Regardless of a loud run-up and persevering with, thorny challenges, the Indo-US relationship has emerged from final week’s G-20 assembly in Osaka between Prime Minister Narendra Modi and President Donald Trump with a decidedly constructive trajectory. The 2 leaders pledged to work via their coverage variations and directed their subordinates to concentrate on 4 principal points: bilateral commerce frictions; India’s protection ties with Russia, by implication New Delhi’s plans to buy an S-400 missile protection system; India’s oil imports from Iran; and 5G expertise, extra exactly India’s stance in the direction of shopping for telecom gear from China’s Huawei.
Translating this bold negotiating mandate into agreements on these scores, nonetheless, is not going to be simple. And given the Trump administration’s historical past of impatience on commerce points with even its traditionally closest allies, comparatively fast outcomes shall be required to go off contemporary bilateral tensions.
Any reasonable highway map for attaining these targets and the improved strategic partnership that each New Delhi and Washington say they search will contain troublesome trade-offs and concessions. Either side might want to undertake a holistic view of their relationship, fairly than negotiating a collection of one-off, unrelated agreements. Whereas this week’s bilateral conferences – significantly US secretary of state Mike Pompeo’s in-depth discussions in New Delhi — have usefully conveyed negotiating pink traces, they’ve additionally offered a way of the place each international locations can reveal the pliability important to transferring the connection ahead.
India’s negotiating pink line is securing a US waiver that may allow it to purchase the Russian S-400 Triumf missile protection system with out triggering stiff American sanctions beneath the Countering America’s Adversaries Via Sanctions Act focused at Russia. Some observers had earlier prompt that India was ready to forego this buy, significantly for the reason that Trump administration seems decided to make good on its menace to sanction NATO ally Turkey for continuing with the same purchase.
However Indian minister of exterior affairs S Jaishankar final week emphasised throughout Pompeo’s go to that India would act in its “nationwide curiosity,” code phrases that the S-400 deal is on with Russia, which stays India’s largest (if not now its most essential) protection provider. Contrasting the context of India’s choice with Turkey’s on S-400 purchases, the Indian aspect identified that New Delhi’s protection ties are deepening with Washington whereas Turkey is more and more wanting in the direction of Moscow. Extra importantly, the Indians have additionally signalled that any US sanctions on their S-400 buy would jeopardize future purchases of American army {hardware}, estimated at as much as $12 billion within the subsequent three years.
For the US aspect, its non-negotiable problem is guaranteeing that India stop oil purchases from Iran, which has historically equipped 10% of its crude necessities. Though India’s ambassador to the USA, Harsh Vardhan Shringla, has acknowledged India’s intention to adjust to the US request within the curiosity of sturdy bilateral relations and to keep away from US sanctions, his senior Indian colleagues in New Delhi haven’t been as unequivocal. Along with stopping crude imports from Iran, the US has additionally urged India to halt oil imports from Venezuela, the thing of separate US sanctions and a key supply of heavy crude to switch Iranian provides.
If Indian and US negotiators can comply with a trade-off on these pink line points, progress on different core bilateral irritants recognized by Modi and Trump shall be smoother. On commerce, India is more likely to comply with additional diminished tariffs on the small variety of Harley Davidson bikes that it imports, take extra steps to ease worth controls on medical gear and restrictions on agricultural imports, and transfer to “de-bilateralize” disagreement on information localization that’s extra appropriately the topic of multilateral discussions. These measures may make a small however vital dent in India’s comparatively modest merchandise commerce surplus with the USA, which is presently solely one-twentieth of China’s surplus and fewer than Italy’s.
In response to Indian tariff concessions and elimination of some non-tariff boundaries, the USA for its half may redesignate India as a beneficiary of its Generalized System of Preferences (GSP) program. Trump’s Could 31 choice to terminate GSP for India, this system’s largest beneficiary, affected $6.three billion, or 12%, of Indian exports to the USA in 2018. Whereas Indian officers on the time performed down the financial affect of the choice, GSP redesignation assumes large significance at a time when the Indian economic system is struggling.
An Indo-US settlement on constraining Huawei’s world attain also needs to be achievable as a part of what Trump in Osaka referred to as “a really massive commerce cope with India.” Mutual concern about China, together with about Huawei and different Chinese language telecom firms, has been a important glue within the New Delhi-Washington relationship for greater than 15 years, even earlier than the seminal US-India civil nuclear settlement was finalized in July 2005. On the similar time, Indian negotiators might resist, as a negotiating tactic, signing on to the robust US marketing campaign in opposition to Huawei within the absence of a extra complete commerce bundle.
India’s greatest problem shall be really closing a deal. New Delhi’s negotiators are famously robust but in addition famously rigid. Their incentive to succeed in compromises ought to be boosted by Modi’s sturdy private dedication to deeper and wider ties with Washington. The understanding in New Delhi is that the Prime Minister’s new group has each the accountability and authority to interrupt from India’s conventional go-slow negotiating mould and ink a deal. This locations a substantial burden on India’s level negotiator, newly-installed exterior affairs minister S Jaishankar, a former Indian ambassador to the USA who has distinctive insights and a large community of contacts about and in Washington.
On the US aspect, the most important obstacles are its disjointed policymaking course of, the shortage of senior-level India experience, and the absence of a champion for the bilateral relationship. Reducing a complete cope with India that spans commerce, defence, power, and nationwide safety traces requires a strong inter-agency course of that the Trump administration has so far eschewed.
As well as, the lead place for Indo-US relations throughout the US division of state, the assistant secretary for South & Central Asia, stays unfilled two and a half years into the Trump presidency, and the South Asia wing of the Nationwide Safety Council has been preoccupied with righting US coverage in the direction of Pakistan. There isn’t any American negotiating equal of Jaishankar and, simply as considerably, no efficient cheerleader for the Indo-US relationship for the reason that departure of James Mattis as US protection secretary.
To complicate these challenges for sustaining a constructive bilateral trajectory, the US commerce consultant’s workplace, with White Home approval, may provoke a so-called Part 301 investigation of India’s “unfair” commerce practices until an early and complete settlement on bilateral irritants is reached. This is similar discretionary mechanism by which Trump has levied unprecedented tariffs on Chinese language imports – and will do the identical to Indian items sure for the US market.
Although the clock is much less loud post-Osaka, it continues to tick for motion on nagging bilateral points that arguably may and may have been sorted months and, in some circumstances, years in the past. It’s now as much as Indian and US negotiators to reveal the identical dedication, maturity, and, above all, flexibility as their leaders did final week.
The author is the South Asia specialist for The Scowcroft Group
