July 24, 2019

Four hurdles to brighter India–US relations

The following article, excerpted below, originally appeared on East Asia Forum on 24 July 2019. The full text can be accessed here

India has denied US President Donald Trump’s suggestion that he had been asked to be a ‘mediator or arbitrator’ in the Kashmir dispute between India and Pakistan. India’s position has long been that the issue has to be resolved bilaterally. So it is no surprise that the media reaction in India has been critical, much as it was when US Secretary of State Mike Pompeo visited New Delhi in June and Trump met Indian Prime Minister Narendra Modi on the sidelines of the G20 Summit in Osaka.

But the state of commentary masks a number of important realities in the India–US relationship. One is the generally positive views of the United States in India. Only 9 per cent of Indians had an unfavourable view of the United States in a 2017 survey, the lowest among the 37 countries polled. A 2018 survey indicated that 75 per cent of India’s strategic community believed the United States to be India’s most important partner on global issues.

Although relations appear to be getting more transactional in the ‘America First’ and ‘India First’ era, the primary structural impediments to an India–US strategic partnership have eroded over the past two decades. Most notable is the removal of US sanctions on India after 2005 for its nuclear weapons program. The United States has become the second largest defence equipment provider to India by value after Russia and has supported India’s membership in major international organisations.

The trade relationship, which has grown from US$64 billion to US$88 billion over the past five years, underestimates the interconnectedness of the two economies. Nearly 2000 US-based multinational companies now operate in India, many conducting important research and development. US-based multinationals are major job creators in India. Indian investment in the United States has risen almost ten-fold over the past decade. For US tech giants such as Facebook and Amazon, India often represents their largest or fastest-growing user base.

Furthermore, in contrast to US relations with adversaries such as China and Russia or allies and neighbours such as Germany and Mexico, US ties with India have remained on an upward trajectory despite the transition from the Obama to the Trump administration. Cooperation on counterterrorism, maritime security in the Indian Ocean, infrastructure coordination, defence technology and energy has deepened. There are also hints of some convergence on future telecommunications technology.

Both countries have become more vocal in their support for freedom of navigation, including in the South China Sea. They both have concerns about China’s Belt and Road Initiative and share similar views about the normative basis of a free, open and inclusive Indo-Pacific as an underpinning for regional order. Given China’s continuing assertiveness and rising concerns about the arc of instability stretching from Pakistan to Yemen, the strategic logic of the relationship is being propelled forward.

However, the strategic elements of the relationship are not always on the same plane as bilateral relations. There are four big challenges that confront the relationship today. These topped the agenda during both Pompeo’s and Trump’s meeting with Modi.