India and the U.S: Just where is this relationship headed?

The new issues are now tax disputes, IP concerns and localization for the US; and immigration reforms, market access, protectionism and totalization on the India side.

WHAT COMES next in India-US relations?  (photo credit: REUTERS)
WHAT COMES next in India-US relations?
(photo credit: REUTERS)
Sunday, September 22, was a historic day, when a sitting US president was a guest in the largest-ever gathering with a foreign head of state – Indian Prime Minister Narendra Modi – in the United States, an event attended by over 50,000 in Houston, Texas.
The reason for this meet was severalfold. Although they make up barely 1% of the US population, close to four million, Indian Americans are the most educated and richest of all the ethnic groups in the US, including white Americans. This group is increasingly becoming ever attractive to US congressmen and candidates. The president was playing his “Trump” card to sway some of the Indian voters in the next election.
The US-India relationship has evolved through the last few decades, and would appear, at least on the surface, to be at its closest point today. The two leaders share some similarities. Both are immensely popular in their countries, have huge mandates, are master communicators and know how to work the media in their favor. President Donald Trump thanked the Indian American community for its contribution to the US and reiterated that India will have a true friend in the White House with his administration. He also noted the launch of the NBA in India, with the first NBA game to be played in Mumbai next week. He jokingly asked if he was invited, as he may actually show up!
In the matter of the withdrawal of US troops from Afghanistan, the US is rethinking its options and strategies. It has been overdependent on Pakistan on this matter in the past, but that is coming to an end, with Pakistan’s continued support for terrorism in the world. Trump stressed that the two countries should come together for the common causes of national security, counterterrorism and fighting global radical Islamic terrorism.
On paper, the two should be strong allies, and have great business relations. Both are secular liberal democracies, free market capitalists, have shared threats and hold similar values and morals.
SO, WHAT have been some of the issues that have stood in the way of better relations between the two powers?
Over the last few decades, this dynamic has certainly evolved, leaving behind the famous description of the economic cooperation being “flat as chapati flatbread.” The nuclear differences used to be a thorn stuck in the throat of this relationship. The new issues are now tax disputes, IP concerns and localization for the US; and immigration reforms, market access, protectionism and totalization on the India side.
Trade has quadrupled to $100 billion in the last seven years, and US investments in India have crossed the $50b. mark. India has cleared 286 projects worth $97b. last year. Indian companies have invested $17b. in the US, $350 million of which is in R&D, and the recent aircraft defense contracts have created 40,000 jobs in the US.
But there is still a long way to go. A fair dialogue should also take place considering India’s priorities and concerns. Demonizing the climate of doing business in India by US companies could end up being counterproductive.
India’s minister of external affairs, Dr. Subrahmanyam Jaishankar, on his visit to the US, stated that he sees far fewer issues than India’s own protectionism that have been obstacles to doing business. One area is the energy sector. India is the world’s third-largest importer of energy and meets most of its energy needs from the Gulf. The recent deal of an Indian company’s offtake of Shell gas will have huge positive ramifications for the Indian economy.
He stated, “I do see and hear an America which wants to [see] a much more partnership-based management of world security.” The US Navy exercises with the Indian Navy more than anyone else in the world.
He stressed that the limitations put on H1B visas to skilled Indian workers hurts not only India but also the US economy, especially when there are severe skill shortages. An immigration reform that is much fairer would shape the Indian perception of how open the US economy is. The US has to overcome its inclination to view ties through the lens of alliance practices, while India may have to indulge itself a little less in compulsive ambiguity.
He went on to say, “Once we have a political and military comfort level, we can come into any situation with harmony and can collaborate on many global initiatives together, be it humanitarian operations or counterterrorism exercises. Relationships are never easy. The grand strategy underwriting our ties is fundamentally sound. It needs maintenance from time to time, and sometimes an upgrade.”
International diplomacy is a delicate balancing act. India has good relations with Iran as well as Russia and China, all of which are adversarial to the US. On the other hand, the US gives billions in aid to Pakistan, which in turn sponsors cross-border terrorism as well as training and giving refuge to radical Islamic jihadist elements.
That said, India does see the US as a stabilizing presence in Asia. Asia is an area whose security architecture is evolving. When you have two important players that have, broadly, a convergence and comfort level in working together, it’s imperative that the two should do so.
The Indian-American diaspora plays a huge role in the US-India relationship. The average American’s impression of India is very much shaped by his interaction with the Indian community, and today that impression is a very positive one.
Now that a lot of the prior obstacles for doing business have been cleared, it’s time to get back to doing business!
The writer is a political editor and analyst based in Los Angeles. She specializes in Geopolitical strategies, international affairs, conflict resolution and counterterrorism.