman spoke of partnering with developing countries for their industrial and scientific progress.
    • He welcomed Indian PM Nehru for an acclaimed visit in 1949.
    • But initiated the Cold War containment strategy against the Soviet Union, and the assessment of newly independent countries from that lens.
  • Kennedy Period: He was extremely supportive of democratic India’s economic assistance requirements, and for military assistance during the 1962 China conflict.
  • Carter Period: Carter, wedded to human rights issues, acclaimed India’s post Emergency elections.
    • But was critical on non- proliferation differences.
  • Clinton Period: Clinton stabilised the relationship after the dissonance and sanctions following our 1998 nuclear tests.
    • And gave full support to India’s position during the 1999 Kargil conflict with Pakistan.
  • Obama Period: He came out in support of India’s permanent membership of the UN Security Council, and declared India a Major Defence Partner, enabling higher-level technology authorisations.
  • Under Republican Presidents
  • Eisenhower Period: Eisenhower embraced and armed Pakistan in its CENTO and SEATO military alliances.
    • India as a bulwark against China: He emphasised food and economic assistance to India seeing it as a democratic bulwark against a Communist China.
    • First-ever visit to India by the US president: He made a successful first-ever visit of a serving US President to India, welcomed also by a 5 lakh crowd in Connaught Place.
  • Nixon Period: He visited India for a day in 1959, was upset with Indian criticism of his Vietnam military offensives.
    • Sided completely with Pakistan during the Bangladesh crisis of 1971.
    • He sent the US seventh fleet into the Bay of Bengal to pressurise India and sought to reorder the global balance by outreach to China through a secret Kissinger visit that year.
  • Reagan Period: He explored economic and scientific cooperation with India, but was absorbed with Pakistan’s support in pushing the Soviet Union out of Afghanistan.
  • George W Bush Period: George W Bush transformed the relationship with the civil nuclear cooperation agreement of 2008.
    • Perceiving again the technological, military and political challenge to the US from a rising China.

Conclusion

It is clear that India’s interests have been impacted a bit by party orientation on issues, but more by the overall global circumstance. Under the present circumstance, therefore, India will have to deal with a transactional administration, supportive of strengthening India as part of its Indo-Pacific strategy, but also counting the gains for itself.

 

Foreign Policy Watch: India-United States

An agenda for Modi-Trump

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3-Security cooperation with the US, security concern for India over the US withdrawal from the Middle East.

Context

With the withdrawal of the US from Afghanistan and other regions, India must think about its new role in the region.

The US plans for Afghanistan and the Gulf-cause of concerns for India

  • Why it matters? Prime Minister Narendra Modi will be eager to get a first-hand briefing from the US President on his plans for the Af-Pak region and the Gulf.
    • These two regions are vital to India’s economic, political and military security.
  • End of an important era in northwestern frontier: The impending withdrawal of US forces from Afghanistan and the downsizing of the American security role in the Gulf region mark the end of an important era in India’s northwestern frontiers — both land and maritime.
  • Can India overcome the past reluctance? The question is whether Modi and Trump can overcome the past reluctance in both capitals to collaborate in the regions west of India.
    • Suitable for both the countries: There is a good fit between-
    • America’s downward adjustment in the region under Trump, and-
    • India’s ambition to play a larger role in the Gulf and the Indian Ocean.

Broad understandingIndo-Pacific and extending it to the West

  • Development in the last three years: Over the last three years of the Trump presidency, Delhi and Washington had developed a broad understanding of how to secure the Indo-Pacific that the US had defined.
  • Need to extend the same to Western Indian Ocean: Officials in Delhi frequently complained that these common perspectives did not extend to the Western Indian Ocean.
  • In recent weeks, though, senior US officials have said the Indo-Pacific region extends to the east coast of Africa.
    • Question of strategic cooperation: Extending Indo-Pacific is not a question of defining geography but finding ways to secure common ground through strategic cooperation.

Elevation of South West Asia to the top of America’s security concerns

  • Filling the vacuum created by the British Empire: As the sun set over the British empire in the east after a century and a half, the US stepped in to fill the breach.
    • What began as a cautious entry into the Indian Ocean became a full-blown military power projection at the end of the 1970s.
  • Other events that played an important role? The dramatic rise in oil prices, the Islamic Revolution in Iran and its threat to export it to the Arab World, and the Soviet occupation of Afghanistan, saw the elevation of South West Asia to the top of America’s security concerns.
  • Events after Gulf War: The First Gulf War during 1990-91 saw the US intervene to restore the sovereignty of Kuwait that was swallowed by Iraq’s Saddam Hussein.
    • 9/11 attacks: The terror attacks on September 11, 2001, invited a ferocious response from the US that ousted the Taliban from power in Afghanistan.

The Iraq and Afghanistan war-Endless wars

  • Costly failures: Notwithstanding the initial successes in both Afghanistan and Iraq, there is a growing consensus in the US that these occupations have been costly failures.
    • Trump has been among the first political leaders in the US to call these wars initiated by a Republican predecessor in the White House as “stupid”.
    • The promise of ending the endless wars: During his presidential campaign in 2016 and since Trump has promised to end the “endless wars” in the Greater Middle East and bring the boys back home.
    • It is an idea that has found considerable resonance among Democrats.
  • Focusing on great power competition instead of small wars: While the security establishment is not willing to give up, US is now focusing more on the great power competition with Russia and China than the small wars that had preoccupied it over the last three decades.
  • The Oil factor: The steep decline in US energy dependence on the Gulf, too, has reduced the salience of the region in Washington.

Three consequence of the change in the US policy

  • Cutting down the military commitments
    • The Middle East and Africa: Trump has been cutting down military commitments in the Middle East and Africa.
    • His officials are about to sign an agreement with the Taliban that provides for American withdrawal from Afghanistan.
    • Maritime front: On the maritime front, Trump has called on all major powers, especially those importing oil from the Gulf, to contribute to the security of shipping in the Strait of Hormuz.
  • How it matters for India?
    • Challenges of limiting the consequences: The challenge for Indian policymakers has been to limit the consequences of what seems a definitive turn in US policy.
    • Chance to extend the own role: It should also be about seizing the possibilities for expanding India’s own role in the western marches of the Subcontinent.
  • To expand its role Delhi needs to make a few important shifts in its own thinking.
    • One, it must overcome the still powerful belief in sections of the Indian establishment that the US-Pakistan relationship is unchanging.
    • The US tilt toward India and away from Pakistan: Over the last two decades, there has been a tilt in US policies away from Pakistan and towards India.
    • For instance, the US pressures on Pakistan to vacate the Kargil heights, an exclusive nuclear exemption to India and efforts to rein in Pakistan’s cross-border terrorism during the Obama years.
    • Support in Trump period: Trump went further to acknowledge that Pakistan is part of the problem in Afghanistan and turned up the heat on Pakistan’s support for terrorism.
    • He has supported India’s efforts at the UNSC to bring Masood Azhar to book in the face of Chinese resistance.
    • Helped India isolate Pakistan at the Financial Action Task Force.
    • Prevented the UNSC from discussing Kashmir.
    • But India must also recognise: That there will be a measure of cooperation between the US and Pakistan.
    • Delhi’s focus should, instead, be on expanding its own security cooperation with the US in the troubled lands to the west of India.
  • India needs to prepare for a larger security role in Afghanistan
    • Question of being at the next-door: Trump has been asking a simple question: If India is next door to Afghanistan, should it not be doing more for Afghan security?
    • Need to explore the options: The NDA government has stepped up security assistance to Kabul. As Afghanistan enters a turbulent phase, regional and other powers are bound to fill the vacuum left by the US.
    • There are many options–  between doing nothing and sending the Indian army into Afghanistan- that Delhi and Washington could discuss.
  • Need to increase Naval activity
    • Increased role as regional security provider: Delhi has already stepped up its naval activity within the Gulf and beyond as part of its emergence as a regional security provider.
    • Cooperation with others: Effectiveness of India’s role will rise manifold if it acts in concert with the US and other partners.
    • Modi and Trump could begin by laying the political foundation for such cooperation.

Conclusion

At the beginning of Trump’s term, sceptics dismissed the prospects for India-US security cooperation in the eastern Indian Ocean and the Pacific, but progress has been steady. That cooperation can and must be extended now to the Western Indian Ocean.

 

Foreign Policy Watch: India-United States

Forging a new India-U.S. modus vivendi

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2-India-US, Importance for India, issues involved.

Context

It is clearer than perhaps ever before in recent times, that New Delhi needs the continued support of the U.S. government on almost everything substantial that matters to India in its quest to be a power of substance in the international system.

Preparing for Trump 2.0

  • The world may have to deal with Mr Trump for four more years after the end of his present term this year.
  • Where India can benefit from constructive ties with the US?
    • A fairer trade regime.
    • Accessing cutting-edge technology.
    • The fight against terrorism.
    • Stabilising our region.
    • New Delhi stands to benefit from constructive ties on all issues, given a more sensitive United States.
  • India must, therefore, seek greater understanding and engagement should there be a Trump 2.0.
  • Understanding the asymmetrical partnership: Asymmetrical partnerships, as we know from history, are rarely easy.
    • Partnership with the superpowers: Partnerships with superpowers are even more difficult; in international politics, as in life, even the best of unequal relationships results in a loss of some dignity and autonomy. 

Why the partnership with the US matters for India?

  • The growing influence of China in Indo-Pacific: Without the United States, the region could become willy-nilly part of a new Chinese tributary system.
    • Chance of more organic rule-based order: With a fully engaged United States, the region has at least the chance of creating a more organic rules-based order.
  • Past consequences for India: the history of “estrangement” with the United States, during the Cold War, has had consequences for vital national interests that continue to cast their shadow on the present.
    • Jammu and Kashmir (J&K).
    • Nuclear non-proliferation.
    • Festering of the Pakistan “problem”.
    • The Chinese humiliation of 1962, are just a few examples.
  • Change in the perception over the US: But much of course has changed today.
  • AntiAmericanism is outdate: Anti-Americanism, once the conventional wisdom of the Indian elite, seems outdated.
    • Close alignment with the US: New Delhi has, over the decades, gone on to align itself more closely with Washington.
    • Opinion in favour of the stronger ties: More important, both within India and in the U.S., the consensus across the mainstream of political opinion favours stronger relations between the two countries.

Pro-US tilt of the Indian Foreign policy

  • A survey suggests support for Trump: According to the latest Pew Surveys of Global Opinion, support for Mr Trump in India is high enough to suggest a great deal of public affection for the American President.
    • That itself is a marker of the way India and Indians now see the world.
  • Reason for the change in geo-strategic change: The reason for the change in New Delhi’s geostrategic outlook can be summarised quickly.
    • If the 1971 Friendship Treaty with the Soviet Union was a response to the continuing U.S. tilt towards Pakistan and the beginnings of a Washington-Beijing entente.
    • China factor: At present, it is the prospect of a potentially hegemonic China in the Indo-Pacific region is helping to cement the relationship.
    • Beijing has managed to alienate nearly all its neighbours and allies, except North Korea and Pakistan.
  • Gains made in bilateral ties in the last 3 years:
    • COMCASA– A foundational military agreement that allows for the sharing of encrypted communications and equipment.
    • Export control law relaxation: A change in U.S. export control laws that places India in a privileged category of NATO and non-NATO U.S. allies;
    • 2+2 dialogue: New ‘2+2’ foreign and defence ministers dialogue.
    • Oil export to India: An exponential increase in U.S. oil exports to India.
    • Tri-lateral military exercise: The inauguration of the first India-U.S. tri-service military exercise and expansion of existing military exercises.
    • The signing of Industrial Security Annex: The signing of an Industrial Security Annex that will allow for greater collaboration among the two countries’ private defence industries.
    • Inclusion of India in a U.S. security Initiative: The inclusion of India and South Asia in a U.S. Maritime Security Initiative.

Preparing for the President from Democratic Party

  • There is, of course, a chance that we may have a Democratic President next year.
  • Bipartisan support in the US: In those circumstances, we can only hope that the bipartisan consensus on engaging India will prevail.
    • To be sure, however, a new President will seek to put his/her own imprimatur on the relationship.
    • Democrats and the Human Right issue: The Democrats will clearly be more proactive on human rights and on issues of inclusion and diversity, which would make a greater demand on India and test its capacity and creativity.
  • Indian diaspora: India, of course, continue engaging with its strongest source of support in the United States: the Indian diaspora.
    • Fortunately, there is a near consensus on the need to strengthen this constituency.

Conclusion

In any case, there is little doubt that whoever is the next occupant of the White House, a retreat from multilateralism (especially on trade-related issues) and concern about China will continue to be the two main pillars of contemporary American foreign policy. If for only those reasons, Mr Trump’s reason has undeniable significance.

 

 

 

Foreign Policy Watch: India-United States

Why trade with the US matters to India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : India-US trade disputes

 

Context

  • US President Trump arrives in India months after he went on stage with PM Modi at the ‘Howdy Modi’ event in Texas.
  • Both countries have repeatedly resolved to strengthen trade ties — however, attempts at working out a short-term agreement have fallen apart in the past, and tensions have risen over tariffs.
  • The US often accuses India of taking decisions over the previous few years that prevented “equitable and reasonable access” for Americans to its markets.
  • Let’s have a look at the current state of play:

Why trade with the US matters to India?

  • India’s existing and stalled bilateral free trade agreements (FTAs) started to receive attention from the government last year, even as the country worked to conclude the seven-year negotiations to join the RCEP, the world’s “largest” regional trade pact.
  • But by backing out of the RCEP in November, India shut the door on the large “integrated market” that the deal was offering.
  • Instead, it increased the pressure on itself to strengthen existing separate trade agreements with each member of the RCEP bloc.
  • Without these, it may not be able to tap a sizeable portion of the global market; also, it may not be able to easily access the products and services of these countries.

Need for more bilateral activities

  • In the backdrop of the global economic slowdown, where India’s global exports have fallen consistently, it is important for the country to diversify and strengthen bilateral relations with other markets.
  • It has set its sights on “large developed markets”, improved access to which would help its industry and services sectors.
  • These include the US, which has, over the last two decades, become a crucial trading partner in terms of both goods and services.

Trump’s advent

  • In March 2017, soon after taking office with election campaign focussing on “making America great again”, Trump ordered “first-ever comprehensive review” of trade deficits of the United States.
  • India was among the countries that exported more to the United States than it imported, and the latter was left with a trade deficit of over $21 billion in 2017-18.
  • While the US’s deficit with India is only a fraction of its deficit with China (over $340 billion in 2019), American officials have repeatedly targeted the “unfair” trade practices followed by India.
  • These include the tariffs that India imposes, which the Trump administration feels are too high — and over which the President has personally called New Delhi out on several occasions.

Locating the main sticking points

  • Negotiations on an India-US trade deal have been ongoing since 2018, but have been slowed by “fundamental” disagreements over tariffs subsidies, intellectual property, data protection, and access for agricultural and dairy produce.
  • The office of the US Trade Representative (USTR) has underlined India’s measures to restrict companies from sending personal data of its citizens outside the country as a “key” barrier to digital trade.
  • The US wants India to strengthen patent regulations, and to ease the limitations American companies investing in India face.

India’s tariffs

  • India is a “tariff king” that imposes “tremendously high” import duties, Trump has complained repeatedly.
  • The health cess on imported medical devices announced in the Budget for 2020-21 too, is seen as a negative for the American side, as the US is among the top three exporters of these categories of products to India.
  • However, India is working to finalise a proposal to move from caps on prices of medical devices to limiting the margins of those involved in the supply of the products.

Agri sector

  • The US has long demanded greater access for American agriculture and dairy products.
  • For India, protecting its domestic agriculture and dairy interests was a major reason to walk out of the RCEP agreement.

US retaliation

1) Tariff on steel

  • In 2018, the US imposed additional tariffs of 25% on steel and 10% on aluminum imports from various countries, including India.
  • While India’s government claims the impact is “limited”, they brought down the US share in India’s steel exports to 2.5% in 2018-19 from 3.3% in 2017-18.
  • In March 2018, India challenged the US decision at the World Trade Organization (WTO).
  • India held off on imposing retaliatory tariffs until the US struck again — by removing it from a scheme of preferential access to the American market.

2) GSP axe and response 

  • In June 2019, the US decided to terminate India’s benefits under the Generalized System of Preferences (GSP) scheme, which provides preferential, duty-free access for over $6 billion worth of products exported from this country to the US.
  • The decision followed a warning earlier that year, after negotiations on a potential trade agreement had broken down.

3) Labelling India as developed country

  • India was the largest beneficiary of the US GSP programme.
  • While duty-free benefits accrued to only around $200 million for the billions of dollars worth of exports, India is understood to have asked for restoration of these benefits in the ongoing trade negotiations.
  • Most recently, the USTR classified India as a “developed” country based on certain metrics. It is not clear whether the upgrade from “developing” will impact the restoration of benefits under the GSP scheme.

The WTO tussle

  • India is one of the largest importers of almonds from the US, having imported fresh or dried shelled almonds worth $615.12 million in 2018-19.
  • Imports from the US of fresh apples stood at $145.20 million, of phosphoric acid at $155.48 million, and of diagnostic reagents at nearly $145 million that year.
  • Removal from the GSP list amidst rising trade tensions prompted India to finally impose retaliatory tariffs on several American imports, including almonds, fresh apples, and phosphoric acid.
  • This was a significant move — and the US approached the WTO against India.

Whats’ next?

  • US administration appeared to suggest that while no deal was imminent, work on a longer-term agreement was progressing well, and that his personal chemistry with Prime Minister Narendra Modi might help.
  • India and the US could begin with some “low-hanging fruit” to indicate their willingness for a deeper economic commitment.
  • This includes the US reinstating India’s benefits under the GSP programme, and India doing away with duties on motorcycles.

Foreign Policy Watch: India-United States

When Yankee goes home

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Changing India-US relation dynamics in the new global order.

Context

Delhi needs to unlearn some of the assumptions about US policy as it prepares to host Trump next week. While the diaspora is important and could be of some value in dealing with Trump, it can’t override the deeper forces animating American politics.

Changing America under Trump

  • Restriction on immigration: Trump’s America wants the Americans to come home but is shutting the door on unrestricted immigration from the rest of the world.
    • Domestic critics say America has been a nation of immigrants and Trump is wrong to keep them out.
    • Why the restriction on immigrants? But Trump has much support among the working people who know-
    • Immigration keeps wages low.
    • Helps the capitalist class and-
    • Disrupts the familiar cultural and social landscape.
  • Some want America out
    • Some chancelleries in the world demand that America must go home.
    • The president of the Philippines wants to end Manila’s century-old relationship with the US military.
    • Iran wants America out of the Gulf.
    • Russia and China would like to see the US forces out of Europe and Asia respectively.
    • The world is paying serious attention to the possibility of Yankee going home.

Downsizing of the US role and how the world is responding?

  • Downsizing
    • In the Gulf, Trump wants the Asian powers to police the vital sea lines of communication.
  • In Europe and Asia, he wants the allies to do more for their own security.
  • How the world is responding?
    • Europe’s response In Europe, France and Germany are now talking about creating new defence capabilities for the European Union amidst the prospect for American security retrenchment.
    • How the Asian countries are responding? In Asia, Japan is debating a larger security role.
    • In the Gulf, America’s Arab allies are scrambling to diversify their security dependence.

America First policy

  • What is America First policy? The idea of downsizing America’s role, along with the rejection of free trade and open borders, is at the very heart of Trump’s America First policy.
  • Resistance to the policy: To be sure there is deep resistance in the US to these ideas that run counter to America’s post-war internationalism.
    • Wall Street on the East Coast and Silicon Valley on the West Coast along with the old foreign and security policy establishment in Washington all oppose Trump’s America First focus.
  • Widespread support to the policy: Trump’s message, however, resonates across the political divide in the US.
    • Many candidates for the presidential nomination of the Democratic Party agree with Trump’s goal of ending America’s “endless wars” in the Middle East.
    • Many in the working classes, who traditionally supported the Democrats, believe Trump is right in arguing that free trade has hollowed out American industry and eliminated manufacturing jobs.

How the changes matter for India?

  • Prepare for the changes: America is at an inflection point; India needs to come to terms with the profound changes unfolding in the US.
  • No intervention policy: The Indian political classes castigated the US for excessive interventions in the affairs of other nations.
    • Trump now says such interventions are counterproductive and all nations must strengthen their sovereignty.
  • Critical of globalisation: Indians criticised the US for imposing globalisation on others; the US President is now one of the biggest critics of globalisation.
    • Trump’s America is not the one we have known.
  • India’s sensitivity to the US domestic politics: As India broadened its engagement with America in the last two decades, Delhi has become more sensitive to the US domestic political dynamics.
    • In getting the US to ease off on Kashmir and nuclear issues, Delhi had to look beyond the foreign policy establishment to generate better US appreciation of India’s concerns and interests.
  • Indian diaspora: One of the instruments that came in handy was the mobilisation of the Indian diaspora, it emerged as a key factor in elevating the bilateral relationship in the 21st century.
    • While the diaspora is important and could be of some value in dealing with Trump, it can’t override the deeper forces animating American politics.

Conclusion

Delhi’s success with the US will depend on the kind of strategic imagination it can display on trade cooperation, securing Afghanistan after America’s withdrawal, stabilising the Gulf and developing a new global compact on migration that is sensitive to domestic political considerations and yet contributes to the collective economic development.

 

 

 

 

Foreign Policy Watch: India-United States

Hype Trumps Hope

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- India-US relation in changing circumstances.

Context

US president’s visit comes when a mutually beneficial framework of bilateral relationship stands disrupted.

