Despite advances in defense relations, trade agreements, sanctions and nuclear energy hang on fire
With exactly one month remaining in the term of the president of the United States, Donald Trump, the ambassador of the United States in India, Kenneth Juster, initiated a series of calls to the Minister of Defense, Rajnath Singh, and the Minister of Oil, the Minister of Gas Natural, Dharmendra Pradhan, and NITI Aayog boss Amitabh Kant, as well as “farewell discussions.” with the United States and India Chambers of Commerce USIBC and USISPF.
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The calls highlighted the achievements of the India-US partnership over the past four years. While these include major advances in the diplomatic, defense, trade, energy, and health areas, talks about waivers of possible sanctions, trade negotiations, and nuclear agreements are in the category of “unfinished business” between the two countries.
No free pass
In a briefing this week, a US official made clear that despite the hopes raised in 2018 by the US Congressional amendment to the Countering US Adversaries Act, it was not the case. Through Sanctions (CAATSA), which allowed the US president -400 missile systems from Russia, Trump has not made the decision to give India a pass.
Speaking about the sanctions against Turkey for the purchase of the S-400, the official said that this should be seen as a warning to others hoping to acquire the system.
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“We would warn other American partners not to make major purchases of Russian defense equipment in the future, which would also put them at risk of sanctions,” R. Clarke Cooper, undersecretary for Political-Military Affairs at the Department of Defense, told reporters in Washington. US state that sanctions could be updated at any time and “blanket exemption” is not possible.
“I know that some states have thought or sought that Congress or the Executive Branch would apply a waiver to the sanctions, and simply offer that this is definitely not the case,” said Cooper, who had previously called on India to consider the warplanes. S-400 and Sukhoi S-35 are so “problematic” as they would jeopardize the interoperability of the Indian and US defense systems.
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However, when asked about the latest comments from the United States, Indian government officials dismissed the concerns.
“There will be no problems in the interoperability of the US and Russian systems as they will be connected to the Indian network. There are filters for that, ”said a defense official. The Hindu.
“The S-400 is a high-tech platform and it’s a priority acquisition and the United States understands that,” said another official.
However, since Democrats had pushed through the CAATSA law, the government will have to risk having incumbent President-elect Biden provide the waiver once India receives the S-400 systems in 2021.
Stop trade
Trade negotiations are another area in which New Delhi expects the Biden administration to recover where it believes the Trump administration failed to deliver, in particular its inability to reverse the decision to revoke India’s Generalized System of Preferences (GSP) from June. of 2019 due to differences in the areas of medical devices, dairy and computer products.
In comments to the FICCI business chamber this month, Foreign Minister S. Jaishankar said Indian officials were willing to strike a deal, but that “it did not happen,” indicating that the problem was at the end of the US Trade Representative And they expected to resume talks with Katherine Tai, appointed by the USTR.
In another discussion with the IIC, however, USTR Robert Lighthizer blamed “extremely high” Indian tariffs for not reaching an agreement on even a “mini trade agreement” discussed by his team and Ministry of Commerce officials for two years, and that “political change” in Washington would be “a small setback” that “will slow things down.”
Meanwhile, officials hope that a commercial contract for the decade-long MOU between the US-based Westinghouse Electric Company and the Nuclear Power Corporation of India Ltd (NPCIL) to build six reactors in Andhra Pradesh, the first since Modi and US President Obama announced that “the deal is closed” in 2015; he has also been disappointed by the lack of progress. Despite some hopes that the contract will be signed during President Trump’s visit to India in February 2020, the deal has yet to materialize, indicating lingering concerns about India’s liability laws, which should be discussed with the Biden administration.
Both Indian and US officials note that the record of accomplishments over the past four years has been considerably longer than “unfinished business.” They say that while New Delhi is now preparing with hope for the Biden era, this period of openness, particularly Trump’s “direct” and tough methods with the two main adversaries of India, Pakistan and China, and his flexibility in defense ties with India. , would be missed.
Personal proximity
In particular, they point to the intense political engagement between Trump and Modi, including two large joint public rallies in Houston and Ahmedabad that were held just five months apart in 2019 and 2020. The growing defense partnership enhanced military exchanges enhanced by the signing of four key agreements: GSOMIA, LEMOA, COMCASA and BECA, the US granting the STA-1 Strategic Trade Authorization to India, limited by intelligence sharing and swift acquisitions during the ongoing standoff between Indian troops and Chinese in the Line of Royal Control (LAC), is clearly at the top of the list of achievements.
Added to this is the crystallization of the Australia-India-Japan-United States “Quad” arrangement and the “Indo-Pacific” policy that has led to regular talks at higher levels and the inclusion of all the Quad military in the ‘ Juggle ‘exercises this year.
Growth in trade in goods and services (from $ 109 billion in 2015 to $ 142 billion in 2019) and the increase in U.S. Foreign Direct Investment (FDI) to India (from $ 35 billion at $ 45 billion) is significant, albeit less than expected, given a shift away from trade between the United States and China. Most notable perhaps is the rapid growth of energy ties, fueled by the US decision to allow oil exports in 2015 and India’s decision to reduce oil imports from Iran and Venezuela due to the threat of US sanctions.
As a result, in just two years from 2017 to 2019, Indian imports grew from zero to $ 4.5 billion, with the United States now accounting for a growing share of Indian oil and LNG imports.
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