India And US: Ready For The Trump Hug? – Analysis


By Saroj Mohanty*

Joe Biden, former US vice-president, spoke in an address to the BSE stock exchange in Mumbai four years ago, of certain basic principles in the way ahead for the US-India partnership. One of these is that the partnership would be “defined not by what it promises, but defined by what it delivers.”

This could be in the mind of Prime Minister Narendra Modi when he meets President Donald Trump in Washington on June 26 and holds a conversation, seeking a “new direction” for deeper bilateral engagement.

This will be Modi’s first meeting with the new Republican president. Expectations are that it would go well and both leaders would have the opportunity to review and refurbish bilateral ties. Personal relations between leaders do make a difference in the conduct of foreign policy. Both have spoken twice.

However, Trump’s critical comments on India while justifying the US pullout from the Paris climate agreement and earlier on immigration, outsourcing and tariff regimes have already struck a discordant note in the “symphony in play” that Modi only last year described in an address to the US Congress as the India-US “jugalbandi” (duet).

The one-on-one meeting has aroused a lot of interest, precisely because what many observers say is Trump’s “unpredictability” and his disruptive policies and flip-flops concerning China and West Asia.

Also, Modi would be in an America that is quite different from the America he has seen during his previous four visits. It has become inward-looking and isolationist. Under Trump, US interests are being redefined. It is withdrawing from an international system it helped to create over seven decades ago, with its belief in open borders and global trade, and multilateralism. What is seen now is economic nationalism which is being used as a bargaining chip in the name “fair trade,” that has threatened vital sectors of Indian economy.

Ahead of the visit, a statement issued by the Ministry of External Affairs said discussions would be aimed at consolidation of the multi-dimensional strategic partnership. There are indications that the talks would cover defence cooperation, energy and the balance of power in the Asia-Pacific, to which the US rebalance has already been deprived of its commercial component with the scrapping of the Trans-Pacific Partnership.

Defence Secretary James Mattis recently reaffirmed India’s status as a “major defence partner”. The designation paves the way for India to access sensitive defence and dual-use technologies on a par with US allies.

This would prove helpful to the Modi government’s plan to develop an indigenous defence and technology platform, necessary for India to become a comprehensive power. It is likely that the two sides would look into co-production, aligning with New Delhi’s “Make in India” programme with Trump’s “America First” policy. Last month, India unveiled a “strategic partnership” in defence production policy under which joint ventures between global majors and Indian private companies would be allowed under the “Make in India” framework.

The other area of synergy is counter-terrorism. Reports quoted Secretary of State Rex Tillerson as saying that the Trump administration has ordered an inter-agency policy review towards Pakistan. The two sides would like to find common ground on the fight against terrorism and ways and means of stabilising the situation in Afghanistan.

Also, there is the prospect of a mutually rewarding energy partnership. The energy industry in US is the largest in the world. The US, which is selling oil directly to China, can be reliable supplier of oil and gas to India. In fact, the US Department of Energy had commissioned, a few years ago, a report on the domestic economic impact of LNG export to India and found that it would reap rich benefits. Relevant in this context is the Trump administration’s decision to go in for more exploration and use of fossil fuel.

However, despite growing two-way trade and investments, economic ties remain and could prove problematic. Differences persist on both bilateral and multilateral trade issues, Intellectual Property Rights and visa restrictions on professionals.

The Trump administration’s policy measures have accentuated the vulnerability of sectors like IT and pharmaceuticals. Indian technology major Wipro has named Trump as a risk factor in its annual filing with the US Security and Exchange Commission. Similarly, business prospects of Indian drug-makers would be affected adversely as the Trump administration has begun moves to repeal the Affordable Healthcare Act, better known as ObamaCare.

India’s trade surplus of $24.3 billion has come under the scanner after Trump passed an executive order in March seeking an “Omnibus Report” on the trade deficit the US has with other countries. India would also be under pressure as the US National Trade Policy Agenda for 2017 stresses opening of markets for US agricultural products and intellectual properties. Also, the US International Trade Commission has initiated a study on restrictions and policy measures in major markets abroad that restrict digital trade.

The US is the country Modi has visited the most, signifying the importance his government attaches to the partnership. The relationship has flagged in recent months and it is no more a state of “comfort, candour and convergence” as he once described it. Trump’s protectionist policies also do not exactly place him in an ideal negotiating position.

However, a hallmark of Modi’s foreign policy has been an assertion of India’s national interests. He would seek more clarity and impress on the other side that the trade and investment partnership remain open and fair to benefit both the economies, particularly at a time when China is pushing a new geopolitical order with its Belt and Road Initiative.

Ever since the strategic shift in Indian foreign policy began after the end of the Cold War, the India-US relationship has developed and expanded on several fronts, adjusting to altered contexts, new realities. It may be worth waiting for Modi’s next tweet.

*The author is a veteran journalist and commentator on strategic issues. Comments and suggestions on this article can be sent to [email protected]

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