Significance previous U.S. President’s visits

  • The Clinton visit:  The Clinton visit occurred against the backdrop of a new assessment within the American strategic community of India’s potential role in the post-Cold War era and against the backdrop of the rise of China.
    • Recognition of India’s nuclear power: He implicitly recognising India’s nuclear power status.
    • Kashmir issue: He suggested that the line of control (LoC) between India and Pakistan should be viewed as the international border so as to bury the “Kashmir issue” forever and-
    • Visas for Indians: increasing entry visas for Indians that has since contributed to the emergence of a sizeable community of Indian Americans.
    • As a counter to China: It was suggested that the rise of democratic India would be in the interests of the US and so the latter ought to be supportive of the former.
  • The Bush visit:
    • Political context: The rise of China and of radical Islam and jihadi terrorism provided the geopolitical context.
    • Economic context: The growth of an increasingly open Indian economy provided the economic context.
    • Cooperation in civil nuclear energy: Influenced by this new thinking, President George Bush took the next steps in strategic partnership and led the initiative to promote cooperation in the field of civil nuclear energy that also explicitly recognised India as a nuclear weapons power.
    • As heads of state, Clinton and Bush altered US-India bilateral relations in a fundamental way.
  • The Obama visit:
    • P2P relation: His second visit was more a recognition of the growing importance of people-to-people (P2P) relations and
    • Defence sales to India: The visit also aimed at promoting defence sales to India.
    • During the nuclear deal negotiations, US Congresspersons would often suggest that it was a “123 for 126” deal — that is, they would vote in favour of the 123 agreement in Congress in the hope that India would buy 126 fighter jets from the US.
    • That hope remains as yet unfulfilled, with the French getting the Rafale deal and no decision taken on the purchase of US fighter jets.

America First policy of Trump

  • The credit for laying the foundation for a new and supportive post-Cold War relationship between the US and India goes singularly to President Bush.
  • Disruption with the arrival of Trump: The mutually beneficial framework that Bush helped create to promote the bilateral relationship has been rudely disrupted by the arrival of Donald Trump in Washington DC.
    • End of GSP: Trump’s “America First” policy offers no space for offering India “special and differential” treatment on any front, least of all trade.
    • Status of the Indian economy from the US perspective: With per capita annual national income of US $60,000, Trump’s America has no qualms declaring India, with a per capita annual average national income of US $2,000 a “developed economy” not deserving of any leniency in trade policy.
    • Clubbing together with China: To club China, a $15-trillion economy, with a $3-trillion India on the trade front is not just stupid but an affront to Indian sensibilities.

What are the hopes and what could be the outcomes of the visit?

  • No bi-partisan support to India’s rise: It has to be recognised that neither Democratic liberals nor Republican conservatives are any longer willing to be supportive of the Bush-Rice paradigm that views India’s rise in benign and mutually beneficial terms.
    • Inward-orientation in both the countries: Today the relationship seems caught in the pincers between the inward-orientation of rightwing nationalists in both nations.
    • No hope of change: There is no reason as yet to believe that this unfortunate state of affairs will be altered by the Trump visit next week.
  • Stand on Pakistan or Kashmir: Trump has also moved away from the Clinton-Bush framework on India-Pakistan relations and moved closer to approach of wanting to insert the US into the equation on Kashmir.
    • Appeasement of Pakistan: Trump’s motives are no different from those that initially drove Obama-namely, to appease Pakistan in the hope of securing a peaceful exit from Afghanistan.
    • Expect differences to persist: At best, India can hope to limit the damage Trump may do to strategic stability in the region.
  • Visa and investment: There will be much talk about US investments in India and increased visas for Indians going to the US.
    • Corporate interests: Both are driven largely by US corporate interests.
    • Given the direction of the Modi government’s trade policy, one cannot expect any dramatic concessions being made.
    • Defence purchases: The best India can do for the US is to buy more defence equipment and ease up on some trade restrictions.
    • Defence sales to India are an essentially commercial activity and much of it can go on even in the absence of strategic convergence and shared geopolitical perspectives.
  • Brain-drain and need to focus on education: Much is made of Indian Americans heading US multinationals and the Great Indian Diaspora in the US.
    • Outmigration of talent: The continued neglect of education in India is increasing the outmigration of talent, offering the US a reservoir of talent.
    • Drain on national resources: While the Indian elite celebrates this out-migration, the fact is that it is a drain on national resources.

Conclusion

In sum,  with the supportive Bush-Rice doctrine defining the post-Cold War US-India partnership virtually abandoned, and the new Trump doctrine treating India as a “developed” economy, demanding parity on trade, bilateral relations have become uncertain and testy. To hide the lack of substance in the relationship the Trump visit will focus on the hype and Prime Minister Modi has perfected the art of diplomacy as mass entertainment.

 

 

Foreign Policy Watch: India-United States

USTR takes India off developing country list

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Countervailing duty

Mains level : India-US trade disputes

 

The Office of the United States Trade Representative (USTR) has published a notice, amending lists of developing and least-developed countries that are eligible for preferential treatment with respect to countervailing duties (CVD) investigations.

New classification by US

  • To harmonise U.S. law with the World Trade Organization’s (WTO) Subsidies and Countervailing Measures (SCM) Agreement, the USTR had, in 1998, come up with lists of countries classified as per their level of development.
  • These lists were used to determine whether they were potentially subject to U.S. countervailing duties. The 1998 rule is now “obsolete” as per the USTR notice.
  • Countries not given special consideration have lower levels of protection against a CVD investigation.
  • A CVD investigation must be terminated if the offending subsidy is de minimis (too small to warrant concern) or if import volumes are negligible.
  • The de minimis thresholds and import volume allowance are more relaxed for developing and least-developed countries.

Criteria set by US

  • The USTR used the following criteria to determine whether a country was eligible for the 2% de minimise standard:

(1) Per capita Gross National Income or GNI

(2) share of world trade

(3) other factors such as Organisation for Economic Co-operation and Development (OECD) membership or application for membership, EU membership, and Group of Twenty (G20) membership.

Delisting India

  • India was, until February 10, on the developing country list and therefore eligible for these more relaxed standards. It has now been taken off of that list.
  • India, along with Brazil, Indonesia, Malaysia, Thailand and Vietnam were taken off the list since they each have at least a 0.5% share of the global trade, despite having less than $12, 375 GNI (the World Bank threshold separating high-income countries from others).
  • India was taken off the list also because — like Argentina, Brazil, Indonesia and South Africa — it is part of the G20.
  • Given the global economic significance of the G20, and the collective economic weight of its membership (which accounts for large shares of global economic output and trade), G20 membership indicates that a country is developed a/c to USTR.

Foreign Policy Watch: India-United States

[op-ed of the day]Spotting an opportunity in changing fundamentals

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2-Effects of politics and policies of developed and developing countries on India's interest, Indian diaspora.

“Phase one” of the trade deal between the U.S. and China notwithstanding, the ongoing dispute between the U.S. and China and other changing scenarios could turn out opportunities in various forms for India.

Oil prices windfall

  • Slack demand and increased production by the U.S., had lowered oil prices which was good news for India.
  • It could also help India address its current account deficit.
  • But oil prices have surged more than 4% following the killing of Iranian general by the U.S.
  • An outbreak of hostilities could send the oil prices soaring.
  • India’s energy import from the U.S. is likely to touch $10 bn by 2019-20.
  • While China is increasing its stake in Saudi Aramco- one of the largest oil production company in the world.
  • China is also increasing its ties with the other oil producers which gives China the opportunity to increase its naval presence in the Indian Ocean increasing the Strait of Hormuz.

On trade front

  • According to the State Bank of India report-Ecowrap, India has scarcely benefited from the trade war.
  • Of the $35bn decline in China’s export to the U.S. $21bn was diverted to the other countries and the rest $14bn was made good by the U.S. producers.
  • India contributed only $755-million of this diversion.
  • The U.S. tariff made some other players-Mexico, Taiwan, Vietnam even more competitive.
  • China is facing pork shortage but India exports pork indirectly through Vietnam, increasing its cost and reducing market share.
  • China’s thrust on the AI, robotics, autonomous vehicles, and space technology has raised the U.S. suspicion, raising the prospects of high-tech war.
  • The big three Chines high-tech companies, Baidu, Alibaba, and Tencent together invested $5bn in India.
  • India could use this opportunity to insist China open its market for the IT sector and other tech exports.
  • India has allowed all the players including Huawei to participate in the 5G trials but the outcomes are far from over.
  • With all that said, the U.S.-China tensions drive supply chains out of China, with the right policies as Vietnam has done, India could emerge as an alternative destination.
  • Restriction by the U.S. on  China could lead to difficulties in reducing emissions and mitigate climate change in China.
  • Restrictions on technology export often lead to an increase in domestic research.
  • So, China could succeed in developing all the technologies that are denied to it by the U.S. under the restrictions.
  • With the protests in Hong Kong showing no signs of abating, India may have to cater to refugees of Indian origin if things turn uglier.

Key regional issues

  • The situation in the South China Sea is in favour of China as it already has occupied several of them.
  • Though India is a member of “Quad” dialogue on border issues, it has no role in negotiating the “Code of Conduct” with the ASEAN.
  • On the connectivity issues, the U.S. position is helpful for India. Recently the U.S. criticised China-Pakistan Economic Corridor.
  • India is not a member of the Indo-Pacific Business Forum created by the U.S., Japan, and Australia.
  • India is also not a member of Blue Dot network created by the U.S., Japan, and Australia.
  • In future India might have to reconcile its regional connectivity issues with BRI projects that have mushroomed in the region.
  • On the ideological fronts, China is so emboldened by its economic success that it seeks to challenge the liberal democratic model and offers an alternative based on its own system.
  • India might have to contend with the greater Chinese presence in the Asia-Pacific theatre.

Conclusion

India’s relations with the U.S. and Chinas growing influence in economic as well as all the other sphere represents multiple challenges for India and are likely to grow in the future.

Foreign Policy Watch: India-United States

[op-ed snap] Cracks in the relic: on U.S.-Turkey relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : NATO disintegration

Context

Rising tensions in U.S.-Turkey relations are threatening to upset the North Atlantic Treaty Organisation (NATO) unity.

Recent Incidents: US-Turkey

    • In the latest of a series of incidents, Turkish President Recep Tayyip Erdoğan has threatened to shut down two U.S. bases in retaliation for the proposed American sanctions on Ankara over purchasing Russian weapons.
    • The U.S. and Turkey are the largest and second-largest standing armies of NATO.
    • There are U.S. nuclear warheads in the Incirlik airb̥ase, a critical facility for American operations in West Asia.
    • Mr. Erdoğan has warned that Incirlik and the Kurecik radar base would be shut if there are sanctions.
    • U.S.-Turkey ties began slumping in recent years after Washington’s refusal to extradite Fethullah Gülen, a U.S.-based Turkish Islamic preacher who is accused by Ankara of orchestrating the failed 2016 coup against Mr. Erdoğan. 
    • The U.S. decision to arm and assist Kurdish rebels in Syria against the Islamic State was another blow. 
    • Ankara sees the People’s Protection Units, the main Syrian Kurdish militia that became an American ally in the anti-IS war, as an affiliate of the Kurdistan Workers Party, the Kurdish militia on the Turkish side.
    • Russia – Turkey moved closer towards Russia, now trying to raise its regional profile, and invaded Kurdish-held towns in northern Syria earlier this year. Turkey’s decision to purchase the Russian S-400 missile system despite U.S.-NATO opposition was the tipping point.

NATO

    • After the disintegration of the Soviet Union, NATO remained as a vehicle of western military might and continued to expand to Russia’s borders.
    • This created tensions between Russia and the West in the recent past. 
    • With the resurgence of populist, nationalist leaders in several western countries, NATO’s relevance has been called into question several times.
    • Fast-deteriorating ties between the U.S. and Turkey is adding to the crisis. 
    • The Trump administration has already suspended Turkey from the F-35 program, citing concerns over Russia spying on the fighter jet’s capabilities using the S-400 system’s radar. 
    • The U.S. Senate Foreign Relations Committee approved a Bill seeking sanctions on Turkey over the S-400 purchase and the Syria offensive. 
    • Turkey seems determined to go ahead with the S-400 deal and even buy advanced Russian aircraft if the U.S. does not deliver the F-35s. 
    • With threats to shut down Incirlik and Kurecik bases, it is now clear that the cracks are wide open. 

Conclusion

The question the Atlantic alliance faces in this hour of crisis is not just whether the U.S. and Turkey would manage to resolve their differences, but also whether NATO could stay relevant in a post-Cold War era where bilateral ties are fast-changing.

Foreign Policy Watch: India-United States

North Atlantic Treaty Organisation’s (NATO) Funding and Summit

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NATO

Mains level : NATO and its fading relevance

What is the news: The U.S. contribution to the North Atlantic Treaty Organisation’s (NATO) operating budget has been cut down at the cost of an increase in Germany’s payments to the alliance. This move comes after repeated criticism of European members of the organisation by the U.S.

  • This will come into effect from 2021, wherein the U.S. and Germany will contribute equally to the NATO budget.
  • In other news, leaders of member states were gathered in London to celebrate the 70th anniversary of the North Atlantic Treaty Organisation (NATO).

Key Points

  • Under the new agreement, the U.S. will cut its contribution to 16.35% of the total NATO’s budget while Germany and other allies’ contributions will go up.
    • The U.S. currently pays 22.1% of the NATO budget and Germany pays 14.8%, under a formula based on each country’s gross national income.
  • France has refused to accept the new arrangement and will keep its contribution the same at 10.5%.
  • All allies have agreed on a new cost-sharing formula under which cost shares attributed to most European allies and Canada will go up, while the US share will come down.

Background

  • Earlier at the 2014 summit, NATO allies had agreed to spend 2% of their GDP on defence.
  • However, the US suggested that countries not only meet their commitment of 2% expenditure on defence but also increase it to 4% immediately.
  • Till 2019, only eight of 29 members are able to spend 2% of their GDP on defence. Germany has also failed to meet this target.

NATO summit: The founding and purpose of the alliance

  • NATO was founded to ensure collective protection for its members — the United States, Canada, and American allies in Europe — against the threat of possible post-War communist expansion and aggression by the Soviet Union.
  • The Soviet Union also formed its own defence and political alliance with Eastern European nations as a counterbalance to NATO — the Warsaw Pact that was signed in 1955.
  • This alliance was disbanded after the dissolution of the Union of Soviet Socialist Republics (USSR) in 1991.

North Atlantic Treaty Organization

  • It is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949, by the United States, Canada, and several Western European nations to provide collective security against the Soviet Union.
  • It is headquartered at Brussels, Belgium.
  • A key provision of the treaty, the so-called Article 5, states that if one member of the alliance is attacked in Europe or North America, it is to be considered an attack on all members. That effectively put Western Europe under the “nuclear umbrella” of the US.
    • NATO has only once invoked Article 5, on September 12, 2001, following the 9/11 attacks on the World Trade Center in the US.
  • NATO’s protection does not extend to members’ civil wars or internal coups.
  • As of 2019, there are 29 member states, with Montenegro becoming the latest member to join the alliance in 2017.
    • France withdrew from the integrated military command of NATO in 1966 but remained a member of the organization. However, it resumed its position in NATO’s military command in 2009.

Relevance of NATO

  • With the collapse of the USSR, NATO lost its essential raisons d’etre, and for most NATO members, the primary concern now is the expansionist ambition of China.
  • NATO has traditionally focused on Russia and the European neighbourhood and recognizes the need to deter “revisionist” and “militarily advanced” Russia, and the threat posed by rogue nations such as North Korea.

Deviance of members

  • Turkey has rejected NATO’s military plan for the Baltic nations against Russia, unless it receives support to defeat Syrian Kurds at its borders, something that France and the US do not agree with.
  • The tensions have come in the backdrop of “Operation Peace Spring” conducted by the Turkish military along the Syrian border in October.
  • During NATO’s Brussels Summit last year, Trump criticised European nations, especially Germany for not spending enough on defence.
  • As per an agreement that was reached in 2014, member nations are supposed to spend up to 2% their GDP on defence on a voluntary basis.
  • Until 2018, the US spends the highest percentage of its GDP (at least 3.5%) on defence, while the Europeans, including the French, the Germans, the Italians, and the Spaniards, spend less than 2%.

Challenges before NATO

  • The great challenge before NATO is its seeming inability to align the diverging priorities of its member nations.
  • France’s priority at the moment is the eradication of terrorism from northeast Syria, while the US under Trump clearly wants to get out of the Middle East and focus more on the military rise of China.
  • The challenge is made stronger by the personalities of the leaders — the Europeans are clearly impatient with Erdogan, and Trump’s unpredictability and repeated attacks on European countries and leaders has not endeared him to them.

Foreign Policy Watch: India-United States

Exercise Tiger Triumph

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ex. Tiger Triumph

Mains level : India-US defence cooperation


  • The first-ever tri-services India-U.S.A. amphibious exercise titled ‘Tiger Triumph’ is scheduled to be conducted in this week.

Ex. Tiger Triumph

  • The exercise will be conducted off Visakhapatnam and Kakinada coasts.
  • This exercise will include events and field training that simulate moving humanitarian assistance and disaster relief force from ship to shore.
  • It is aimed at building the capacity of both the Indian and U.S. participants and improving their ability to operate together.
  • Around 1,200 Indian soldiers, sailors, and airmen, and 500 U.S. Marines, sailors and airmen will participate in the nine-day exercise which envisages the U.S. and Indian forces establishing professional relationships.
  • The exercise focuses on counter-terrorism operations.

Foreign Policy Watch: India-United States

US-India Defence Technology and Trade Initiative

Note4Students

From UPSC perspective, the following things are important :

Prelims level : DTTI, STA-1

Mains level : India-US defence cooperation

  • The ninth India-US Defence Technologies and Trade Initiative (DTTI) group meeting is scheduled to happen in New Delhi next week.

DTTI

  • DTTI came about to expedite the scope of cooperation on defence technology that become narrow due to the presence of differing bureaucratic processes and legal requirements.
  • Essentially, DTTI is an initiative to provide increased US senior level oversight and engagement to get beyond these obstacles.
  • It is led by Undersecretary of Defence for Acquisition and Sustainment from the United States and Secretary for Defence Protection.

What are its aims?

  • While DTTI is not a treaty or law, it is a flexible mechanism to make sure that senior leaders from both countries are engaged consistently to strengthen the opportunities in the field of defence.
  • Its central aims include strengthening India’s defence industrial base, exploring new areas of technological development and expanding U.S.-India business ties.
  • India’s defence industry was in a growing stage and that India was looking to acquire niche technology in manufacturing defence weapons and equipment.

Back2Basics

STA-1

  • In August 2018, the US granted to India the designation of Strategic Trade Authority Tier 1 or STA-1.
  • This is providing India with greater supply-chain efficiency by allowing US companies to export a greater range of dual-use and high-technology items to India under streamlined processes.
  • This authorisation is the equivalent of NATO allying with Japan, South Korea and Australia.

Foreign Policy Watch: India-United States

[op-ed snap] Raja Mandala: India and the US need to address the vexed issues in trade

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : India and USA - way ahead

Context

The event at Houston brought together Indian diaspora. This must yield tangible outcomes.

Trade 

  • India and the US are wrapping up the negotiations on trade that have been underway for some time. 

Past relation – sensitive to others’ needs

  • Then External Affairs Minister Jaswant Singh offered quick unilateral support in May 2001 when US President George W Bush’s announced an initiative to build missile defences and move away from the doctrine of deterrence through nuclear terror. 
  • Atal Bihari Vajpayee’s strong support for Bush’s war on terror immediately after 9/11 set the stage for a political and strategic approach to the Indo-US relationship.
  • Bush extended unprecedented support for India’s rise by changing the US domestic nonproliferation laws as well as international regulations to lift a long-standing nuclear blockade against India. 
  • The resolution of the nuclear issue created the basis for a productive partnership with the US.
  • This saw liberalisation of US technology transfers, launch of counter-terror cooperation, the expansion of defence relationship and political cooperation on regional and global issues. 
  • Modi reoriented India’s policy to make Delhi part of the solution in the stalled international negotiations on mitigating global warming. Obama helped finalise the nuclear agreement and integrate India into the global nonproliferation regimes.

Trade issues

  • India’s prickly attitude towards trade liberalisation put it at odds with its major trading partners. 
  • Market access has been an issue that has troubled the relationship in recent years. 
  • A trade deal with the US will make it a lot easier to deal with his administration on a range of issues including terrorism, Kashmir and the unfolding crisis in Afghanistan. 

Way ahead

  • The two countries need to change the direction in bilateral commercial engagement.
  • They need to communicate their interests to each other and signal the political will to overcome domestic obstacles.
  • A new trade agreement must prepare India for profound changes in the global economic order and technological disruption. 

Way ahead

Getting India’s most important trade relationship right in the near term and charting a course for a mutually beneficial commercial partnership with the US over the long term are urgent and worthy goals in themselves.

Foreign Policy Watch: India-United States

[op-ed snap] A minor win for India at WTO

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Domestic Content Requirement

Mains level : Solar dispute at WTO

CONTEXT

A WTO panel in June accepted India’s claim in a dispute concerning U.S. regulations on the domestic content requirement in the production of renewable energy. 

The dispute and the verdict:

  • The dispute revolved around certain States in the U.S. that give incentives to local producers in the form of tax rebates, refunds, and credits when they produce renewable energy using locally manufactured products. 
  • Article III of the WTO’s General Agreement on Tariffs and Trade (GATT) requires that countries do not provide less favorable treatment to ‘like products’ originating from other nations. 
  • A solar PVC manufactured in the U.S. should be liable to the same amount of tax as one made anywhere else in the world.
  • WTO’s determine whether an item is a ‘like product’ based on a product’s end-use, composition, substitutability, consumer preferences, and tariff classifications.
  • In this case, the U.S. conceded that the import from India was a ‘like product’.
  • But the U.S. argued that the figures quoted by India showing growth in the number of solar photovoltaic (PV) systems installed in Washington State between 2005 and 2015 do not support the argument that additional incentives have induced wide-scale adoption of locally made renewable energy products.
  • WTO panel rejected this argument, stating that Washington State’s additional incentive accords an advantage on the use of local products not available for ‘like imported products’. 
  • India was not required to prove that the rise in the production of PV systems was caused by a rise in the production of upstream local products at the cost of ‘like-imported products’.

Significance

  • India had earlier lost a similar dispute over its own domestic content requirements. 
  • The U.S. imported 44% of the Indian solar module exports in the 2018-2019 period.
  • This dispute could have been easily avoided had the two countries settled their differences beforehand. 

Conclusion

There are various other disputes pending between the countries at the WTO involving the export promotion scheme brought in by India and the imposition of excess customs duty on steel and aluminum by the U.S. 

 


Back2Basics

Solar Panel Dispute at WTO

Foreign Policy Watch: India-United States

 ‘Public Charge’ in US immigration policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Public Charge

Mains level : US Visa policy and impacts on Indian diaspora

  • Last week, the US signalled a major change in its green card policy, by announcing an expansion in the meaning of the term “public charge”.
  • The new rule could drastically reduce legal immigration to the US.

The ‘Public Charge’

The present definition, according to the website of the US Citizenship and Immigration Services (USCIS), is as follows:

  1. For purposes of determining inadmissibility, “public charge” means an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at government expense.
  2. The programs falling under the above definition include Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF) cash assistance, state and local General Assistance programs and long-term care programs like Medicaid among others.
  3. Programs generally not considered under “public charge” include “non-cash benefits” such as public schools, childcare services, Medicaid (non long-term), public assistance for vaccinations, emergency medical services, Children’s Health Insurance Program (CHIP), nutrition programs like Food Stamps, foster care and adoption assistance and job training programs.

Consequences of an immigrant becoming a ‘public charge’

  • Under the existing policy, USCIS immigration officers can deny a green card on “public charge” grounds if the applicant is “likely to become primarily dependent on the government for subsistence”.
  • This discretionary power has to be exercised only after looking into “the totality of the circumstances”, including factors such as age, health, financial status, education, and skills.
  • Inadmissibility on “public charge” grounds can only take place in green card proceedings, and not in those for citizenship (which in most cases is sought when the applicant already has a green card).

What has the Trump administration changed?

  • The new rule expands the ambit of the term “public charge”, by introducing additional conditions that could preclude an immigrant from obtaining a green card.
  • Major changes include: more welfare programs being included in the “public charge” list, the taking into consideration of even past use of benefits, and a significant increase in the family and individual income criteria.

Impact of the move

  • The rule is also criticised for its possible long term impact on the US, as legal immigrants already residing in the country would now be fearful of availing essential services.
  • Critics have alleged a racial bias, saying that the move targets immigrants from developing countries, while prioritizing more affluent applicants from the global North.

Foreign Policy Watch: India-United States

U.S. formally withdraws from INF arms treaty

Note4Students

From UPSC perspective, the following things are important :

Prelims level : INF Treaty

Mains level : Impact of US withdrawl from INF Treaty

  • The U.S. and Russia ripped up a Cold War-era missile pact in a move that raised the spectre of an arms race between the global superpowers.

INF Treaty

  • The 1987 Intermediate-Range Nuclear Forces (INF) treaty limited the use of medium-range missiles, both conventional and nuclear.
  • Under the INF treaty, the US and formerly Soviet Union agreed not to develop, produce, possess or deploy any ground-based ballistic and cruise missiles that have a range between 500 and 5,500 km.
  • It exempted the air-launched and sea-based missile systems in the same range.
  • The INF treaty helped address the fears of an imminent nuclear war in Europe.
  • It also built some trust between Washington and Moscow and contributed to the end of the Cold War.

Loopholes in the treaty

  • It left the other nuclear weapon powers free to develop ground-based intermediate-range forces
  • In the age of nuclear superpowers, it did not seem to matter.
  • Since then, many countries have developed missiles in the range of 500 to 5,500 km, including India, Pakistan and North Korea.
  • Nearly 90 per cent of China’s vast missile armoury — estimated at around 2,000 rockets — is in the intermediate range and would be illegal if Beijing were to be a part of the INF treaty.

Row over a missile

  • Washington has for years accused Russia of developing a new type of missile, the 9M729, which it says violates the treaty — claims that NATO has backed up.
  • The missile has a range of about 1,500 kilometres according to NATO, though Moscow says it can only travel 480 kilometres.
  • Russia had failed to return to full and verified compliance through the destruction of its noncompliant missile system.

Foreign Policy Watch: India-United States

[op-ed snap] Kashmir mediation

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : USA's stand on Kashmir Issue

CONTEXT

Facing a furore in Parliament over the issue, the government has clarified in no uncertain terms that Prime Minister Narendra Modi did not request U.S. President Donald Trump to “mediate or arbitrate” on the Kashmir issue, as Mr. Trump claimed on Monday.

Response by government

  • Addressing Parliament, External Affairs Minister S. Jaishankar said India remains committed to its policy of discussing all outstanding issues with Pakistan only bilaterally, and assured the House that Mr. Modi did not raise this with Mr. Trump at their recent meeting in Osaka during the G-20 summit.
  • In making the claim that has been roundly denied by New Delhi, Mr. Trump breached several well-laid diplomatic protocols, including one against discussing privileged conversations with a leader, during a public conversation with another.

Statements

Mr. Trump also said a “lot” of his talks with the Pakistan Prime Minister would focus on India and Afghanistan, an odd departure from the precept of putting bilateral issues to the fore, and being more discreet when discussing sensitive relations involving other countries.

New Realities

  • For New Delhi, it may be time to recognise that Mr. Trump’s comments are a sign of new realities in international diplomacy, where leaders care less about niceties and more about open communication.
  • Mr. Modi will have to prepare accordingly for some plain-speaking when he visits the U.S. and meets with Mr. Trump, as he is expected to, in September this year.
  • In the short term, the government’s decision to address the claim by Mr. Trump will have nipped any repercussions in the bud.

Way Forward

The government should pursue the issue through diplomatic channels with the U.S. government, and determine whether Mr. Trump made the comments out of confusion or deliberately.

Stand on Kashmir

Opposition to third part mediation – India has always opposed any suggestion of third-party mediation on Jammu and Kashmir; both the 1972 Shimla Agreement and the 1999 Lahore declaration included India’s and Pakistan’s commitment to resolving issues between them.

It is unlikely that Mr. Modi would have spoken out of line with this policy, and the most charitable explanation for Mr. Trump’s new contention is that he mistook India’s appeal to the international community to hold Pakistan accountable for terror groups on its soil that carry out attacks in Kashmir, for a general desire for mediation.

Contentious Issues

  • Mr. Trump’s comment in March that the U.S. successfully mediated for the release of captured fighter pilot Abhinandan by Pakistan may have even given him some hope that the U.S. could play a larger role on the Kashmir issue, and New Delhi would need to address that.
  • A more worrying proposition is that Mr. Trump took the line favoured by his Pakistani interlocutors on Kashmir as a way of enhancing his own plans for a pullout from Afghanistan with Pakistan’s help on security and talks with the Taliban.

Conclusion

While the damage from Mr. Trump’s words may not have a very lasting impact on India-U.S. ties, that from any rushed measures to force a resolution in Afghanistan will have far-reaching and lasting impact, including on India.

Foreign Policy Watch: India-United States

HR 1044

Note4Students

From UPSC perspective, the following things are important :

Prelims level : HR 1044

Mains level : Changing visa norms by US and its implication on Indians

HR 1044

  • The US lawmakers passed a Bill titled Fairness for High-Skilled Immigrants Act (HR 1044).
  • It is aimed at lifting the current seven per cent country-cap on issuing Green Cards, a development which would benefit thousands of highly-skilled Indian IT professionals.

What the HR 1044 means for India?

  • A change in the existing law can mean that immigrants from countries like India and China seeking permanent residency could expect shorter wait times.
  • Indian IT professionals, who under the existing law would have to wait up to 70 years as some studies suggest, can now hope for a fairer system with lesser processing time.
  • Apart from removing caps for employment-based Green Cards, caps for family-based categories have also been increased to 15%.
  • A US based institute released a study in 2018 saying, that based on current law and backlog, Indian nationals holding advanced educational degrees may have to wait over 150 years in order to get a Green Card.

Back2Basics

What is a Green card?

  • A Permanent Resident Card, also known as a ‘Green Card’, allows a non-US citizen to live and work permanently in America.
  • Green Card holders can qualify for US citizenship generally after three to five years.
  • Over 10 lakh migrants from around the world are known to receive Green Cards yearly.

Popular Green Card categories

  • Categories of employment-based visas under which Indian professionals are known to apply are the:
  1. ‘EB-1’, or priority workers with extraordinary ability
  2. ‘EB-2’ or those holding advanced degrees, and
  3. ‘EB-3’ or skilled workers.
  • The EB-2 category generally sees the most number of applicants.

Foreign Policy Watch: India-United States

[op-ed of the day] Game of chicken that can end in disaster

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Impact of USA Iran conflict on the regional politics

Note- Op-ed of the day is the most important editorial of the day. Aspirants should try to cover at least this editorial on a daily basis to have command over most important issues in news. It will help in enhancing and enriching the content in mains answers. Please do not miss at any cost.

CONTEXT

On July 7, Iran announced that it would begin enriching uranium above a concentration of 3.67% permitted under the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), reached by Iran and the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States) on July 14, 2015.

Increasing tensions between USA and Iran

  • These steps come in the wake of increasing tensions between the U.S. and Iran following the shooting down of an unmanned U.S. drone over the Strait of Hormuz in June.
  • However, it led to the U.S. President, Donald Trump, first ordering a retaliatory strike on Iran and then rescinding it at the last minute.

Effects on regional peace

  • The mayhem could have spread to the entire West Asian region with Iran attacking strategic American, Saudi and Emirati targets around the Gulf and attempting to block the Strait of Hormuz in an effort to choke off the supply of Gulf oil to the international market.
  • Further, Iranian allies in Lebanon, Iraq and Syria might have launched attacks against American troop concentrations as well as against U.S. ally Israel, thus inviting further American and Israeli counter-retaliation and dragging the U.S. into its third major war in the region.

US’s withdrawal from the deal and sanctions

  • The downward spiral in U.S.-Iran relations started with Mr. Trump’s decision (announced in May 2018) to withdraw from the JCPOA against the advice of the U.S.’s European allies France, Germany, and the U.K. that are parties to the deal.
  • The Trump administration followed it up with the re-imposition of stringent economic sanctions against Iran that were being gradually dismantled following the 2015 nuclear deal.
  • These included sanctions against foreign companies doing business with Iran and against countries buying Iranian oil.

List of demands

 No waivers – Finally, the U.S. announced in April this year that it would not extend waivers granted earlier to eight countries (China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece) which had been the largest importers of Iranian oil.

Iran’s nuclear programme – Further curbs on Iran’s nuclear programme including total stoppage of uranium enrichment even at low levels permitted by the JCPOA and monitored by the International Atomic Energy Agency.

Support to terrorist groups – Further, USA demanded that Iran stop all support to Hezbollah and Hamas which the U.S. considers to be “terrorist” groups, permit the disarming of Shia militias in Iraq, and stop aiding Houthis in Yemen fighting Saudi and Emirati forces in that country.

End building of ballistic missiles  – Above all, Mr. Pompeo demanded that Iran end building of ballistic missiles and halt further launching or development of nuclear-capable missile systems.

Rejection by Iran

However, persisting and escalating moves by the U.S. during the past year now seem to have made it impossible for Tehran to simultaneously maintain the contradictory position of resisting American demands while continuing to comply with restrictions imposed on its nuclear programme by the JCPOA.

Retaliatory measures

  • The Iranian government, in order to maintain its standing with the populace, has been left with no option but to undertake tit-for-tat measures, further heightening the political temperature in the Persian Gulf.
  • This has turned the U.S.-Iran standoff into a game of chicken in which either one of the parties to the game blinks and concedes victory to the other or a “crash” becomes inevitable.

Conclusion

  • The American-Iranian confrontation seems to be inexorably heading towards the latter outcome.
  • If taken to its logical conclusion this scenario can turn out to be catastrophic for the entire West Asian region as well as for the international economy.
  • Oil supplies from the Persian Gulf are likely to be greatly reduced if not totally eliminated sending oil prices sky-rocketing, especially threatening the vulnerable economies of the global South.

Foreign Policy Watch: India-United States

US law to give India NATO ally-like status

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NATO

Mains level : India-US strategic relationship

  • The U.S. Senate has passed a legislative provision that brings India at par with America’s NATO allies and countries like Israel and South Korea for increasing defence cooperation.

How will it benefit India?

  • The act provides for increased U.S.-India defence cooperation in the Indian Ocean in the areas of humanitarian assistance, counterterrorism, counter-piracy and maritime security.
  • It will clear the way to provide state-of-the-art weapons and sensitive technology to India.
  • It will make India a big associate of US in defence deals also it will increase India’s status.
  • Earlier, the US-India had signed Communication, Compatibility and Security Agreement (COMCASA) in 2018 for sharing sensitive information.

About NATO

  • The North Atlantic Treaty Organization, also called the North Atlantic Alliance, is an intergovernmental military alliance between 29 North American and European countries.
  • It is based on the North Atlantic Treaty that was signed on 4 April 1949.
  • NATO constitutes a system of collective defence whereby its independent member states agree to mutual defence in response to an attack by any external party.

Assist this newscard with:

India to be treated as NATO ally

Foreign Policy Watch: India-United States

[op-ed snap] Terms of estrangement

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.

Foreign Policy Watch: India-United States

India out of GSP programme

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GSP

Mains level : Implications of GSP status removal on India

  • The US has announced its intention to “terminate” India’s designation as a beneficiary of its Generalized System of Preferences (GSP) duty concession programme.

Why such move?

  • Under the programme, certain products can enter the US duty-free if beneficiary developing countries meet the eligibility criteria established by its Congress.
  • US said that India had failed to provide assurances to the US for “equitable and reasonable” access to its markets in numerous sectors.
  • US’s refers to India as a “very-high tariff nation” and demands for a “reciprocal tax” on goods from India.

What is GSP?

  • The GSP is a US trade preference programme designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
  • The concept of GSP is very different from the concept of MFN as it provides equal treatment in the case of tariff being imposed by a nation.
  • But in case of GSP, differential tariff could be imposed by a nation on various country whether it is a developed country or a developing country.
  • Both the rules comes under the purview of WTO.
  • GSP provides tariff reduction for least developed countries but MFN is only for not discriminating among WTO members.

India and GSP

  • India has been the biggest beneficiary of the GSP regime and accounted for over a quarter of the goods that got duty-free access into the US in 2017.
  • Exports to the US from India under GSP — at $5.58 billion — were over 12 per cent of India’s total goods exports of $45.2 billion to the US that year.
  • The US goods trade deficit with India was $22.9 billion in 2017.
  • With India exporting $6.3 billion worth of goods to the US under GSP in 2018 and availing duty concession to the tune of only $240 million last year.

Impact of GSP withdrawal

  • Even after US withdrawal of GSP, India continues to enjoy tariff preference from many countries including Australia, Russia and Japan, as well as the European Union (EU), among others.
  • Indian exports to these countries was nearly five times the total exports to the US in 2018.
  • Within the group of countries that provided GSP benefit to India, exports to EU nations were highest, followed by the US, Japan, Russia and Australia, respectively.
  • As exports under GSP accounted for over 11 per cent of India’s total goods exports of $54.4 billion to the US last calendar year, the withdrawal could affect India’s competitiveness in exports.
  • Indian exports from US included organic chemicals, raw materials, iron, steel, furniture, aluminium and electrical machinery.

Foreign Policy Watch: India-United States

[op-ed snap] St. Petersburg consensus: On Russia-China bonhomie

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : increasing cooperation between Russia and China

CONTEXT

Russia and China are strengthening ties amid tensions with the U.S.

Background

  • The bonhomie between China’s and Russia’s leaders at the St. Petersburg International Economic Forum last week was demonstrable.
  • In a sign of the heightened tensions between the U.S. and the two countries, Russia’s annual investment gathering was boycotted by the U.S. Ambassador to Russia, Jon Huntsman.
  • His absence was ascribed to the prevailing environment in Russia for foreign entrepreneurs, typified by the detention of U.S. private equity investor Michael Calvey on allegations of fraud.

Cooperation between China and Russia

  • Conversely, the Chinese telecommunications equipment manufacturer Huawei signed an agreement with Russia’s principal mobile operator to start 5G networks, in a rebuff to Washington’s attempts to isolate the firm internationally.
  • Russian President Vladimir Putin and his Chinese counterpart Xi Jinping made it clear in St. Petersburg that the tensions with the West had only drawn them closer.

Reasons for rift with USA

  • Annexation of Crimea – The rift with Russia began with Moscow’s annexation of Crimea in 2014 and the stand-off in eastern Ukraine that continues.
  • Opposition to the 1,200-km-long Nord Stream 2 gas pipeline –  Russia’s tensions with the U.S. and some EU countries stem also from their opposition to the 1,200-km-long Nord Stream 2 gas pipeline from Russia to Germany.
  • U.S. objections draw in part from its eagerness to export liquefied natural gas to Europe, besides thwarting Moscow’s ambition to dominate the region’s energy market.
  • Russian meddling in the 2016 U.S. presidential election – Far more sensitive has been U.S. Special Counsel Robert Mueller’s inquiry into possible Russian meddling in the 2016 U.S. presidential election.
  • Blacklisting of Huawei – Washington’s blacklisting of Huawei, prohibiting it from selling technology to the U.S. and barring domestic firms from supplying semiconductors to Beijing, falls into a class of its own among international trade disputes.

Historic high in bilatral relations

  • Amid these tensions, in St. Petersburg Mr. Xi and Mr. Putin emphasised that bilateral relations were at a historic high, marked by increased diplomatic and strategic cooperation.
  • China participated in Russian military exercises on its eastern border last September, marking a watershed. Moscow and Beijing, hostile rivals of the Cold War era, have for a while been adopting common positions at the UN Security Council on critical international issues.
  • Bilateral relations are also guided by pragmatism.
  • Central Asia – Russia appears realistic about the growing Chinese economic clout in Central Asia, once firmly in its sphere of influence, thanks to China’s massive infrastructure investments under the Belt and Road Initiative.
  • Northern Sea Route – Chinese cooperation would moreover prove critical for Russia’s elaborate plans to exploit the Northern Sea Route along the Arctic as an alternative transportation hub.

Conclusion

International sanctions have not been very effective in isolating Russia. European states, notably Germany, recognise the importance of engaging with Russia to contain Mr. Putin’s expansionist aims. Equally, President Donald Trump’s “America first” policy is compelling potential rivals to make common cause.

Foreign Policy Watch: India-United States

New START Policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : New START pact

Mains level : Read the attached story

  • Russian has warned to US to withdraw the Obama-era nuclear weapons pact New START due to the US disinterest in its renewal.

New START pact

  • The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
  • The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
  • It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
  • It is one of the key controls on superpower deployment of nuclear weapons.
  • If it falls, it will be the second nuclear weapons treaty to collapse under the leadership of US President Donald Trump.
  • In February, US withdrew from the 1987 Intermediate-Range Nuclear Forces Treaty (INF), accusing Moscow of violating the agreement.

Foreign Policy Watch: India-United States

US asks for social media details of most visa applicants

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Changing visa norms by US and its implication on Indians

  • The US government on updated visa application forms to require nearly all applicants to provide their social media usernames, email addresses, and phone numbers for the past five years.
  • The requirement to provide the additional information is in line with the Trump administration’s decision to ensure more stringent screening of potential immigrants and visitors to the US.

Stringent screening of visa applicants

  • More than a million non-immigrant and immigrant US visas are given to Indians every year.
  • In 2018, 28,073 Indians were issued American immigrant visas, the vast majority of which passed through the “family preference” process.
  • Since 2009, the biggest jump in the number of Indian immigrants to the US — almost 20% — was seen during 2014-2015.
  • But after reaching a peak of 31,360 in 2016, the numbers of immigrant visas issued to Indians dropped in 2017.
  • In 2018, the US issued 10,06,802 nonimmigrant visas to Indians, the third largest national group behind the Chinese and Mexicans, and amounting to a little over 11% of total nonimmigrant visa issuances.

How the new policy will work?

  • The change affects the nonimmigrant visa online application form (DS-160), the paper back-up nonimmigrant visa application (DS-156), and the online immigrant visa application form (DS-260).
  • Applicants will be expected to choose from 20 online platforms, including Facebook, Flickr, Google+, Instagram, LinkedIn, Myspace, Pinterest, Reddit, Tumblr, Twitter, Vine and YouTube, and provide their usernames on the platforms.
  • Among the social media platforms based outside the United States on the list are Tencent Weibo, Twoo, and Youku.

Why the change

  • Trump administration is trying to improve screening processes to protect US citizens, while supporting legitimate travel to the United States.
  • The statement clarified that consular officers will not request user passwords and that the information will be used to determine if the applicant is eligible for a visa under existing US law.
  • Collecting this additional information from visa applicants will strengthen the process for vetting applicants and confirming their identity.

Concerns over the move

  • Social media is an intricate map of its users’ contacts, associations, habits and preferences.
  • Full information on accounts will give the US government access to a visa applicant’s pictures, locations, birthdays, anniversaries, friendships, relationships and a whole trove of personal data.
  • The sweeping surveillance potential of the new regulations could discourage a wide range of visa applicants.
  • Research shows that this kind of monitoring has chilling effects, meaning that people are less likely to speak freely and connect with each other in online communities that are now essential to modern life.

Foreign Policy Watch: India-United States

US has removed India from its currency monitoring watchlist

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Currency Monitoring Watchlist

Mains level : Impact of the move

  • The US administration under Trump has removed India from its currency monitoring watchlist.

Countries in the list

  • India, alongside China, Japan, Germany, Switzerland and South Korea, was placed in the bi-annual currency watch list in October last year.
  • While India and Switzerland have not been mentioned in the latest list, the US has added Ireland, Italy, Malaysia, Singapore and Vietnam to the list, with China continuing to figure in it.
  • While the designation of a country as a currency manipulator does not immediately attract any penalties, it tends to dent the confidence about a country in the global financial markets.

The criterion

  • Countries with a current-account surplus equivalent to 2 per cent of gross-domestic product are eligible for the list, according to modifications made in the new list, down from 3 per cent earlier.
  • Other thresholds include repeated intervention in the currency markets and a trade surplus with the US of at least $20 billion

Why is this significant?

  • Tweaks in currency policy has been used by the Trump administration to browbeat countries that, from Washington’s perspective, have hurt American businesses and consumers.
  • For India, this comes amid the ongoing trade spat between Washington and New Delhi.
  • Trump has repeatedly claimed that India is a “tariff king” and imposes “tremendously high” tariffs on American products.

Foreign Policy Watch: India-United States

[op-ed snap] Loud and clear

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GPS

Mains level : India US trade ties are needed to be normalised by taking prudent and swift measures.

CONTEXT

After a scathing speech by U.S. Commerce Secretary Wilbur Ross in New Delhi this week, it is no longer possible for the government to brush under the carpet its differences with Washington.

Tensed situation

1. The accusation of restrictive barriers – Speaking to Indian and U.S. businesspersons, Mr. Ross lashed out at what he called India’s unfair trade practices and “overly restrictive market access barriers”.

His comments followed a series of measures by the U.S. that have affected India.

2.Harsh measures – These include a refusal to revoke or waive tariff increases made last year on steel and aluminium, an ultimatum that India “zero out” oil imports from Iran by May 2 even without securing comparable alternatives, and the decision to withdraw India’s GSP (Generalised System of Preferences) trade status.

3. Labeling  India as Tariff king – Mr. Ross repeated President Donald Trump’s accusation that India is a “tariff king”, and threatened India with “consequences” if it responded to U.S. tariffs with counter-tariffs, something New Delhi had threatened but not yet implemented in the hope of hammering out a comprehensive trade package.

4.Elusive solution – Despite rounds of talks, however, a package has remained elusive, and it is time for the government to articulate the problem on its hands.

Need for strategic action

Clearly, the strategy of the past year, to ignore the differences in the hope that the problems would be resolved or that the U.S.’s trade war with China would occupy the Trump administration more, has not worked.

1.Working on tariffs –

  • New Delhi and Washington need to make a more determined attempt to sort out issues, starting from scratch if required, with tariffs.
  • While the 50-60% duties on motorcycles and cars and 150% duties on American liquor that India imposes need a second look, the U.S. must see that average tariffs imposed by India (13.8%) are not much higher than those levied by economies such as South Korea and Brazil.

2.E-commerce regulation and medical devices – In addition, the government will need to revisit some of its decisions like data localisation requirements and new e-commerce regulations, which were declared suddenly, while the U.S. must show some flexibility on India’s price caps on coronary stents and other medical devices.

3.Labelling of non-vegetarian dairy products – The U.S. must understand the cultural differences over the labelling of non-vegetarian dairy products.

Conclusion

Building alternative financial Structures – It is unlikely that the Trump administration will temper its “my way or the highway” approach to Iranian oil sales, and New Delhi will have to work closely with other countries to build alternative financial structures to avoid U.S. sanctions.

Push back on unreasonable demands – Where a compromise is not possible, the government should be ready to push back on unreasonable demands.

Foreign Policy Watch: India-United States

[op-ed snap] Taking tensions seriously

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : India- Us ties are not progressing much instead of promises.

CONTEXT

The U.S.’s decision to not extend Iran sanctions waivers, including the one provided to India, has notable implications for India-U.S. relations, given the importance of New Delhi’s energy relationship with Tehran.

 Deleterious Development in bilateral ties

1.Economic Sector

  • It comes on the heels of many other deleterious developments for bilateral ties including the U.S.’s decision to withdraw GSP benefits for Indian exports (in retaliation for Indian tariffs that the U.S. deemed to be prohibitively high) and the Trump administration’s discontent deepening over India’s policies on e-commerce, intellectual property rights and data localisation.
  • These India-U.S. trade and economic tensions aren’t new; the non-security dimension of the relationship has long lagged behind the fast-growing defence side.

Reactions by both sides

  • Both sides have played down these differences and offered reassuring data points:
  • India will scale up oil imports from other top producers;
  • the GSP withdrawal will have minimal impact on India’s economy;
  • the two capitals are working actively on high levels,
  • Most recently through the U.S.-India CEO Forum and the India-U.S. Commercial Dialogue, to ease tensions; and above all the strength of the bilateral relationship can easily withstand all these headaches.

Concerns

  1. long-standing disconnects –  A full-fledged strategic partnership, which both countries endorse, will be difficult to achieve amid such multiple and long-standing disconnects on the trade and economic side.

2. One-sided relationship – Indeed, if bilateral ties are largely driven by technology transfers, arms sales, joint exercises, and foundational agreements on defence, this amounts to a deep but one-sided security relationship, and not a robust and multifaceted strategic partnership.

4.Difficulty in transition – Still, so long as the non-security nuisances affect the bilateral relationship, the shift from a strong security relationship to a bonafide strategic partnership will be difficult.

5. The difference from other partners – After all, one rarely hears complaints or concerns about trade and economic matters in the U.S.’s relations with the U.K., Australia, or Israel, some of its other strategic partners.

Way Forward

  • The U.S. and India have long struggled to agree on what a strategic partnership should look like.
  • Still, no matter how it is defined, any strategic partnership must be broad-based, with trust and cooperation present across a wide spectrum of issues and not just limited to close collaborations in the guns-and-bombs category.
  • In this regard, a true strategic partnership remains, at least for now, elusive between India and the U.S.

Foreign Policy Watch: India-United States

[op-ed snap] Workers and refugees are not criminals

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Refugees are not criminals and they should not be treated in that manner.

CONTEXT

The Mexican border was closed for hours on November 25, 2018 at the San Ysidro Port of Entry to the U.S., after a group of migrants, including children and women, in Tijuana reportedly stormed the area.Global political action is required to reinforce the legitimate identity of a worker.

Rise of Xenophobic tendencies

  • Since the 1990s, not just international but even interregional workers have slowly been pushed into the rubric of ‘criminals’.
  • U.S. President Donald Trump is a prime example of this: his victory was largely founded on his ability to depict international workers, particularly those crossing the U.S.-Mexico border, as ‘criminals’.
  • This tendency is present, though in less obvious versions, in almost all developed and developing countries, including the social welfare democracies of Europe.
  • It is also present within nations, as we in India witnessed in the recent ‘Gujarati’ backlash against workers from Uttar Pradesh and Bihar.
  •  Politicians can garner extra votes by implicitly or explicitly equating international/interregional ‘workers’ with ‘criminals’, and states can openly devise blatantly differential treatment for them — as the children ripped away from their parents and the workers tear-gassed at the U.S. border can testify. This marks a significant development in recent years.

Reasons for labelling refugees as criminals

Most immigrants crossing a border are law-abiding and industrious workers, not ‘criminals’ — this remains the case today, as it was in the past.

1.Nature of capitalism – It longer needs workers as much as it did in the past.

2.Financial speculation –

  • Financial speculation has increasingly dwarfed international trade from the 1990s onwards.
  • More than that, much of financial speculation is based on factors other than the productivity of a sector.  A world dominated by financial speculation does not need workers in two ways:
  • Financial speculation does not depend on the production of workers.

3. Post-humanism –

  • It is used to suggest a world after human beings, a world run by artificial intelligence.
  • Inevitably, for those in power — either in terms of a monopoly on wealth or a monopoly on knowledge — a world of financial speculation leads to a ‘post-human’ world run by artificial intelligence.
  • Once workers become redundant and numbers are sufficient, then, inevitably, one can think complacently of replacing human intelligence with artificial intelligence.

Conclusion

  • Universal Solution – Solution has to be ‘universal’ and global. Global political action is needed to ensure international working rights, linked to human status and not the caprice of state or capital.
  • Otherwise, as the right to work can currently be ensured only by national governments, it will always be used to define other — ‘foreign’ — workers as actual or potential criminals.
  • The threat of monopoly of corporations– Soon it might well become the monopoly of corporations. It is basically being used to criminalise those workers who are not allowed — by nation-states or neoliberal capitalism or both — the legitimate identity of a worker.
  • And as this is a shrinking identity — there are fewer and fewer active workers under the impact of rampant financial speculation — it simply adds to the official metamorphosis of more workers into ‘criminals’.

Foreign Policy Watch: India-United States

India to be treated as NATO ally

Note4Students

From UPSC perspective, the following things are important :

Prelims level : HR 2123

Mains level : India-US strategic relationship

  • American lawmakers have reintroduced a key legislation in their House of Representatives which seeks to advance the US-India strategic relationship.

HR 2123 Bill

  • It seeks to send a powerful signal that defence sales to India should be prioritized according to US-India Strategic Partnership Forum, which had worked on this important legislation.
  • The proposed legislation follows the National Defense Authorization Act (NDAA) of 2017 including special language that designated India as a “Major Defence Partner” of the US.
  • Although powerful in its own right, the NDAA FY 2017 has no legal bearing on the State Department’s body of legislation, nor does it compel the State Department to view defence with India more favorably.
  • To fulfil the spirit and intent of the NDAA 2017, the US-India Enhanced Cooperation Act would amend the Arms Export Control Act to put India on par with NATO allies and Israel, South Korea, New Zealand, Australia and Japan.
  • The two taken together illustrates the major changes that have taken place in the India-US relationship over the past two decades.

Impact of the legislation

  • If enacted, the legislation would ensure that the US State Department treats India as a “NATO ally” for the purposes of the Arms Export Control Act.
  • India is the world’s largest democracy, a pillar of stability in the region, and has shown strong commitments to export control policies.
  • This adjustment to US law will further allow the US-India partnership to flourish in line with our security commitment to the Indo-Pacific region.

Foreign Policy Watch: India-United States

India, US set up first ever secure communication link under COMCASA

Note4Students

From UPSC perspective, the following things are important :

Prelims level : COMCASA

Mains level : India-US strategic partnership

  • Under COMCASA pact, the first-ever secure communication link between the Indian Naval Headquarters and the US Naval Commands was recently set up.
  • This will give India access to the latest US naval intelligence.

Impact of COMCASA

  • With COMCASA in place, India will not only be able to obtain critical defence technologies from the US but also gain access to critical communication network of the US armed forces and real-time intelligence.
  • The US has now also activated the Selective Availability Anti-Spoofing Module GPS system in some of the Indian Air Force’s C-130 and C-17 transport aircraft.
  • The two upgrades will allow both sides to share real-time operational intelligence.
  • India has also been assured that the US will not share data from Indian platforms with another country, nor access such data without prior permission.
  • In due course, the agreement will enable both sides to operate on the same communication systems, thus ensure interoperability among the armed forces of both countries.

Communications Compatibility and Security Agreement (COMCASA)

  • The COMCASA which paves the way for transfer of communication security equipment from the US to India was signed after the first 2+2 last year.
  • Navigate to the page for additional readings:

[Burning Issue] India-US COMCASA Agreement

Foreign Policy Watch: India-United States

[op-ed snap] A reality check

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From the UPSC perspective, the following things are important:

Prelims level: UNSC

Mains level: Impact of China’s Block on listing of Masood Azhar and USA’s efforts to counter the chinese move


NEWS

CONTEXT

The U.S. move to take a listing request for Jaish-e-Mohammad founder Masood Azhar directly to the UN Security Council is an indicator of the frustration of a majority of the Council’s permanent members with China’s refusal to budge on the issue.

Reason for banning Azhar

  • JeM was banned in 2001 with a listing at the UNSC that names Azhar as its founder and financier
  • He was accused of working with al-Qaeda chief Osama bin Laden
  • He was seen by the entire world on TV screens as he was exchanged for hostages at Kandahar following the 1999 Indian Airlines hijack,
  • Since 2001, the JeM and Azhar have claimed responsibility for several terror attacks that resulted in the deaths of dozens of innocent persons, including, most recently, the February 14 attack on a CRPF convoy in Pulwama.

China’s Stand on resolution

  • China has used its veto on Azhar’s listing at the 1267 UNSC Sanctions Committee four times in the past decade, evidently to protect Pakistan.
  • Its stand on Azhar is at variance with the otherwise tough stand on terror in Xinjiang province.
  • Also, it has allowed terrorists and groups based in Pakistan to be listed at the UNSC since 2001 and agreed to “grey list” Pakistan at the Financial Action Task Force for terror financing.
  • Just on Thursday, it joined other UNSC members in passing a resolution against terror financing.

Us recent initiatives on issue

  • With the latest proposal, the U.S. plans to “shame” China by bringing the Azhar listing to a public debate at the UNSC.
  • And if that fails, it is reportedly considering a UN General Assembly statement condemning Azhar.
  • The listing of Azhar is an unfinished task India is justified in pursuing.

Concerns with Us’s proposal

  • However, the latest U.S. move comes with some concerns.
  • To begin with, there is no indication that China is ready to change its stand, particularly in the face of coercion or threat from the U.S., and it could veto this proposal as well.
  • There appears to be little to be gained at present by forcing China further into Pakistan’s corner, especially as New Delhi has said it would pursue the Azhar listing with China with “patience and persistence”, in keeping with its desire not to sacrifice the bilateral relationship over the issue.
  • It is equally unlikely that a world power like China would be moved by the threat of public humiliation.

Conclusion

New Delhi must applaud the strong support the U.S. and the other UNSC members have provided on the issue of cross-border terror threats, and on the vexed issue of Azhar’s listing. But it must be careful not to stake too much on an immediate win at the UNSC vis-a-vis China, and keep its expectations realistic.

Foreign Policy Watch: India-United States

Base Erosion and Profit Shifting (BEPS)

Note4Students

Mains Paper 2: IR| Effect of policies and politics of developed and developing countries on India’s interests

From UPSC perspective, the following things are important:

Prelims level: CBC reports, BEPS

Mains level: India-US trade relations


News

Context

  • India and the U.S. signed an inter-government agreement for the automatic exchange of country-by-country (CbC) reports.
  • This will reduce the compliance burden for Indian subsidiary companies of U.S. parent companies.
  • This is a key step in making India compliant with the Base Erosion and Profit Shifting (BEPS) project, of which it is an active participant.

What is BEPS?

  • Base Erosion and Profit Shifting (BEPS) is a tax avoidance strategy used by multinational companies by exploiting gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
  • In order to combat this, many countries entered into agreements to share tax information with each other to enhance transparency and make such profit shifting that much harder.
  • Here, profits are shifted from jurisdictions that have high taxes (such as the United States and many Western European countries) to jurisdictions that have low (or no) taxes (so-called tax havens).
  • The BEPS Action Plan adopted by the OECD and G20 countries in 2013 recognised that the way forward to mitigate risk from base erosion and profit shifting was to enhance transparency.

CBC Reports

  • Against this background, a template was released in 2014, which outlined how MNEs could report the required information for each tax jurisdiction in which they do business. These are called the country-by-country reports.
  • MNEs are also required to identify each entity within the group doing business in a particular tax jurisdiction, and to provide information about the business activities each entity conducts.
  • This information is to be made available to the tax authorities in all jurisdictions in which the MNE operates.
  • This was seen as placing a huge compliance burden on the subsidiary companies of these MNEs.

Assist this newscard with:

India, US to sign pact for exchange of country-by-country reports

Foreign Policy Watch: India-United States

[op-ed snap]Parallel tracks on trade ties

Note4Students

Mains Paper 2: International relations| Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of India-US trade relations.

Mains level: The news-card analyses the India-US trade relation in recent times, in a brief manner and impact of GSP review.


NEWS

CONTEXT

Recently US took decision to rescind the benefits Indian exports enjoy under the Generalised System of Preferences (GSP) programme.

Is India Responsible for this?

  • It begins with the change in foreign direct investment (FDI) rules in India.
  • The tightened norms that came into effect on February 1 place several restrictions on e-commerce companies, including Walmart-owned Flipkart and Amazon.
  • The unexpected changes came after Walmart, the world’s largest retailer, paid over $16 billion to acquire Flipkart last May.
  • Trump notified Congress of his intention to slap punitive action on India by ending preferential treatment for the country’s exports.
  • Walmart’s reputation for killing small retail businesses influenced New Delhi’s decision to tighten the FDI rules.
  • Economic diplomacy can still defuse the situation and prevent the removal of the GSP benefits .

Background of trade tensions between the two countries

  • The simmering tensions go back to April 2018 when the United States Trade Representative (USTR) launched a review of New Delhi’s eligibility for the GSP programme.
  • New Delhi, in response to Washington’s 25% tariff hikes on steel and 10% levies on aluminium, immediately accused it of unfair trade practices, and, seeking to signal a muscular approach.
  • Bilateral talks since then have failed to ease tensions and India now stares at losing the GSP benefits.
  •  U.S. medical and dairy industries complained that New Delhi is not providing them “equitable and reasonable access to its market.
  •  Data localisation policies deepened the rift.

Tensions Due to Price control over drugs and medical devices

  • New Delhi’s use of price control measures against imported drugs and medical devices has grown noticeably.
  • US. manufacturers complain that in doing so, New Delhi has meted out differential treatment to them vis-à-vis domestic players.
  • The U.S. medical device industry wants price controls on cardiac stents and knee implants withdrawn and would like products to be treated on parity with domestic medical devices.
  • New Delhi has preferred to act against unreasonable price mark-ups through price controls when exactly the same  can be achieved through other types of policy alternatives.
  • The USTR is right in pointing out that price capping counts as a trade barrier.
  • New Delhi can easily address the concerns by replacing price controls with trade margin rationalisation measures.

Impact of losing GPS status

  • India is the largest beneficiary of the GSP.
  • The GSP is aimed at promoting economic development by allowing duty-free entry of products from designated beneficiary countries.
  • The immediate loss for India is preferential access at zero or minimal tariffs to the U.S. in case of about 1,900 products, or about half of all Indian products.
  • New Delhi has downplayed the impact of the proposed withdrawal of benefits, saying exports worth $190 million only are likely to be affected and that the tariff advantage was 4% or more on only 2,165 of a total of 18,770 tariff lines.
  • The loss to the economy would be much larger than what the Department of Commerce is projecting.
  • The actual loss will not be limited to the immediate tariff advantage.
  • Indian exporters are competing for market share in the U.S. with other low-income countries in industries where margins are wafer thin.
  • Even minor price hikes can drive significant drops in export volumes.
  • In which case, losing GSP access will be costlier than the projections.
  • Among price-sensitive products eligible for higher GSP benefits that risk losing out to competition from other countries are processed food, leather products, plastic products, building materials, tiles, hand tools, engineering goods, cycles and made-ups such as pillow/cushion sleeves and woven women’s apparel.

 

 

Foreign Policy Watch: India-United States

India, US to sign pact for exchange of country-by-country reports

Note4Students

Mains Paper 2: IR| Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

From UPSC perspective, the following things are important:

Prelims level: CBC reports

Mains level: India-US trade relations


News

  • India and the US can now exchange country-by-country (CbC) reports filed by the ultimate parent corporations based in either of the countries.
  • This will reduce the compliance burden on their subsidiaries operating out of these countries.

CBC reports

  • The Income Tax Act requires Indian subsidiaries of multinational companies to provide details of key financial statements from other jurisdictions where they operate.
  • This provides the IT department with better operational view of such companies, primarily with regards to revenue and income tax paid.
  • The objective of mandating CbC is to ensure that all relevant tax authorities have access to the same information about an MNC’s value chain and the resulting tax consequences.
  • The provision was a part of the base erosion and profit shifting action plan, and later incorporated in IT Act also.

Why file such reports?

As per the Income-tax Act, a constituent entity of an international group, resident in India, other than a parent entity or an alternate reporting entity of an international group, resident in India, shall furnish the Country-by-Country (CbC) Report for a accounting year within the period as may be prescribed, if the parent entity of the said International Group is resident of a country or territory:

  • where the parent entity is not obligated to file the CbC Report
  • with which India does not have an agreement providing for exchange of the CbC Report OR
  • where there has been a systemic failure of the country or territory and the said failure has been intimated by the prescribed authority to such constituent entity

Why this move?

  • With this, Indian constituent entities of international groups headquartered in USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India.

Foreign Policy Watch: India-United States

[op-ed snap]Life without GSP

Note4Students

Mains Paper 2: International relations| Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of India-US trade relations.

Mains level: The news-card analyses the India-US trade relation in recent times, in a brief manner and impact of GSP review.


NEWS

CONTEXT

The U.S. has ultimately acted on its threat to withdraw concessions granted to Indian imports under the Generalised System of Preferences.

Emerging tensions in trade

  • India-U.S. trade tensions escalated last year when the U.S. took two consecutive decisions to increase import tariffs on steel and aluminium, and place India’s eligibility for GSP benefits under review.
  • Shortly after, India said it would impose retaliatory tariffs on imports from the U.S. and even notified the list of items on which these would apply.
  • The GSP review, however, stretched on, with the two countries holding frequent talks to address the concerns. India, for its part, postponed the deadline for the imposition of the retaliatory tariffs six times; the latest deadline is on April 1.

Reasons to review GSP status

  • Washington’s decision to review India’s GSP status stemmed from complaints from American medical and dairy industries, both of which said India was not providing “equitable and reasonable access to its market”.
  • India has said it had tried hard to cater to most of the U.S. demands and reach an understanding, but key points of difference, especially regarding India’s cultural concerns to do with dairy products, could not be accommodated.
  • The U.S. has been expressing discontent over India’s policies to do with data localisation and FDI rules in e-commerce.

India’s Response

  • Commerce Ministry said that the GSP benefits amounted to only $190 million while India’s total exports under GSP to the U.S. stood at $5.6 billion.

Options before the Indian government

  • Talks on the issue would still continue during the 60-day period after which the GSP decision would come into effect.
  • The other option the government can exercise is to impose retaliatory tariffs on U.S. goods.

Conclusion

  • It bears emphasis that while the actual amounts at stake are relatively small, with even India’s proposed tariffs on the U.S. amounting to just $900 million, the impact on small industries in the country could nevertheless be significant.
  • Export bodies have already said that such industries would lose their market share in the U.S. without fiscal support to help them maintain their edge. In its absence, orders meant for India could go to other GSP countries, signs of which are already evident.

Foreign Policy Watch: India-United States

India downplays impact of U.S. GSP withdrawal

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: GSP

Mains level: Impact of US withdrawal of GSP status to India


News

  • Recently US President referred to India as a “very-high tariff nation” and demanded for a “reciprocal tax” on goods from India
  • Now it has given a 60-day withdrawal notice to India on the Generalized System of Preferences (GSP) benefits extended by US.

GSP benefits to India

  • GSP benefits are envisaged to be non-reciprocal and non-discriminatory benefits extended by developed countries to developing countries.
  • In India’s case the GSP concessions extended by the US amounted to duty reduction of only USD 190 million per annum.

Addressing US objections

  • The US had initiated the review on medical devices and dairy industries, but subsequently included numerous other issues on a self-initiated basis.
  • These included issues related to market access for various agriculture and animal husbandry products, relaxation / easing of procedures related to issues like telecom testing / conformity assessment and tariff reduction on ICT products.

Unacceptable demands

  • On the issue of dairy market access, India has clarified that the source animal had never been fed animal derived blood meal, is non-negotiable given the cultural and religious sentiment, the requested simplified dairy certification procedure and without diluting this requirement was considered.
  • On reduction of our IT duties, India’s duties are moderate and not import stopping.
  • Any MFN duty reduction would almost entirely benefit third countries.
  • Accordingly, India extended willingness to extend duty concessions on specific items in which there is a clear US interest.

US trade deficit has also lowered

  • Due to various initiatives resulting in enhanced purchase of US goods like oil and natural gas and coal the US trade deficit with India has substantially reduced in calendar years 2017 and 2018.
  • The reduction is estimated to be over USD 4 Billion in 2018, with further reduction expected in future years on account of factors like the growing demand for energy and civilian aircrafts in India.
  • This reduction has happened in the face of a rising overall US trade deficit, including with some other major economies.
  • India is also a thriving market for US services and e-commerce companies like Amazon, Uber, Google and Facebook with billions of dollars of revenue.

Way Forward

  • The issue of Indian tariffs being high has been raised from time to time.
  • It is pertinent that India’s tariffs are within its bound rates under WTO commitments, and are on the average well below these bound rates.
  • On developmental considerations there may be a few tariff peaks, which is true for almost all economies.
  • India was agreeable to a very meaningful mutually acceptable package on the above lines to be agreed to at this time, while keeping remaining issues under discussion in the future.

Back2Basics

Generalized System of Preferences

  • The GSP is one of the oldest trade preference programmes in the world and was designed to provide zero duties or preferential access for developing countries to advanced markets.
  • The U.S. GSP programme was established by the U.S. Trade Act of 1974 and promotes economic development by eliminating duties on thousands of products when imported from one of the 129 designated beneficiary countries and territories.
  • In April 2018, the Office of the United States Trade Representative (USTR) announced that it would review the GSP eligibility of India, Indonesia, and Kazakhstan.
  • The proposed review for India was initiated in response to market access petitions filed by the U.S. dairy and medical device industries due to recent policy decisions in India, which were perceived as trade.

Foreign Policy Watch: India-United States

[op-ed snap] A dialogue, an opportunity

Note4Students

Mains Paper 2: International relations | Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of the India-US trade relations.

Mains level: The news-card analyses the issues and concerns w.r.t India-US trade relations, in a brief manner.


Context

  • The US commerce secretary will be visiting India this week amid the reports of trade tensions between the two countries.

Opportunity to step back from confrontation

  • The US might withdraw India’s trade benefits under the so-called Generalised System of Preferences that Delhi has enjoyed since the mid-1970s.
  • This week’s dialogue must be seen as an opportunity to step back from confrontation and take a more strategic approach to resolving the current differences over a large number of issues.
  • They include market access, reciprocity in tariffs, trade deficit, predictable investment rules and data localisation to mention a few.
  • Over the last two decades, Delhi and Washington have dealt with and resolved far more complex issues.

Issues and Concerns

  1. To recognise the value of the trade relationship between the two countries and its huge potential
  • There was a time, less than two decades ago, when “flat as a chapati” was the preferred label for US-India trade relations.
  • Since then, the annual two-way trade has grown rapidly to touch nearly $130 billion last year (including trade and services).
  • For India, the US is probably the most important trade partner today and will remain so for a long time.
  • For Washington, the size of the trade volume with India is quite low in comparison with its other key partners like Canada, Mexico, the European Union, Japan and China.
  • But the potential remains high as India emerges as the world’s third-largest economy.
  • It should, therefore, be the highest political priority for India and the US to turn this trade relationship into a deeper and more sustainable one.

2. Both countries need to be sensitive to the domestic political considerations

  • As India enters the election mode, this is perhaps the worst possible moment for the US to take actions like the withdrawal of GSP benefits.
  • The volume of Indian exports involved is quite small, but the political impact could be way out of proportion.
  • On its part, Delhi needs to pay greater attention to the profoundly altered environment in Washington on trade related issues.

“Free trade” to “fair trade”

  • Trump has begun to turn America, for long, the champion of “free trade”, into an advocate of “fair trade”.
  • Trump has convinced himself that the rest of the world has taken advantage of America’s open market.
  • He is now ready to bring the whole house down if the rest of the world does not address his grievances.
  • India must bet Trump’s concerns about trade outlast his stint as US president.

3. Turning the two “estranged democracies” into “indispensable strategic partners”

  • It is quite easy to forget the personal role of the Indian prime minister and the US president in turning the two “estranged democracies” into “indispensable strategic partners” in the 21st century.
  • In India, successive Prime Ministers Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi chose to defy conventional political and bureaucratic wisdom to advance the country’s relationship with the US.
  • Washington has little reason to politically embarrass Prime Minister Modi — who has moved the security and political relationship beyond any one’s imagination — on trade issues just before a tough general election.
  • Delhi, on the other hand, should appreciate the great political value of a trade deal with India for Trump and the importance of having the White House on India’s side.

Never stop negotiating

  • Finally, the secret to successful engagement with the US involves two simple propositions — never stop negotiating and keep making deals small or big.
  • India often can’t close a negotiation because it’s opening bid tends to remain the final position.
  • Americans, on the other hand, are always open to splitting the difference, finding a compromise and moving on.

Way Forward

  • It was with the ability to give and take, while keeping the larger and long-term interests in mind, that India and the US were able to overcome the multiple problems in the nuclear and defence negotiations during the last two decades.
  • Continuous forward movement however slow and incremental is critical.
  • Unlike security issues, trade is not a zero-sum-game and should be more amenable to deal-making.
  • Given the return of geopolitical confrontation and the unfolding rearrangement of the global trading order, “doing nothing” is not an option for Delhi.

Foreign Policy Watch: India-United States

[op-ed snap] No zero-sum games on India-U.S. trade hostilities

Note4Students

Mains Paper 2: International relations| Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of India-US trade relations.

Mains level: The news-card analyses the India-US trade relation in recent times, in a brief manner.


Context

  • There are alarm bells in India over a possible decision by the U.S. Trade Representative to withdraw the Generalised System of Preferences (GSP) status.

Background

  • Under this, India is able to export about 2,000 product lines to the U.S. under zero tariff.
  • Generalised System of Preferences (GSP) was first extended to India in 1976 as part of a global concession by the U.S. to help developing countries build their economies.
  • The revocation of the GSP will be a blow to Indian exporters, and the biggest in a series of measures taken by the Trump administration against India to reduce its trade deficit.

“Unequal tariffs” from India

  • President Donald Trump’s case on what he calls “unequal tariffs” from India rests on the trade relationship in favour of India.
  • Indian exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were $26.7 billion.
  • The measures are in line with Mr. Trump’s campaign promises.

The case of Harley-Davidson motorcycles

  • On the matter of Harley-Davidson motorcycles, Trump spoke directly to Prime Minister Narendra Modi on at least three occasions, demanding that India zero out tariffs to match U.S. rates on Indian motorcycles.

US action against Indian products

  • In March 2018, the U.S. began imposing tariffs on several Indian products.
  • In April, the USTR began a review of India’s GSP status, based on complaints of trade barriers from India it had received from the dairy industry and manufacturers of medical devices.
  • In November the U.S. withdrew GSP status on at least 50 Indian products.

Indian response

  • In retaliation, India proposed tariffs of about $235 million on 29 American goods, but has put off implementing these five times in the past year in the hope that a negotiated trade settlement will come through.
  • The latest deadline expires on March 1.
  • India has also attempted to address the trade deficit with purchase of American oil, energy and aircraft.

Present situation

  • There have been dozens of rounds of talks between officials over the past few months, but no breakthrough.
  • U.S. officials say the decision on data localisation for all companies operating in India, and the more recent tightening norms for FDI in e-commerce have aggravated the situation.

Way Forward

  • Both sides should work towards calling a halt to trade hostilities and speed up efforts for a comprehensive trade “package”, rather than try to match each concern product by product.
  • The U.S. must realise that India is heading into elections, and offer more flexibility in the next few months.
  • India must keep in mind that the larger, global picture is about U.S.-China trade issues, and if a trade deal with the U.S. is reached, India could be the biggest beneficiary of business deals lost by China.
  • The visit of U.S. Commerce Secretary to India this week will be watched not as much for substance, as for signals that New Delhi and Washington understand the urgency in breaking the deadlock.

Foreign Policy Watch: India-United States

U.S. may end zero-tariffs for India

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: GSP, New FDI norms

Mains level: Read the attached story


News

  • India could lose a vital U.S. trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies.

US sought action: GSP withdrawal

  1. A move to withdraw the Generalized System of Preferences (GSP) from India,
  2. India is the world’s largest beneficiary of a scheme that has been in force since the 1970s.
  3. However the US plans to the strongest punitive action against India, vowing to reduce the U.S. deficit with large economies.

What is GSP?

  1. Generalized System of Preferences (GSP) is a preferential tariff system under which developed nations extend reduced MFN tariffs (Most Favoured Nation) or duty-free entry of certain goods into their markets, to the developing nations.
  2. The developed countries, or the countries that extend this trade preference are called donor countries, and the benefit-receiving countries are called beneficiary countries.
  3. The GSP is an exemption from the MFN principle under which the WTO members are obliged to treat all other WTO members equally as their ‘most favoured’ trading partner-nation.
  4. GSP benefits Indian exporters indirectly through the benefits that are gained by the importers via reduced tariffs and/or duty-free entry.

Bone of Contention: New FDI norms in E-com

  1. The trigger for the latest downturn in trade ties was India’s new rules on e-commerce that restrict the way of famous e-com sites.
  2. The business in a rapidly growing online market set to touch $200 billion by 2027 if not restricted.
  3. India has courted foreign investment as part of his Make-in-India campaign to turn India into a manufacturing hub and deliver jobs to the millions of youth.
  4. Trump, for his part, has pushed for U.S. manufacturing to return home as part of his Make America Great Again campaign.

What are the new norms?

  1. At the heart of the problem is India’s view on the two e-commerce models that exist today: marketplace and inventory.
  2. India allows 100 percent foreign direct investment (FDI) in the marketplace model of e-commerce, which it defines as a tech platform that connects buyers and sellers.
  3. India has not allowed FDI in inventory-driven models of e-commerce.
  4. The inventory model, which Walmart and Amazon use in the United States, is where the goods and services are owned by an e-commerce firm that sells directly to retail customers.
  5. The restriction is aimed largely at protecting India’s vast unorganized retail sector that does not have the clout to purchase at scale and offer big discounts.
  6. It means that Amazon and Flipkart can only operate the marketplace model in India.

Why put restrictions on E-coms?

  1. The e-commerce giants in India have developed complicated seller structures that helped them comply with the inventory control rule while exercising some level of control over inventory.
  2. Traders and small online sellers have accused them of violating the spirit of the law and of using the structures to offer deep discounts, accusations they deny.
  3. The new rules state that the inventory of a seller or vendor will be seen as being controlled by a marketplace if the vendor purchases more than 25 percent of its inventory from the marketplace, or any of its group firms.
  4. The rule would not allow sellers on these giant e-coms to make bulk purchases from the wholesale units of the companies.

Foreign Policy Watch: India-United States

[op-ed snap] Raja Mandala: Alliances and strategic autonomy

Note4students

Mains Paper 2: IR| Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

From UPSC perspective, the following things are important:

Prelims level: Basics aspects of India’s Foreign Policy .

Mains level: The news-card analyses what should be the Indian Foreign Policy in context of present world order, in a brief manner.


Context

  • Is “non-alignment” a special attribute of Indian foreign policy? Given Delhi’s continuing preoccupation with the idea of non-alignment, most visible recently at last week’s Raisina Dialogue in Delhi, one would think it is.

Background

  • More than a hundred countries are members of theNon-Aligned Movement (NAM). They swear, at least formally, by the idea of non-alignment and show up at the triennial NAM summits. But few of them think of non-alignment as the defining idea of their foreign policies. Even fewer believe it is worth debating on a perennial basis.
  • The governments in Delhi might have been the last, but they have certainly moved away from the straitjacket of non-alignment — in practice if not in theory.

Issue

India is now “aligned”

  • The rhetoric has changed under the present government. As Foreign Secretary Vijay Gokhale put it in response to a question at the Raisina Dialogue, India is now “aligned”. “But the alignment is issue-based. “It is not ideological. That gives us the capacity to be flexible, gives us the capacity to maintain our decisional autonomy.”
  • If non-alignment belongs to the past, is “strategic autonomy” something unique to India? It isnot really. All countries, big and small, try to maximise their freedom of action.
  • And the autonomy that a nation can exercise depends on its specific circumstances such as size, location, comprehensive national power, and the nature of the threats among many other things.

The “independent” and “dependent” foreign policy

  • Take, for example, Pakistan. In Delhi’s foreign policy mythology — India chose an “independent” foreign policy and Pakistan a “dependent” one.
  • As the Cold War between America and Soviet Russia enveloped the world soon after Partition and Independence in the middle of the 20th century, India and Pakistan seemed to take opposite diplomatic paths.
  • India embraced non-alignment and refused to endorse America’s anti-Communist alliances.
  • Pakistan pooh-poohed non-aligned solidarity, calling it “zero plus zero is equal to zero”. It signed a bilateral defence pact with the US and joined the two regional security blocs — called Central Treaty Organisation (CENTO) in the Middle East — and the South East Asia Treaty Organisation (SEATO) in the Far East.

How then this change in stance?

  • The seeming ideological clarity that both India and Pakistan brought to their respective foreign policies dissolved quickly in the real world.
  • India, which had refused to join the West in isolating communist China and sought to befriend it, ended up in a conflict with Beijing. And when the border war broke out in 1962, India turned to the United States for military assistance.
  • Pakistan, which was quick to join the anti-Communist bandwagon did not take long to discover the convergence of interests with Maoist China.
  • Pakistan’s delegation went into the Afro-Asian summit at Bandung, Indonesia, in 1955 with an anti-China orientation. It returned with an understanding of Pakistan’s shared interests with Beijing on balancing India.
  • The Chinese premier Zhou Enlai convinced Pakistan leader Mohammed Ali Bogra that Communist China is not a threat to Pakistan. Bogra, in turn, made it clear that Pakistan’s problem is not with communist expansion in Asia but with India.
  • The rest — the making of a very special bilateral relationship — is history. China has rarely complained since about Pakistan’s long-standing military relationship with the US.

Strategic Autonomy

  • That Pakistan could warm up to China so soon after it joined America’s anti-Communist alliances in Asia is probably one of the most impressive examples of exercising “strategic autonomy”. It was so successful that Pakistan became a bridge between China and the US at the turn of the 1970s.
  • Indian foreign policy community continues to be troubled by the question of alliances and autonomy when it comes to dealing with China and the US. It could, perhaps, find a thing or two from Pakistan that has managed these relationships quite well.

New Delhi’s fear of Alliances

  • Delhi’s traditional fear of alliances is based on a profound misreading of what they might mean.
  • Alliances are not a “permanent wedlock” or some kind of a “bondage”. They are a political/military arrangement to cope with a common threat. When the shared understanding of the threat breaks down, so does the alliance.
  • A couple of examples. To cope with the American threat Mao Zedong aligned with Soviet Russia in 1950. Two decades later, he moved closer to America to counter Russia. Now China is once again buddies with Russia in trying to limit American influence in Eurasia.
  • When Communist China walked into Tibet in 1949, the monarchy in neighbouring Nepal got India to sign a treaty in 1950 offering protection. Not too long after, Kathmandu figured China is not a threat and began to undo the security provisions of the 1950 treaty.

Conclusion

  • Not many countries in the world today are members of alliances. The few alliances that have survived since the Second World War are undergoing stress on the supply as well as demand side.
  • In America, President Donald Trump is questioning the costs and benefits of these alliances.
  • Presidents Tayyip Erdogan of Turkey and Moon Jae-in of South Korea, both treaty allies of the US, hardly share American perceptions on the regional threat in the Middle East and the Korean Peninsula respectively.
  • Indiais a large and globalised economy with “big stakes in all parts of the world”.
  • The Indian foreign policy debate would be less metaphysical if it stops obsessing about “non-alignment” and “strategic autonomy” and starts focusing on a pragmatic assessment of India’s interests and the best means to secure them — including partnerships and coalitions — against current and potential threats.

Foreign Policy Watch: India-United States

Trump Signs Asia Reassurance Initiative Act Into Law

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: ARIA Act

Mains level:  US influence in Asia-Pacific


News

  • US President Trump has signed an Act designed to counter the encroaching influence and growing threat from China and to reinvigorate US leadership in the Indo-Pacific region.

Asia Reassurance Initiative Act (ARIA)

  1. The ARIA aims to establish a multifaceted U.S. strategy to increase U.S. security, economic interests, and values in the Indo-Pacific region.
  2. ARIA draws attention to U.S. relations with China, India, the ten member states of the Association of Southeast Asian Nations (ASEAN), and Northeast Asian allies Japan and South Korea.
  3. It will authorize $1.5 billion in spending for a range of U.S. programs in East and Southeast Asia and develop a long-term strategic vision and policy for the Indo-Pacific region.
  4. The ARIA includes multiple provisions of Trump which have identified the Indo-Pacific as a strategic region of particular priority.

Regional Perspective

  1. North Korea: The act aims to justify the termination of U.S. support for any UNSC resolutions sanctioning North Korea or the lifting of any unilateral U.S. sanctions on North Korea.
  2. Taiwan: The ARIA encourages the travel of high level US officials to Taiwan, in accordance with the Taiwan Travel Act which was made law in 2018.
  3. South China Sea: ARIA calls on the US to support the ASEAN nations as they adopt a code of conduct in the South China Sea with China.

Impact on ties with India

  1. ARIA allocates a budget of $1.5 billion over a five-year period to enhance cooperation with America’s strategic regional allies in the region.
  2. Stressing the designation of India as a major defense partner, which is unique to India, the new law elevates defense trade and technology cooperation.
  3. The new law cites China’s illegal construction and militarization of artificial features in the South China Sea and coercive economic practices.

Other perspectives

  1. The Act notes the increased presence throughout Southeast Asia of the Islamic State and other international terrorist organizations that threaten the US.
  2. The law also refers to Quadrilateral Security Dialogue between US, Australia, India, and Japan.
  3. It however clarifies that such a dialogue is intended to augment, rather than to replace, current mechanisms.

Foreign Policy Watch: India-United States

US confirms pull out from INF treaty

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Intermediate-Range Nuclear Forces (INF) Treaty

Mains level:  USA’s disregard of bilateral and multilateral treaties


News

  • The United States of America will pull out of the Intermediate-Range Nuclear Forces (INF) Treaty, confirmed Russian authorities.

Background

  1. Washington publicly announced its plans to withdraw from the treaty (INF) already in October.
  2. Through high-level bilateral channels it was confirmed that this decision was final and there wasn’t any attempt to initiate dialogue.

Provisions of the treaty

  1. Under the INF treaty, the US and Soviet Union agreed not to develop, produce, possess or deploy any ground-based ballistic and cruise missiles that have a range between 500 and 5,500 km.
  2. It exempted the air-launched and sea-based missile systems in the same range.
  3. The INF treaty helped address the fears of an imminent nuclear war in Europe.
  4. It also built some trust between Washington and Moscow and contributed to the end of the Cold War.

Loopholes in the treaty

  1. It left the other nuclear weapon powers free to develop ground-based intermediate-range forces
  2. In the age of nuclear superpowers, it did not seem to matter.
  3. Since then, many countries have developed missiles in the range of 500 to 5,500 km, including India, Pakistan and North Korea.
  4. Nearly 90 per cent of China’s vast missile armoury — estimated at around 2,000 rockets — is in the intermediate range and would be illegal if Beijing were to be a part of the INF treaty.

Root cause of USA’s withdrawal

  1. Although the US cites Russian violations of the INF treaty as the immediate cause for the withdrawal, coping with China’s massive rocket force appears to be the more important reason for the decision.
  2. The expansive Chinese land-based intermediate range missile forces threaten the American naval ships deployed in the Western Pacific and target US military bases in Japan.
  3. The vulnerability of American military presence in the Pacific to Chinese missiles, in turn, undermines the credibility of American security commitment to its Asian allies.

Foreign Policy Watch: India-United States

US exempts India from certain sanctions for development of Chabahar port in Iran

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: South Asian Strategy

Mains level: Impact of US-Iran strain on India’s developmental initiatives in Afghanistan


News

  • The United States has exempted India from the imposition of certain sanctions for the development of the strategically-located Chabahar port in Iran.

Details of the Exemption

  1. After extensive consideration, US has provided for an exception from imposition of certain sanctions under the Iran Freedom and Counter-Proliferation Act of 2012,.
  2. It included development of Chabahar port, construction of an associated railway and for shipment of non-sanctionable goods through the port for Afghanistan’s use, as well as imports of Iranian petroleum products.
  3. Eight countries namely India, China, Italy, Greece, Japan, South Korea, Taiwan and Turkey were temporarily allowed to continue buying Iranian oil.
  4. They have shown a “significant reduction” in oil purchase from the Persian Gulf country.

Significance

  1. The decision signifies India’s role in development of the port on the Gulf of Oman, which is of immense strategic importance for the development of war-torn Afghanistan.
  2. This exception relates to reconstruction assistance and economic development for Afghanistan.
  3. These activities are vital for the ongoing support of Afghanistan’s growth and humanitarian relief.

Trump’s South Asia Strategy

  1. US decision to give India an exemption from the imposition of certain sanctions for the development of the port is driven by the South Asian strategy, which was announced by Trump in August.
  2. It states that India has a major role in bringing peace and development in Afghanistan.
  3. The South Asia strategy underscores our ongoing support of Afghanistan’s economic growth and development as well as its close partnership with India.

Foreign Policy Watch: India-United States

[op-ed snap] Raja Mandala: India, China and the INF Treaty

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Intermediate-Range Nuclear Forces (INF) Treaty

Mains level: Recent trend of USA’s disregard of bilateral and multilateral treaties and its impact on India as well as global geopolitics


Context

USA’s withdrawal from INF Treaty

  1. US President Donald Trump recently announced about American plans to withdraw from the three-decade-old missile treaty with Russia
  2. The treaty that Trump wants to discard is the Intermediate Range Nuclear Forces (INF) Treaty that was concluded in 1987 by Presidents Ronald Reagan and Mikhail Gorbachev
  3. It has been hailed as one of the most important arms control agreements between Washington and Moscow

Provisions of the treaty

  1. Under the INF treaty, the US and Soviet Union agreed not to develop, produce, possess or deploy any ground-based ballistic and cruise missiles that have a range between 500 and 5,500 km
  2. It exempted the air-launched and sea-based missile systems in the same range

Importance of the treaty

  1. The INF treaty helped address the fears of an imminent nuclear war in Europe
  2. It also built some trust between Washington and Moscow and contributed to the end of the Cold War

Loopholes in the treaty

  1. It left the other nuclear weapon powers free to develop ground-based intermediate-range forces
  2. In the age of nuclear superpowers, it did not seem to matter
  3. Since then, many countries have developed missiles in the range of 500 to 5,500 km, including India, Pakistan and North Korea
  4. Nearly 90 per cent of China’s vast missile armoury — estimated at around 2,000 rockets — is in the intermediate range and would be illegal if Beijing were to be a part of the INF treaty

Root cause of USA’s withdrawal

  1. Although the US cites Russian violations of the INF treaty as the immediate cause for the withdrawal, coping with China’s massive rocket force appears to be the more important reason for the decision
  2. The expansive Chinese land-based intermediate range missile forces threaten the American naval ships deployed in the Western Pacific and target US military bases in Japan
  3. The vulnerability of American military presence in the Pacific to Chinese missiles, in turn, undermines the credibility of American security commitment to its Asian allies

Inclusion of China in the treaty

  1. In announcing the intent to withdraw, Trump said the only way to sustain the treaty is for Russia to stop the violations and China to join the INF treaty
  2. China has already rejected the proposition
  3. It has always refused to join the US-Russian arms control agreements

Impact of a pan-Asia INF treaty on India

  1. If the US deploys a new INF in Asia, to enhance its capacity to deter China, Beijing is bound to react
  2. The focus of a potential new arms race appears to be less on traditional nuclear-armed missiles, but precise hypersonic missiles (which travel at least five times the speed of sound) equipped with conventional warheads
  3. India has an effort underway on hypersonic missiles — part indigenous and part in collaboration with Russia to build on the supersonic Brahmos missiles that travel more than twice as fast as sound
  4. As the US conflict with Russia deepens, Delhi’s partnership with Moscow on advanced military systems will come under increasing scrutiny and pressure
  5. Russia’s tightening military embrace with China also casts a shadow over defence ties between Delhi and Moscow
  6. Delhi, then, will have to think long and hard about its missile programme by focusing on the urgent need to ramp up the domestic effort as well as diversify its international collaboration on hypersonic weapons

Way forward

  1. India needs a significant force of hypersonic missiles to better control escalation to the nuclear level if there is another Doklam-like military confrontation with China
  2. Delhi will also have to cope with the inevitable proliferation of hypersonic systems in its neighbourhood

Foreign Policy Watch: India-United States

Explained: How a country gets a currency manipulator tag

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests.

From UPSC perspective, the following things are important:

Prelims level: Currency Manipulation

Mains level: Impact of unilateral moves by US on India and global economy


News

Context

  1. The uncertainties of US Treasury Department that it would be adding India to the list of potential currency manipulators countries or in the watch-list is often seen in news.
  2. All this comes against the backdrop of growing global trade tensions.

What is Currency Manipulation?

  1. Currency manipulation refers to actions taken by governments to change the value of their currencies relative to other currencies in order to bring about some desirable objective.
  2. The typical claim – often doubtful – is that countries manipulate their currencies in order to make their exports effectively cheaper on the world market and in turn make imports more expensive.

Assessment Criteria used by US

  1. The US Treasury has established thresholds for the three criteria.
  • First, a significant bilateral trade surplus with the US is one that is at least $20 billion;
  • Second, a material current account surplus is one that is at least 3% of GDP; and
  • Third, persistent, one-sided intervention reflected in repeated net purchases of foreign currency and total at least 2% of an economy’s GDP over a year.
  1. The Treasury’s goal is to focus attention on those nations whose bilateral trade is most significant to the US economy and whose policies are the most material for the global economy.

India in the Watch-list

  1. The US Treasury, in its report, said no major trading partner met the criteria to be designated as manipulating its currency.
  2. It has kept India, China, Japan, South Korea, Germany and Switzerland on the monitoring list.
  3. It said that India’s circumstances have shifted markedly, as the RBI’s net sales of forex over the first six months of 2018 led net purchases fall to $4 billion, or 0.2% of GDP.
  4. The rupee has depreciated by 13.05% this fiscal.

Do India need to worry?

  1. India has a goods trade surplus with the US of $23 billion in 2017 compared to $375 billion trade surplus with China.
  2. India is set to import $2 billion of crude oil and around $2 billion of LNG from the US
  3. Growing energy imports can reduce the surplus to below $20 billion.

Way Forward

  1. India has traditionally tried to balance between preventing excess currency appreciation on the one hand and protecting domestic financial stability on the other.
  2. India being on the watch list could restrict the RBI in the foreign exchange operations it needs to pursue to protect financial stability.
  3. This comes when global capital flows threaten to overwhelm domestic monetary policy.
  4. The two most obvious consequences could be an appreciating rupee as well as excess liquidity that messes with the interest rate policy of the RBI.
  5. Indian policymakers have to be sensitive for the unpredictable nature of policy-making in the US under Trump, especially concerning global trade.

Foreign Policy Watch: India-United States

[op-ed snap] The new deals — on U.S.-Mexico-Canada pact

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: NAFTA, USMCA

Mains level: Protectionist approach being taken by the US and its impact on global economy


Context

Replacing NAFTA

  1. After more than a year of intense negotiation, the U.S., Canada and Mexico managed to arrive at a revised trade agreement on Sunday to replace the quarter-century-old North American Free Trade Agreement (NAFTA)
  2. The deal does not do anything new to promote the cause of free trade among the North American nations but it achieves the objective of averting any significant damage to the international trade system
  3. This is the best anyone could possibly hope for in the midst of the global trade war that began this year

Details of the new deal

  1. The U.S.-Mexico-Canada Agreement (USMCA) makes several changes to NAFTA
  2. There are tweaks to production quotas applied to Canada’s dairy industry
  3. Under the new deal, Canada will have to allow American dairy producers to compete against locals, a move that will favour Canadian consumers
  4. The U.S. agreed to retain Chapter 19 and Chapter 20 dispute-settlement mechanisms as a compromise
  5. This will help Canada and Mexico deal with protectionist duties imposed by the U.S.

Why the deal is not a big achievement?

  1. Not all the amendments are congenial to the prospects of free trade
  2. Unlike other free trade deals entered into by governments, the present one attempts to micromanage trade in a way that benefits specific interest groups at the cost of the overall economy
  3. The new labour regulations and rules of origin will add to the cost of production of goods such as cars, thus making them uncompetitive in the global market
  4. The USMCA mandates a minimum wage that is above the market wage on labour employed in Mexico, yet another move that will make North America a tough place to do business
  5. Foreign investors may now have fewer protections from unfriendly local laws as the accord does away with resolutions through multilateral dispute panels for certain sectors

Prospects for India

  1. Announcing the USMCA, Mr Trump signalled he would now extend his ‘all or nothing’ approach to resetting trade ties with the European Union, China, Japan and India
  2. Terming India “the tariff king”, he said it had sought to start negotiations immediately
  3. India’s trade negotiators will now have their task cut out if they want to protect exporters’ access to one of the country’s largest markets for its services and merchandise

Foreign Policy Watch: India-United States

[op-ed snap] 2+2 = ?: On India-US defence relationship

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: COMCASA, 2+2 dialogue

Mains level: Renewed vigour in India-US relationship and its advantages for India


Context

Successful 2+2 dialogue

  1. The India-U.S. defence relationship has been given a significant boost with the three agreements signed after the inaugural 2+2 Dialogue in Delhi
  2. These are:
  • the Communications Compatibility and Security Agreement (COMCASA)
  • “hotlines” between the Defence and Foreign Ministers of both countries
  • the first tri-services military exercises between the two countries

Importance of COMCASA

  1. COMCASA is the third of four “foundational”, or enabling, agreements signed by India after more than a decade of negotiations
  2. It is perceived as an inevitable consequence of a large amount of U.S. defence hardware it has been purchasing
  3. This will increase, going forward, given the U.S. decision to include India in the top tier of countries entitled to Strategic Trade Authorisation (STA-1)

Limiting China’s expansion

  1. Both sides agreed to cooperate on fighting terrorism, advancing “a free, open, and inclusive Indo-Pacific region” and promoting sustainable “debt-financing” in the region
  2. The last two points are clearly aimed at Beijing’s role in the South China Sea and the Belt and Road Initiative projects, respectively

Concerns that remain

  1. While trade was addressed, India did not receive a clear-cut assurance of its GSP (Generalised System of Preferences) status being restored, or of waivers on steel and aluminium tariffs imposed by Washington
  2. U.S. officials said clearly that they expect India to increase imports of American oil and gas as well as aircraft in order to wipe out the trade surplus India enjoys
  3. The U.S.’s other demand, to “zero out” oil imports from Iran by November, is simply unreasonable
  4. It would hurt India dearly not only because of costs at a time when the dollar is strengthening and fuel prices are going up but also in terms of its substantial engagement with Iran
  5. No public statement was made on what the U.S. will do on India’s investment in the Chabahar port once its full sanctions kick in on November 4
  6. American officials also gave no firm commitment in their statements that India will receive a waiver to purchase Russian hardware, beginning with the S-400 missile system

Way Forward

  1. The 2+2 discussions, held after two previous cancellations this year, brought much-needed focus on the India-U.S. relationship after months of drift and occasional discord
  2. India appears to have taken a leap of faith on its own concerns, expecting that the Trump administration will come through on waiving sanctions and being more flexible on trade issues
  3. Delhi must work with Washington in the next few months to ensure that the benefits from the 2+2 dialogue don’t add up only on the other side

Foreign Policy Watch: India-United States

India signs landmark defence pact with U.S.

Note4Students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: 2+2 Dialogue, COMCASA, LEMOA, GSOMIA

Mains level: The newscard talks of success of the 2+2 Dialogue.


News

Fruitful conclusion of 2+2 Dialogue

  1. India and the United States sealed the landmark Communications Compatibility and Security Agreement (COMCASA) that will lead to a new generation of bilateral military partnership.
  2. Apart from the agreement both sides also called on Pakistan to stop terrorist strikes on other countries and urged for maritime freedom in the Indo-Pacific region.

What will COMCASA provide?

  1. India has already signed two of them General Security of Military Information Agreement (GSOMIA) in 2002 and the Logistics Exchange Memorandum of Agreement (LEMOA) in 2016.
  2. The COMCASA will allow the U.S. to transfer specialised equipment for encrypted communications for US origin platforms like C-17, C-130 and P-8I aircraft.
  3. It comes into force immediately and is valid for 10 years.

Specific additional provisions of the Agreement

  1. Data acquired through such systems cannot be disclosed or transferred to any person or entity without India’s consent.
  2. Both countries will implement this agreement in a manner that is consistent with the national security interests of the other.
  3. India and the U.S. will also hold a first-ever tri service joint exercise on the east coast of India in 2019.

Role for private sector

  1. Both sides announced their readiness to begin negotiations on an Industrial Security Annex (ISA) that would allow Indian private sector to collaborate with the U.S. defence industry.
  2. The GSOMIA allows sharing of classified information from the U.S. government and American companies with the Indian government and defence Public Sector Undertakings (PSUs) but not with Indian private companies.
  3. To further defence innovation, a Memorandum of Intent was signed between the U.S. Defense Innovation Unit (DIU) and the Indian Defence Innovation Organization – Innovation for Defence Excellence (DIO-iDEX).
  4. This MoI will look into joint projects for co-production and co-development projects through the Defense Technology and Trade Initiative (DTTI).

Foreign Policy Watch: India-United States

Trade talks stuck as U.S. presses oil, aircraft sales to India

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: The newscard talks of uncertainty of Trump administration over its strategic relation with India merely over India’s trade surplus with the US.


News

Crosshairs of Trump administration

  1. India and the United States are in a deadlock over contentious trade issues.
  2. This comes after the Trump administration sought a formal commitment of additional purchases of $10 billion annually for the next three years, as part of a trade agreement under negotiation.
  3. has a surplus of $23 billion in trade with America, and the U.S. wants to wipe that off by forcing more imports by New Delhi, as part of a proposed trade agreement.

Reviewing the GSP status for India

  1. The USTR had launched a review of India’s GSP status, which allows preferential treatment to certain number of specified goods from beneficiary countries.
  2. Earlier signals from the USTR suggested there could be a resolution by India, rationalizing the trade margin over medical devices, and for India by reducing the steel and aluminum tariffs.
  3. But the draft agreement prepared by the USTR sought concessions from India on Compulsory Registration Order that governs standards in telecom equipment, American exports of boric acid, pork, poultry and dairy.

Overt expectations by US

  1. American interlocutors took Indian officials by surprise last month with a draft agreement that committed additional imports by India, in civilian aircraft and natural gas.
  2. With talks in stalemate, the U.S is proceeding with its review of India’s GSP status and India is moving ahead with retaliatory tariffs.
  3. Postponed twice, India’s retaliatory tariffs are now set to come into force on September 18.
  4. Meanwhile, there is a shadow of uncertainty over the Trade Policy Forum (TPF) that was announced for the last week of October.
  5. India was expecting to negotiate general market access issues at the Trade Policy Forum (TPF), but the USTR wanted all of them resolved at earliest.

Fight for Market Access

  1. The US must understand that there are different ways of addressing the trade deficit.
  2. With the US restarting oil and natural gas exports Indian imports in these sectors have been going up.
  3. In the first six months of this year, US exports to India have gone up by 28% compared to last year.
  4. The US should not be hasty. There has been a decrease in the deficit last year by about 5% or about $1.5 Bn because India imports gas and oil from the United States.
  5. According to ballpark figures, this calendar year we are likely to import up to US $2.5 billion in oil and gas. This must be acknowledged by the US.

Foreign Policy Watch: India-United States

[op-ed snap] Where interests meet

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: 2 + 2 dialogue

Mains level: India’s partnership with the US over years and recent developments related to it


Context

Balanced India-US relationship

  1. The idea that India-US relations are enveloped by a crisis has been a recurring theme for the last quarter of a century and more
  2. Yet, since the end of the Cold War, the bilateral relationship has made a steady advance across a broad front
  3. Despite the presumption or hope in many sections at home and abroad that something will surely trip up India and the US, their partnership has become stronger by the day

India’s growing ties with the US

  1. For India, ties with the US have emerged as the most comprehensive among all its major power relationships
  2. In terms of breadth, it ranges from defence and high technology cooperation to a substantive people-to-people relationship
  3. In terms of weight, it is the most important economic relationship — annual two-way trade in goods and services now stands at nearly $140 billion and mutual investments are on the way up
  4. There is also a growing convergence of perspectives on regional and international affairs
  5. Few other powers have been as positive as the US in addressing either India’s concerns about terrorism in the region or as supportive of its aspirations for a larger international role

Are Trump’s policies harmful to India?

  1. Although many of America’s traditional partners have found themselves at the receiving end of Trump’s effort to reorient US foreign policy, the consequences for India have not been too severe to cope with
  2. On the two primary areas of concern for India — Pakistan and China — Delhi has no reason to complain about Trump’s policies
  3. On the sources of terror in Pakistan and its destabilisation of Afghanistan, Trump has mounted the kind of pressure on Rawalpindi that his predecessors were not willing to consider
  4. Trump’s pushback against China’s assertive policies has already opened up new diplomatic space for Delhi in the Indo-Pacific, including with Beijing

Dealing with US sanctions on trading with Russia

  1. Since the end of the Cold War, India did not have to look over its shoulder in its engagement with either Russia or America
  2. Delhi will now have to deal with this new situation
  3. The new US law that mandates sanctions against countries that buy arms from Russia is at the centre of the current debate
  4. Washington has no reason to wreck the growing military relationship with India — which has seen the US expand its share in arms sales to India at the expense of Russia
  5. India, on its part, needs to take full advantage of the strategic possibilities with the US for modernising India’s military as well as its defence industrial base

Managing Iran problem

  1. The Iran problem might be a lot easier to manage
  2. It’s been done before amidst the continuing confrontation between Tehran and Washington
  3. More than a decade ago, the UPA government refused to sacrifice India’s rising stakes in the US relationship for the sake of Iran
  4. Also, India’s interests are rapidly rising in the UAE and Saudi Arabia — two countries that are in a deepening conflict with Iran

Limiting incoming damage

  1. Driven by powerful domestic political considerations, Trump has chosen to confront all of America’s major economic partners on ending the trade imbalance
  2. India is certainly on the list of countries with a trade surplus with the US
  3. Delhi must find ways to limit the damage to its most important trade relationship through practical negotiations

Way Forward

  1. India and the United States have advanced their partnership over the last few years by sticking to two important principles
  2. One is the political commitment not to let any one problem derail the broader partnership and the other is to continue to expand the areas of engagement that yield additional gains for both
  3. The two sides must try and break from the frustrating tradition of incrementalism via 2 + 2 dialogue which could also help set more ambitious goals for the future
  4. Translating the alignment of interests into concrete outcomes requires the development of a new framework for burden-sharing and strategic coordination

Foreign Policy Watch: India-United States

[op-ed snap] India and the U.S. — it’s complicated

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: 2+2 talks

Mains level: India-US partnership in recent years


Context

2 + 2 dialogue

  1. The first round of the India-U.S. 2+2 talks at the level of External Affairs Minister and Defence Minister of India and their counterparts Secretary of State and Defence Secretary of the US is scheduled for September 6 in Delhi
  2. It appears perfectly logical when seen against the two-decade-old trend line of India-U.S. relations
  3. The trend line has not been smooth but the trajectory definitively reflects a growing strategic engagement

Strategic convergence between India & the US

  1. The end of the Cold War provided an opportunity to both countries to review their relationship in the light of changing global and regional realities
  2. With the opening of the Indian economy, the American private sector began to look at India with greater interest
  3. Another factor is the political coming of age of the three-million-strong Indian diaspora

Defense dialogues & cooperation

  1. The defence dialogue began in 1995 with the setting up of the Defence Policy Group at the level of the Defence Secretary and his Pentagon counterpart and three Steering Groups to develop exchanges between the Services
  2. The strategic dialogue covering nuclear issues shifted gears following the nuclear tests of 1998 and imposition of sanctions by the U.S.
  3. A decade later, this was formalised and enlarged into the India-U.S. Defence Framework Agreement which was renewed for 10 years in 2015
  4. Today, the U.S. is the country with which India undertakes the largest number of military exercises which have gradually evolved in scale and complexity
  5. In 2016, India was designated as a ‘Major Defence Partner’ country
  6. Another step forward in the middle of this year was the inclusion of India in the Strategic Trade Authorisation-1 (STA-1) category, putting it on a par with allies in terms of technology access

Foundational agreements remain a challenge

  1. Acquiring U.S. high technology comes with its own set of obligations in terms of ensuring its security
  2. These take the form of various undertakings often described as foundational agreements
  3. The first of these was GSOMIA (General Security of Military Information Agreement) which India signed in 2002
  4. The other three related to logistics support, communications compatibility and security, and exchanges of geospatial information
  5. Now the India-specific Communications Compatibility and Security Agreement (COMCASA) is likely to be signed
  6. It makes it possible to install high-end secure communication equipment on U.S. platforms that we have been acquiring

Further challenges

  • The first is the Countering America’s Adversaries Through Sanctions Act (CAATSA) enacted last year which enables the U.S. government to sanction countries that engage in ‘significant transactions’ with Russian military and intelligence entities
  1. The proposed purchase of the S-400 missile defence system would attract CAATSA sanctions
  2. A waiver provision has now been introduced to cover India, Indonesia and VietnamIt requires certification by the U.S. that the country concerned is gradually reducing its dependency on Russian equipment and cooperating with the U.S. on critical security issues
  3. Indian concerns on this need to be addressed
  • The second relates to U.S. sanctions on Iran after its unilateral withdrawal from the nuclear deal
  1. Iranian crude imports have grown significantly in recent years and India also stepped up its involvement in developing Chabahar port
  2. The port provides connectivity to Afghanistan and Central Asia
  3. The Iran Freedom and Counter-Proliferation Act (2012) contains a waiver provision in case of activities for reconstruction assistance and economic development for Afghanistan, which is a U.S. priority too

Way Forward

  1. Creative thinking will be needed in the 2+2 dialogue to overcome these challenges
  2. In order to realise the Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region (2015), both countries will have to nurture the habit of talking and working together to diminish some of the prickliness in the partnership

Foreign Policy Watch: India-United States

2+2 talks to focus on China

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: 2+2 Dialogue

Mains level:  India-US defence relations and its impact on India’s traditional partners.


News

First 2+2 Dialogue

  1. The first U.S.-India 2+2 dialogues next week in New Delhi will discuss regional and strategic issues of Asia.
  2. S. Secretary of State Mike Pompeo and Secretary of Defense James Mattis will be travelling to India for the dialogue, which has been postponed twice.

Ties with Russia at stake

  1. US is mindful of India’s legacy ties with Russia, but does not appreciate its continuing defence cooperation with it.
  2. It is not sure of granting a waiver to India from sanctions if it went ahead with the planned purchase of S-400 missile defence system from Russia.
  3. However the dialogue is meant to enhance defence requirements and alternatives for India

Focussed at countering China

  1. S. administration is expecting concrete outcomes such as concluding an enabling agreement on communication and expanding the scope of military exercises.
  2. It aims at operationalising India-U.S. partnership in Asia under the agenda.
  3. S. reiterated that its Asia Pacific policy is an inclusive strategy.
  4. Considering the OBOR and militarisation of the South China Sea, US emphasizes to have an alternative for economic and strategic partnership with agenda under the agenda.

Foreign Policy Watch: India-United States

[op-ed snap] Easing tensions: on U.S.-Mexico trade deal

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: NAFTA

Mains level: U.S. dominant approach in the world economy and how to deal with it


Context

US-Mexico NAFTA deal

  1. The United States and Mexico have reached a breakthrough bilateral trade agreement replacing the decades-old North American Free Trade Agreement (NAFTA)
  2. This is after Mexico agreed to concessions demanded by the Donald Trump administration
  3. The U.S.-Mexico bilateral trade deal comes in the aftermath of President Trump’s statement in June that he might enter into separate trade agreements with Canada and Mexico, thus effectively junking the tripartite NAFTA deal
  4. U.S. has also invited Canada to join talks for a renegotiation of trade terms in favour of U.S. interests

What’s in the new deal?

  1. According to the new agreement, 75% of all automobile content must be made regionally, which is higher than the current level of 62.5%
  2. Further, 40-45% of such content must be manufactured using labour that costs at least $16 an hour
  3. The U.S. hopes that this will discourage manufacturers from moving their facilities to Mexico, where labour is available at rates lower than in the U.S.

Lessons from this deal

  1. Mexico’s decision could set an example for other countries which have resorted to retaliatory tariffs to deal with Mr. Trump’s aggressive trade war against them
  2. There can be no doubt that Mr. Trump’s protectionist trade policy, including the current deal which increases restrictions on cross-border trade in order to protect U.S. jobs, is bad for the global economy
  3. However, the best way to win the trade war against the U.S. may simply be to accept “defeat” by refusing to double down on retaliatory tariffs

Why accept defeat?

  1. Retaliatory tariffs can only cause further harm to the world economy by increasing the burden of taxes on the private sector, which is crucial to spur growth and create jobs
  2. Further, there is no reason for America’s trading partners, in an attempt to protect their domestic producers, to repeat Mr Trump’s mistake of depriving domestic consumers of access to useful foreign goods

Way Forward

  1. The right response to Mr Trump’s trade war will be to abstain from any mutually destructive tit-for-tat tariff regimes while simultaneously pushing for peace talks

Back2Basics

North American Free Trade Agreement (NAFTA)

  1. The North American Free Trade Agreement is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America
  2. The agreement came into force on January 1, 1994
  3. The goal of NAFTA was to eliminate barriers to trade and investment between the U.S., Canada and Mexico
  4. NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC)
  5. NAFTA established the CANAMEX Corridor for road transport between Canada and Mexico, also proposed for use by rail, pipeline, and fibre optic telecommunications infrastructure
  6. A study in 2007 found that NAFTA had “a substantial impact on international trade volumes, but a modest effect on prices and welfare”
  7. If the original Trans-Pacific Partnership (TPP) had come into effect, existing agreements such as NAFTA would be reduced to those provisions that do not conflict with the TPP, or that require greater trade liberalization than the TPP

Foreign Policy Watch: India-United States

India gets STA-1 status from U.S.

Image Source

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: STA-1

Mains level:  India-US defence relations.


News

A strategic push for India

  1. US government granted India the status of STA-1 a trading partner equivalent to its closest allies in the NATO. This decision is likely to boost India’s defence trade with the U.S.
  2. The US decision to move India into Tier-1 of the Department of Commerce’s Strategic Trade Authorisation (STA) license is a logical culmination to India’s designation as a Major Defence Partner of the US
  3. It is a reaffirmation of India’s impeccable record as a responsible member of the concerned multilateral export control regimes.
  4. As a result of this move, India will require less number of licences for acquiring U.S. defence exports.
  5. Apart from India, other Asian countries in the STA-1 list are Japan and South Korea.

Way Forward

  1. The move is a sign of trust not only in the relationship but also on India’s capabilities as an economic and a security partner.
  2. This is because it also presupposes that India has the multilateral export control regime in place, which would allow the transfer of more sensitive defense technologies and dual use technologies to India and without the risk of any proliferation.
  3. Currently, 36 countries, mostly all NATO nations, have this status, so it’s a very elevated status from an export control point of view.

Foreign Policy Watch: India-United States

India, US set to sign pact for secure military communications

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: COMCASA, LEMOA, BECA

Mains level: Military partnership of India with other countries


COMCASA to be signed

  1. India and the US are likely to sign the Communications Compatibility and Security Agreement (COMCASA)
  2. It would be a bilateral pact between the two countries for secure military communications

Modified CISMOA

  1. The general agreement signed by the US with other countries is called the Communication and Information on Security Memorandum of Agreement (CISMOA) but the name was changed to COMCASA to reflect its India-specific nature
  2. COMCASA is meant to provide a legal framework for transfer of communication security equipment from the US to India that would facilitate “interoperability” between their forces — and potentially with other militaries that use US-origin systems for secured data links

3 foundational agreements

  1. COMCASA is part of a set of three military agreements that the US considers “foundational” for a functional military relationship
  2. In August 2016, India had signed the Logistics Exchange Memorandum of Agreement (LEMOA), which allows the military of each country to replenish from the other’s bases
  3. Negotiations on the third agreement, Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA), have not yet begun

Foreign Policy Watch: India-United States

[op-ed snap] Raja Mandala: India and Trump’s world

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: European Union, North Atlantic Treaty Organisation, G-7

Mains level: Trump’s new international relations stance & its impact on India


Context

America’s changed international relations policy

  1. A day before he met Russian President Vladimir Putin in Helsinki, Trump put the European Union — whose members are some of America’s oldest allies and friends — at the top of the list of America’s foes
  2. His outburst against the EU might be shocking, but it is part of an emerging pattern
  3. Trump quarrelled with America’s leading economic partners in the G-7 summit last month on issues relating to trade
  4. At the summit of the world’s most powerful military alliance — the North Atlantic Treaty Organisation, Trump accused Germany of being “totally controlled by Russia”
  5. Trump warned the NATO allies that if they did not contribute more to the collective defence burden, America would go its own way

Trump’s list of political demolitions in Europe

  1. One is the so-called special relationship between America and Britain. For nearly a century, the Anglo-American partnership has been the strongest bilateral relationship in the world
  2. Two, he is threatening to dismantle NATO, the world’s most powerful military alliance
  3. Three, despite the huge resistance at home and in Europe, Trump seems determined to enhance the engagement with Putin’s Russia
  4. Fourth, he is sustaining the pressure on EU and China to change the terms of economic engagement with the United States

Impact of trump on India’s diplomacy

  1. Trump is compelling India to rethink its longstanding foreign policy assumptions
  2. The consensus on economic globalisation and a relative harmony among the major powers — which defined the post Cold War era — is now breaking down
  3. The tensions between the US and Russia and Moscow’s deepening embrace of Beijing have certainly created problems for India

What’s in store for India?

  1. As a late convert to economic globalisation, India will have much to lose, if the current trading order breaks down
  2. Claiming that it is “WTO compliant” is a poor strategy when the big boys are changing the trading rules

What does India need to do?

  1. Delhi needs a flexible negotiating strategy founded in a more ambitious internal reform agenda
  2. Equally important is the need for India to come to terms with Trump’s deconstruction of the “West”
  3. It is rarely that a dominant power seeks to overthrow the status quo
  4. Trump is doing precisely that in questioning the utility of the collective Western institutions built after the Second World War and demanding a re-arrangement of burdens and benefits between the US and its partners
  5. Delhi must avoid conflict with the powers with which it has serious disputes
  6. It also needs to lift self-imposed limits on security cooperation with the powers that are ready to boost India’s material power

Way Forward

  1. Through the 20th century, India’s foreign policy has been shaped by the impulse to stand up against the West — initially against colonialism and later against Western security alliances
  2. In the 21st century, India’s efforts to construct closer relations with the US, have been slowed by the presumed political centrality of retaining “strategic autonomy” from the West
  3.  In these troubled times, transactional diplomacy, and not political posturing, holds the key to achieving India’s ambitious national goals

Foreign Policy Watch: India-United States

[op-ed snap] The bilateral limits of hype: on India-U.S. relations

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: India-US relations in recent past and way forward


Context

Transactional nature of American foreign policy

  1. The postponement of the India-U.S. 2+2 dialogue between the Foreign and Defence Ministers of both countries, that had been scheduled for July 6 has to be seen with the personality of Mr. Trump
  2. Mr. Trump has set his eyes on spectacles that suit him
  3. His every move on the global stage enrages his domestic political opponents and the professional strategic community alike and he is happy, as this keeps his political base constantly on the boil
  4. North Korea, Syria, Afghanistan, trade deficit, and all global challenges before America are the faults of his predecessors, he repeatedly tells supporters

Impact of this policy on ties

  1. China today threatens the dominance of the U.S., but America’s security establishment and political elite are obsessed with Russia
  2. India gets caught in that internal American fight too
  3. An American law now requires the President to impose sanctions on any country that has significant security relations with Russia
  4. India and China are in the same basket for Mr. Trump on many issues that agitate him
  5. His administration considers India and China as violators of intellectual property laws, as countries that put barriers to trade and subsidise exports and use state power to control markets
  6. Amongst all adversaries, the Pentagon and the U.S. arms industry work in India’s favor

Way forward

  1. India-U.S. relations will be better off without hype and grand theories, often encouraged by the government
  2. The U.S. has overlapping interests with China, and India has overlapping interests with both
  3. Avoiding the hyperbole could help manage India’s troubles with Pakistan and China better

Foreign Policy Watch: India-United States

[op-ed snap] Managing the turbulence in India-US relations

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: CAATSA, 2+2 dialogue

Mains level: Secondary sanctions policy of the US and its possible impacts on India


Context

Hard times for India-US relationship

  1. The US has asked all countries, including India, to reduce oil imports from Iran to zero by 4 November
  2. If India fails to do this, its companies will face the same sanctions as any other violator of this American diktat
  3. This comes against the backdrop of more potential friction building up between the two countries
  4. India is in the process of purchasing S400 surface-to-air missile systems from Russia which could mean more sanctions for New Delhi, as per a US law called “Countering America’s Adversaries Through Sanctions Act” (CAATSA)
  5. In addition to these issues, US President Donald Trump has been quite vocal about the tariffs imposed by India on American goods
  6. Also, the proposed 2+2 dialogue has been canceled unilaterally by the US

What can India do in these turbulent times?

  1. India needs to make a clear distinction between the sanctions that it will face on account of importing oil from Iran and those that will result from India’s defense partnership with Russia
  • There are many private companies involved in the process of importing oil from Iran, primarily in the shipping, insurance and refinery sectors which by the fear of being cut off from the US will most likely pull out of Iran
  • By hurting India’s defense acquisitions from Russia, the US is putting itself in the line of fire as India is the world’s largest arms importer and the US has made rapid strides in this market in the past decade. Future deals with the US could be affected by this move
  • American objectives are far clearer in the case of Iran where Mr. Trump wants to significantly degrade Iranian capabilities to acquire nuclear weapons and to interfere in other countries in the region

What is the US policy?

  1. American sanctions are always more effective in countries which are economically integrated with America than those which are not
  2. The US uses its economic and military links as leverage in its non-proliferation goals
  3. The US seeks the support of other countries to build a tighter multilateral sanctions regime
  4. When this support doesn’t come voluntarily, the US uses secondary sanctions to extract coerced support from other countries
  5. Being cut off from the American market and financial system is too high a cost to pay for defending a country like Iran

Way forward

  1. India’s acquisition of Russian-made S400 missile systems can be managed at the level of the government and public sector, with little role for private companies
  2. This suggests that India should stay firm on the S400 deal
  3. On Iran, New Delhi may not be left with many options
  4. The Indian response will have to be in light of the American threat of secondary sanctions for importing Iranian oil

Foreign Policy Watch: India-United States

US Senate passes defence bill without CAATSA waiver

Image result for us senate house of representatives difference

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: CAATSA, NDAA

Mains level: Impact of US domestic policies on India


National Defence Authorisation Act (NDAA) for 2019

  1. The U.S Senate has ignored the Donald Trump administration’s request for powers to waiver provisions of the Countering America’s Adversaries Through Sanctions Act (CAATSA)
  2. The act requires it to impose sanctions on countries that have “significant” defense relations with Russia
  3. The Senate version of the National Defence Authorisation Act (NDAA) for 2019 has no waiver provisions
  4. The version of the NDAA 2019 passed earlier by the House of Representatives has a provision for waiver in rules attached to it

Impact on India

  1. India is caught in the crossfire of the bipartisan law against Russia
  2. The House version allows for waivers for 180 days, provided the administration certifies that the country in question is scaling back its ties with Russia
  3. This formulation is inadequate to resolve the Indian situation, as it links waiver to India rolling back ties with Russia

Foreign Policy Watch: India-United States

Trilateral war games to kick off next week

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Malabar trilateral exercise

Mains level: Role of India in containing China’s rising hegemony across Pacific and Indian ocean


Malabar trilateral naval war games

  1. India, Japan, and the U.S. will hold the annual Malabar trilateral naval war games off the coast of Guam in the Philippine Sea from June 6-15
  2. The exercise comes at a time of increased friction between China and the U.S. along with the nations bordering the South China Sea

Increased focus on India

  1. The U.S. has just renamed its Pacific command as Indo-Pacific command
  2. This is to underscore its commitment to the region in line with its Indo-Pacific strategy

Foreign Policy Watch: India-United States

U.S. adds India to currency watch list with China

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Currency monitoring list

Mains level: Trade war between various nations and its impact on India


Currency monitoring list

  1. The U.S. Treasury added India to its watch list of countries with potentially questionable foreign exchange policies, joining China and four others (Germany, Japan, Korea and Switzerland)
  2. The “monitoring list” includes those major trading partners of the US that merit close attention to their currency practices

Why this list?

  1. The Treasury report is required by Congress to identify countries that are trying to artificially manage the value of their currency to gain a trade advantage, for example by keeping the exchange rate low to promote cheaper exports
  2. Countries remain on the list for two report cycles to help ensure that any improvement in performance versus the criteria is durable and is not due to temporary factors

Impact on India

  1. Treasury called for all the countries on the list to implement economic reforms to address their surpluses
  2. India would have to undertake reforms to address large trade imbalance with USA

Foreign Policy Watch: India-United States

[op-ed snap] Reappraising India-US: Defence cooperation

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: FMS scheme, foundational agreements, “2+2” dialogues, etc.

Mains level: The positive outcomes of the long standing Indo-US relationship and future expectations of India from the US.


News

Concern for India

  1. For India it is the emerging Moscow-Beijing axis and Russia’s courtship of Pakistan that should ring alarm bells
  2. Given that nations have neither permanent friends nor permanent enemies, only permanent interests, it is perhaps time for us to consider an agonising policy reappraisal

The US was acted at the right time

  1. After the cold war, the US, with an excellent sense of timing, reached out with proposals for military-to-military cooperation in 1991
  2. The Indian Navy, keen to shed its isolation, initiated the first Indo-US naval exercises to be named “Malabar” in May 1992
  3. The professional respect and bonhomie generated by a quarter century of naval engagement has acted as a catalyst in Indo-US relations

Other positive outcomes of the Indo-US relationship

  1. The unprecedented US-India Civil Nuclear Agreement, which followed in 2008, accorded India the “de facto” status of a nuclear weapon state without signing the Non Proliferation Treaty
  2. In 2016, India was accorded the status of Major Defence Partner by the US Congress
  3. The 2004 Agreement on Next Steps in Strategic Partnership was followed by a Defence Framework Agreement in 2005 and the 2012 Defence Technology and Trade Initiative (DTTI), envisaging the transfer of advanced technologies to India
  4. The DTTI has, however, made little actual progress because of divergent objectives
  5. While India seeks technology, the US remains focused on trade

The issue of “foundational agreement”

  1. A major impediment in the Indo-US defence relationship has been India’s reluctance to sign the “foundational agreements” required by the US to enhance defence ties
  2. A delay in signing these will deprive India of high-tech equipment that should accompany US hardware, and prevent the sharing of useful geospatial information between the two militaries

The Chinese way of containing India

  1. China, with five times India’s GDP, is surging ahead to attain economic, military and technological parity with the US
  2. Aiming to be Asia’s sole hegemon, China has armed Pakistan and enlisted it as a surrogate, thereby containing India within a South Asian “box”

Issue of defence industrial base

  1. India’s military, in terms of size, capability and professionalism, is no doubt third or fourth in the world pecking order
  2. However, one would hesitate to call it as the “world’s greatest” because it lacks a military-industrial support base and is abjectly dependent on imported weaponry

Recent step taken by India and the US: “2+2” dialogue

  1. In order to elevate the Indo-US relationship to a strategic level and resolve many outstanding bilateral issues, Trump and Modi had agreed to establish a “2+2” dialogue between the respective defence and foreign ministers
  2. As and when the “2+2” dialogue does take place, the Indian side would do well to remind their US interlocutors that in the past three decades the USSR and Russia have, amongst other items, leased two nuclear submarines, sold an aircraft-carrier, and transferred technology for a supersonic cruise missile to India
  3. So, if the US is to deliver on tall promises, some serious re-thinking may be required on Capitol Hill

Foreign Policy Watch: India-United States

US announces GSP eligibility review of India

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Generalized System of Preferences, market access

Mains level: Trade war between various nations and its impact on global economy


Addressing market access concerns of India

  1. The US has announced eligibility review of India for the Generalized System of Preferences (GSP)
  2. This decision is based on the market access concerns the US has with India

Generalized System of Preferences (GSP)

  1. The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries
  2. Introduced in 1976, a wide range of industrial and agricultural products originating from certain developing countries are given preferential access to American markets
  3. Congress last month had voted to renew the GSP through 2020

Why such review?

  1. The petitions filed by the US dairy industry and the US medical device industry requested a review of India’s GSP benefits
  2. They wanted an investigation of Indian trade barriers affecting the US exports in those sectors
  3. According to them, India has implemented a wide array of trade barriers that create serious negative effects on US commerce

Impact on India

  1. India was the biggest beneficiary of GSP in 2017
  2. GSP enables duty-free entry of 3,500 product lines, which benefits exporters of textiles, engineering, gems and jeweler and chemical products from India
  3. Any adverse decision could hurt India’s exports to the US

Foreign Policy Watch: India-United States

India-US: ‘2-by-2’ dialogue put off, India says no to defence minister talks

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: ‘2-by-2’ dialogue, COMCASA, BECA, LEMOA

Mains level: India-US ties in recent times and various issues surrounding them


Inaugural ‘2-by-2’ dialogue put off

  1. The ‘2-by-2’ dialogue between India’s foreign and defense ministers and US secretaries of state and defense has been called off
  2. The inaugural ‘2-by-2’ dialogue was scheduled to be held in Washington this month

Why this change?

  1. The dialogue was postponed as the US Secretary of State-designate, Mike Pompeo is still awaiting his confirmation by the US Senate
  2. The offer of a formal meeting between defense ministers was made by the US to India but India declined this offer

Pressure to sign the two foundational agreements for defense 

  1. The US side has been pressing the Indian side to sign the two foundational agreements for defense cooperation
  2. These are Communications Compatibility and Security Agreement (COMCASA), earlier known as the Communications and Information Security Memorandum of Agreement (CISMOA); and Basic Exchange and Cooperation Agreement (BECA)
  3. In 2016, India and the US had signed the third foundational agreement: Logistical Exchange Memorandum of Agreement (LEMOA), which has since been operationalized

Back2Basics

Communications Compatibility and Security Agreement (COMCASA) & Basic Exchange and Cooperation Agreement (BECA)

  1. COMCASA is needed if any classified military information is required to be exchanged between US and Indian armed forces
  2. It would allow India to fully utilize the communication security equipment on military platforms it imports from the US
  3. BECA provides for sharing and data gathering of geospatial information between the two militaries

Foreign Policy Watch: India-United States

[op-ed snap] US and India must work on economic ties

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: The United States-India Science Technology and Endowment Fund

Mains level: Different areas of bilateral cooperation that can significantly increase economic growth in both the countries.


News

India and the US are facing similar economic challenges

  1. Both countries need to rapidly create new jobs, move people into the middle class and keep them there,
  2. and take advantage of the opportunities that globalization can bring while mitigating its challenges to sustainable domestic growth and strong and equitable democratic societies
  3. Contending with these challenges will require effective domestic economic policies that address not just interest rates and investment, but also healthcare and education

The US-India economic relationship has a strong foundation

  1. Bilateral trade has more than doubled since 2006, reaching $115 billion in 2016
  2. The same year, there was $32.9 billion US foreign direct investment (FDI) in India, and in 2015 there was $12.1 billion Indian FDI in the US
  3. Through a coordinated strategy of investment and innovation, a smart US-India economic partnership can help each country improve the condition of its people

Three areas of bilateral cooperation in particular that can boost economic growth in both countries
FIRST: The two countries must invest in infrastructure

  1. According to finance ministry, India needs to invest $1.5 trillion over the next 10 years to meet its infrastructure needs,
  2. while the US department of transportation estimates that an additional $800 billion is needed in the US for bridges and roads alone
  3. To this end, the US department of treasury has been providing technical assistance to help the Pune municipal corporation issue municipal bonds
  4. By expanding this programme, more cities around India could fund their infrastructure needs
  5. Both countries should hold institutional investor summits to facilitate private sector investment in each other’s infrastructure
  6. This focus can boost long-term economic growth and job creation in both countries

SECOND: Need of innovative ways to contend  the changing landscape of employment

  1. As the nature of work changes, creating jobs requires innovation in addition to investment
  2. By holding a bilateral dialogue focused on the future of work, policymakers, entrepreneurs, technology experts, and community leaders can address employment trends
  3. and community needs to refine policy solutions that leverage the changing nature of work to create stable, well-paying jobs and empower citizens
    The United States-India Science Technology and Endowment Fund
  4. The two countries should also expand this fund
  5. It funds research on supporting healthy individuals or empowering citizens through technology conducted by US-Indian teams, with an emphasis on the marketability of the research outcomes
  6. This research can be the basis of building the digital infrastructure necessary to help people find jobs and skills training

THIRD: Importance of subnational(state-to-state) cooperation

  1. While the Indian ministry of external affairs already has an office focused on subnational issues, the US department of state should re-establish and strengthen the office it once had focused on subnational cooperation
  2. In addition, large states and cities should create their own offices of international affairs,
  3. and work with the foreign ministries to connect one another with technical training, capacity building, and best practices

Foreign Policy Watch: India-United States

US concerned over Russian sanctions’ implications on India

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: S-400 missile defense system, Countering America’s Adversaries Through Sanctions Act (CAATSA)

Mains level: Cold war 2.0 and its implications on India


Possible implications of Russian sanctions

  1. The Pentagon is concerned over the possible implications of Russian sanctions on defense ties between India and the US
  2. India could face sanctions for purchasing high-value military defense items, in particular, state-of-the-art S-400 missile defense system, from Russia under the Countering America’s Adversaries Through Sanctions Act (CAATSA)

Countering America’s Adversaries Through Sanctions Act (CAATSA)

  1. Section 231 of CAATSA mandates secondary sanctions on those who conduct significant transactions with the Russian defense and intelligence sectors
  2. CAATSA was signed into law in August 2017 and went into effect in January this year
  3. The law mandates the Trump administration to punish entities engaging in a significant transaction with the defense or intelligence sectors of Russia

Why should India be worried about it?

  1. While the US has become its second largest defense supplier, mainly of aircraft and artillery, India still relies heavily on Russian equipment, such as submarines and missiles, that the US has been unwilling to provide
  2. Seventy percent of Indian military hardware is Russian in origin
  3. India is currently in advance stage of negotiations with Russia for five S-400 system worth an estimated USD 4.5 billion. The air defense system includes radar, missile launchers and command center technology

Foreign Policy Watch: India-United States

India-Japan-US trilateral in New Delhi ahead of Trump-Abe summit

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: India-US forum, the trilateral dialogue.

Mains level: The trilateral dialogue


News

 Trilateral dialogue between India, Japan and the US

  1. India will host the strategically important trilateral dialogue between India, Japan and the US this week
  2. The US administration has sent two of its senior diplomats from the State Department  to co-lead the American delegation for the trilateral dialogue

Background of the trilateral dialogue

  1. The India-Japan-US trilateral was launched in December 2011 when Hillary Clinton was the Secretary of State
  2. It was elevated to ministerial level in 2015. The inaugural ministerial trilateral was held on September 29, 2015, in New York on the sidelines of the UN General Assembly Session
  3. The last ministerial dialogue was also held in New York in September 2017

India-US forum

  1. One of the diplomats will also participate in the India-US Forum, hosted by the Ananta Centre and the Ministry of External Affairs
  2. The India-US Forum is a platform for both American and Indian leaders across the spectrum to discuss complex global and bilateral issues and promote greater cooperation between the two countries through consultation and collaboration
  3. Conveners : Ananta Centre and Ministry of External Affairs

Foreign Policy Watch: India-United States

U.S., India hold naval training

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: INS Tarkash, Talwar Class Frigate, etc.

Mains level: Defence relationship between India and the US.


News

Exercise with the US Navy

  1. Indian Navy’s Talwar class frigate INS Tarkash has carried out a “greeting and training” exercise with the U.S. Navy’s Theodore Roosevelt Carrier Strike Group (TRCSG)
  2. The TRCSG was until now involved in operations against the Islamic State in the Arabian Gulf
  3. INS Tarkash sailed in formation with aircraft carrier USS Theodore Roosevelt , guided-missile destroyer USS Preble (DDG 88) and other ships

Other particulars of the exercise

  1. Ten Indian sailors toured spaces aboard Preble such as a combat information centre, a central control station and the bridge, while 10 Preble sailors visited Tarkash
    (during the exercise)

Back2basics

INS Tarkash

  1. NS Tarkash (F50) is the fifth Talwar-class frigate constructed for the Indian Navy. She is part of the second batch of Talwar-class frigates ordered by the Indian Navy
  2. She was built at the Yantar shipyard in Kaliningrad, Russia
  3. She was commissioned to Navy service on 9 November 2012 at Kaliningrad and joined the Western Naval Command on 27 December 2012

Talwar-class frigate 

  1. The Talwar-class frigates or Project 11356 are a class of guided missile frigates designed and built by Russia for the Indian Navy
  2. The Talwar-class guided missile frigates are the improved versions of the Krivak III-class (Project 1135) frigates used by the Russian Coast Guard
  3. The design has been further developed as the Admiral Grigorovich-class frigate for the Russian Navy
  4. Six ships were built in two batches between 1999 and 2013

Foreign Policy Watch: India-United States

India, US two-plus-two dialogue postponed: US official

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Two-plus-two meeting

Mains level: Strenthening of India-US relationship in recent years


Meeting to be rescheduled

  1. The India-US two-plus-two meeting has been postponed as of now
  2. This is due to uncertainty over the confirmation of the nomination of Mike Pompeo, as the new Secretary of State

About the meeting

  1. The first two-plus-two meeting between India and the US was tentatively scheduled for April 18-19
  2. The two-plus-two dialogue was seen as a vehicle to elevate the strategic relationship between the two countries

Impact on India-US bilateral ties

  1. This would have no impact on the bilateral relationship
  2. In the meetings, this week, the foreign and defense secretaries decided to continue with their agenda

Foreign Policy Watch: India-United States

[op-ed snap] A pivot in Asia

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The two document shows the rapidly changing relationship between India and the US.(on strategic front)


Two important documents released by the USA

  1. The National Defence Strategy (NDS) and the National Security Strategy (NSS) released recently by the U.S. showcase the country’s strategic priorities and the way forward

Importance from India’s point of view

  1. The two documents lay considerable focus on the ‘Indo-Pacific’ and they will serve as crucial policy indicators for India and the region

Shifting of focus

  1. The previous Obama administration too laid considerable focus on Asia-Pacific under its ‘Rebalance to Asia’ strategy
  2. But now the U.S. administration has shifted its focus from the Asia-Pacific to Indo-Pacific as a reference point of its maritime strategy

National Defence Strategy (NDS)

  1. The NDS is reflective of the changing geopolitical realities in Asia viz.
    (1)  China’s territorial and maritime overtures in the Indian Ocean
    (2) regional instability due to North Korea’s nuclear and missile tests, and
    (3) the salience of Asian economies in international trade and commerce has brought the region into prominence

Why are these documents crucial for India?

  1. With India as America’s ‘major defence partner’, the NDS seeks to further expand defence cooperation between the two countries with particular emphasis on military purchases
  2. With its withdrawal from the Trans-Pacific Partnership, the U.S. is looking for multilateral economic engagement with Asian economies
  3. On the strategic front, apart from building missile defence systems with Japan and South Korea to checkmate North Korea, U.S. has shown keenness to align with the ‘Quad’ to counter China’s rise

Foreign Policy Watch: India-United States

Indo-US joint military exercise ‘Vajra Prahar’ to be held in Seattle

Image source

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Vajra Prahar exercise

Mains level: Indo-US defence cooperation


Increasing military cooperation between India and the US

  1. Another edition of the joint military exercise ‘Vajra Prahar’ will be held at Joint Base Lewis-McChord (JBLM) in Seattle
  2. The exercise will mainly focus on special operations in urban areas

About the exercise

  1. ‘Vajra Prahar’ is an Indo-US Special Forces joint training exercise conducted alternately in India and the US
  2. Though the exercise began in 2010, there was a gap of three years between 2012 and 2015
  3. The last edition was held in Jodhpur in March 2017

Aim of the exercise

  1. The aim of the exercise is to promote military relations between the two countries by enhancing interoperability and mutual exchange of tactics between Special Forces
  2. The objectives of the joint training is to share the best practices between the two armies and to develop joint strategies by sharing expertise of conducting operations in a counter-insurgency and counter-terrorism environment

Foreign Policy Watch: India-United States

US sends clear signal to India: At some point, let us post officers at each other’s combatant commands

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Logistics Exchange Memorandum of Agreement (LEMOA), Free Trade Agreement, MTCR, Wassenaar Arrangement, Australia group, NSG

Mains level: Growing partnership between India and USA


Strategic ties between the United States and India set to rise

  1. US ambassador has proposed “reciprocal military liaison officers at each other’s combatant commands” at “some point” in defence relations between the two countries
  2. This suggestion comes two years after India and the US signed the Logistics Exchange Memorandum of Agreement (LEMOA) which allows their militaries to work closely and use each other’s bases for repair and replenishment of supplies

Current US military liaison arrangements

  1. At present, the US has arrangements to have military liaison officers with some of its NATO allies and close defence partners including Australia, Canada, Japan, Republic of Korea, Philippines, New Zealand, Great Britain
  2. Posting liaison officers will mean formalising the robust partnerships between theatre commands, viz Pacific command of the US defence forces

Free Trade Agreement between India and USA

  1. US envoy also proposed a Free Trade Agreement with India in the future
  2. There have been no negotiations between India and the US on FTA so far
  3. The economic partnership should be looked through the strategic lens — as the US looks for alternatives to China in the region

On India joining multilateral export control regimes

  1. India recently joined the Missile Technology Control Regime (MTCR) and Wassenaar Arrangements
  2. The US expects India to join the Australia Group on chemical and biological weapons in near future
  3. The USA is working closely with India and our international partners to secure India’s membership in the Nuclear Suppliers Group

Foreign Policy Watch: India-United States

US exporting dirty fuel to already pollution choked India

Note4students

Mains Paper 3 : Conservation, environmental pollution and degradation
Prelims level: Petcoke
Mains level: Environmental Dumping example; Sources of Pollution; Balancing Environmental Conservation and Developmental Needs

  1. US oil refineries that are unable to sell a dirty fuel waste product at home are exporting vast quantities of it to India instead.
  2. The US is the biggest producer and exporter of petcoke in the world.
  3. India, last year got almost a fourth of the fuel grade “petcoke” the US ships.
  4. Last year, 65 percent of India’s petcoke came from the US
Petroleum Coke (Petcoke)
  1. Petroleum coke, the leftover from refining Canadian tar sands and other heavy crude, is cheaper and burns hotter than coal.
  2. It also contains more planet-warming carbon and far more heart- and lung-damaging sulfur – a key reason few American companies use it.
Rationale for use
  1. Industry officials say petcoke has been an important fuel for decades, and its use recycles a waste product.
Effect
  1. The petcoke burned in countless factories and plants is contributing to dangerously filthy air in India.
  2. Environmental Pollution Control Authority: imported petcoke used near the capital has 17 times more sulfur than the limit for coal
  3. India’s own petcoke, produced domestically, adds to the pollution.
  4. Health and environmental advocates say the US is exporting an environmental problem.
  5. It’s impossible to gauge how much pollution is from petcoke versus other sources. But experts say it is contributing to the problem.
Measures Taken
  1. The Supreme Court banned petcoke use by some industries in states surrounding the capital and demanded pollution standards that could further limit use nationwide.

Foreign Policy Watch: India-United States

Indian firms created 1.13 lakh jobs in U.S., says CII

Image Source

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Particulars of the CII

Mains level: The study shows India’s contribution in America’s Economy


News

Study by the Confederation of Indian Industry (CII)

  1.  Study: “Indian Roots, American Soil”
  2. It has found that 100 Indian companies have created 1,13,423 jobs in the U.S with an investment of $17.9 billion, across all States
  3. It can be seen as an occasion to shore up political support for continuing economic engagement between the two countries in a political climate of protectionism

Significance of the study

  1. The fifth edition of the biennial study has political significance this year given the Donald Trump administration’s strong views on economic ties that displace American workers
  2. The Indian companies are spending significant amounts in America as part of their CSR initiatives is testimony to the fact they are deeply invested in this country and society
  3. The study found 87% of firms plan to hire more locally in the next five years

Back2basics

Confederation of Indian Industry(CII)

  1. The Confederation of Indian Industry (CII) is a premier business association in India which works to create an environment conducive to the growth of industry in the country.
  2. CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in India’s development process
  3. Founded in 1895, India’s premier business association has over 8,300 members, from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 200,000 enterprises from around 250 national and regional sectoral industry bodies
  4. CII works closely with the Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry through a range of specialized services and strategic global linkages

Foreign Policy Watch: India-United States

[op-ed snap] US policies toward India and Asia need strategic coherence

Danang : U.S. President Donald Trump speaks on the final day of the APEC CEO Summit on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Danang, Vietnam, Friday, Nov. 10, 2017. AP/PTI(AP11_10_2017_000071A)

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: How India’s interests can benefit the US, in the Asian region


News

Context

  1. The article talks about the US president’s Asian visit.
  2. And what should be done to counter the assertive Chinese behavior in the region

US President’s official trip to Asia

  1. With stops in Japan, South Korea, China, and now Vietnam, for the Asia-Pacific Economic Cooperation forum (APEC) summit
  2. In his address to the APEC CEO Summit, he outlined a vision of upholding a “free and open Indo-Pacific”

Is it possible to achieve the target of ‘free and open Indo-Pacific’ without India?

  1. The United States cannot achieve that goal without strong Asian partnerships—including with India
  2. Though India is not on the president’s Asia itinerary, the nomenclature alone—Indo-Pacific rather than Asia-Pacific—suggests that India stands rightly to play a central part in the Trump administration’s larger Asia strategy
  3. With long-standing allies like Japan, South Korea and Australia, India offers democratic and economic ballast to deal with the rise of China’s power

How can India counter a more assertive China in the region?

  1. The Indo-Pacific idea recognizes that a rising China has become more assertive as well as authoritarian, and it elevates Washington’s ties with India as an alternative model to all that Beijing represents
  2. By expanding Asia’s geographic net to include the world’s largest democracy, this larger region encompasses a greater balance favoring rule of law, freedom of navigation, open trade, and democracy

 What the US President can do to advance India’s interests(and its asian allies) in the region

  1.  The “Quad” grouping that adds Australia to the robust trilateral of India, Japan, and the United States appears on the verge of revival, a positive step
  2. In addition to strengthening ties to our traditional Asian allies, the president could start by clearly stating support for cooperative economic institutions like the APEC forum
  3. He should call explicitly for APEC to offer membership to India
  4. Asia’s third largest economy deserves to have a seat at the table, and it will help India to be more embedded in the premier regime focused on free and open trade in Asia
  5. To address the urgent need for infrastructure funding in the Asian region, the president should also support a capital base expansion for the World Bank

Trade issues between India and the US

  1. India recognize its famously difficult stances on trade and market access questions
  2. But a narrow focus on the $24 billion trade deficit with India (compared to more than $300 billion with China), should not distract from this larger goal
  3. India need to sort out market access problems and our difficulties with Indian intellectual property rights polices, but these questions are not strategic in nature

The way forward

  1. To meaningfully support a “free and open Indo-Pacific,” the Trump administration will have to be creative in building broad Asian partnerships, especially with its India policy
  2. We need all the allies we can muster
  3. A strong, stable, democratic India committed to a rules-based order will indeed be a “bookend” for the region. Washington will have to alter its economic focus to get there

Foreign Policy Watch: India-United States

[op-ed snap] Look beyond Af-Pak

Image source

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Malabar exercise, Act East policy, Indian Ocean Conference

Mains level: India US relations and way forward


Context

  1. The sentiment in the Donald Trump administration about US-India relations has been generally positive and upbeat
  2. President Trump in his South Asia policy speech came down heavily on Pakistan, warning that it has “much to gain” from partnering with the US in Afghanistan, but “much to lose by continuing to harbour criminals and terrorists”

The US wants India to play a significant role in the Indo-Pacific region

  1. This year’s Malabar exercise was most complex till date
  2. The largest vessels from American, Indian and Japanese navies demonstrated their power together in the Indian Ocean for the first time
  3. It set a clear example of the combined strength of the three Indo-Pacific democracies

Change in stance

  1. Until now the phrase in vogue has been “Asia-Pacific”
  2. For India, the repeated use of the phrase “Indo-Pacific” marks a shift in the US position
  3. It implies that the US acknowledges the centrality of the Indian Ocean to global peace and security

Indian Ocean region and India’s ambitions

  1. India has great ambitions in the Indian Ocean region
  2. It realises the potential that the Indian Ocean offers to it, economically and strategically
  3. India’s Act East policy involves strengthening its engagement in the Indian Ocean region
  4. India enjoys certain advantages in the region because of its centuries-old civilisational and cultural linkages with a number of countries
  5. The Indian Ocean Conference that is co-hosted by countries in the region like Sri Lanka, Singapore and India is steadily emerging as a forum for engagement of stakeholder countries

US expectation and India’s role

  1. The US seems to be looking at India’s role in the Indian Ocean region as a counter-balance to China
  2. For India, its regional role involves managing relations with all the countries, including China, while at the same time adhering to basic principles like rule of law and freedom of navigation etc
  3. Its regional ambitions are propelled by its security concerns on one hand and its trade and commerce imperatives on the other

Need of the hour: One South Asia policy

  1. The South Asia policy for the US leadership is actually only Af-Pak policy
  2. The South Asia policy needs to anchor around not just Pakistan and Afghanistan, but also India
  3. US military divides Af-Pak and India into Centcom and Pacom respectively
  4. The State Department has to bring both under one South Asia policy
  5. India’s views and sentiments also need to amply reflect in this policy

Foreign Policy Watch: India-United States

[op-ed snap] For the sake of the Indo-Pacific

Image source

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Rohingya crisis, Doklam issue, Paradip port, India’s position in Indo-pacific

Mains level: India-US relationship and way forward


Context

  1. US Secretary of State Rex Tillerson’s visit to New Delhi this week
  2. Visit comes at an important moment for both countries and governments

Relationship between India and USA

  1. The US-India relationship occupied high priority and visibility during the Obama administration
  2. The Donald Trump administration, too, has shown its commitment to the relationship, hosting Prime Minister Narendra Modi in Washington DC, earlier this year

Political and security challenges across the Indo-Pacific region

  1. These range from mounting tensions with North Korea, the Rohingya crisis, and India’s own standoff with China over Doklam to the lingering challenges in Afghanistan
  2. The US and India will increasingly need to work together on these
  3. The geo-economics of the Indo-Pacific are as important as the region’s geopolitics
  4. There is a need to put options on the table in order to encourage private capital and cutting-edge technology to invest in the region

US-India commercial ties 

  1. These have seen an uptick in recent years with PM Modi’s market-oriented reforms
  2. India is currently the US’ ninth largest goods trading partner
  3. India is also one of the fastest growing sources of foreign direct investment in the US, at nearly $11 billion
  4. In a groundbreaking development illustrating growing economic convergence, the US delivered its first shipment of crude oil to the Paradip port a few weeks ago
  5. While two-way trade, and investment, between the two countries has increased significantly in the past five years, there is much room to expand the economic partnership

Challenges that American businesses encounter as they compete in the Indian market

  1. Market access barriers for medical devices,
  2. Tariff and non-tariff barriers on ICT products and agricultural goods,
  3. Lack of a strong intellectual property framework that benefits innovation and entrepreneurship

What India desires?

  1. On the US side, movement — even incremental — on a totalization agreement would be a welcome relief for temporary Indian workers and Indian companies from paying an annual social security payment

Shifts in the global economic order by 2050

  1. A recent report predicts dramatic shifts in the global economic order by 2050
  2. Six of the seven largest economies will be emerging economies led by China and India

Importance of economic linkage with the US

  1. India’s position in a part of the world that contains the most important trade corridors necessitates deeper economic linkage with the US
  2. It is crucial for India to be able to develop its infrastructure, attract capital and cutting-edge technology, grow its economy and advance opportunities for its people
  3. India will only benefit by working with American businesses in order to attract private investment in a way that follows global standards for international development
  4. A fully realized US-India economic partnership is necessary to accomplish this

Foreign Policy Watch: India-United States

India, U.S. to take up ‘high tariff’, visa curbs in Washington meet

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

The following things are important from UPSC perspective:

Prelims Level: USIBC and USISPF

Mains Level: Trade between India and the US has significant effects on the economies of both countries. The upcoming talks will expedite the process of achieving ‘trade targets’ of India and the US.


News

Talks between India and the US

  1. India and the U.S. are slated to hold high-level talks this week to boost bilateral trade and investment
  2. On the agenda of the India-U.S. Trade Policy Forum (TPF), scheduled to be held in Washington DC on October 26

Issues to be discussed

  1. Important issues are to be discussed like ‘visa curbs’ of the U.S. 
  2. And India’s ‘high tariffs’ on manufactured products and ‘restrictions’ on e-commerce
  3. Also, both the countries will try to expedite the conclusion of negotiations on a bilateral social security pact (or totalisation agreement)

Concerns of India and the US

  1. The TPF is also likely to take up the ‘challenges’ that American innovative industries face due to India’s ‘weak’ Intellectual Property Rights regime
  2. It would also discuss the ‘non-tariff barriers’ of the U.S. that are adversely impacting India’s agriculture, pharmaceuticals and other industrial exports

Why is USIBC and US-India Strategic Partnership Forum (USISPF) important?

  1. Industry bodies including USIBC and USISPF are working with the governments of both the countries on mechanisms to ensure greater engagement at the State-level, instead of focusing entirely on the Central/Federal-level discussions

Foreign Policy Watch: India-United States

US resumes premium processing of all H1B visa categories

Note4students:

Mains Paper 2| Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: H1B visa basics

Mains level: Indo-US Relations


News

Context

The article tells us that the premium processing of the H1B visas for the US has resumed.

 What is H1B Visa-

  1. It is a visa which allows US employers to employ foreign workers in specialised areas of work that require theoretical and technical expertise.
  2. As mandated by the US Congress (part of Parliament of the US) every year USCIS (United States Citizen & Immigration Service) can issue a maximum of 65,000 H1B visas and 20,000 to those who have earned higher education in STEM subjects (Science, Tech, Engg. and Maths) from a US higher educational institution.
  3. H1B visas for academic and research institutes are exempted from the Congressional mandated limit.

 

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