INDO - US RELATIONS : Full Details (Trade and Economy)

Background

1. On 26 July 18, U.S. President Donald J. Trump hosted Indian Prime Minister Narendra

Modi for the first face-to-face meeting between the two leaders in Washington, DC. This was Modi‘s fifth visit to the United States since becoming prime minister. This meeting was special because the present president didn‘t necessarily share his two immediate predecessors‘predispositions toward India.

2. US President claimed that USA is looking forward to working towards creating jobs in both the countries and a trading relationship that is fair and reciprocal.‘ Trump termed India and the US as global engines of growth. While Indian Prime Minister Modi said that India considers the US as its primary partner for social and economic transformation in flagship programs.

3. There were other highlights of the meeting including terrorism, North Korea, Pakistan, economic cooperation, defence deals, and investment in India.

Highlights

4. Anti-terrorism. Trump used the strongest words to address the issue of terrorism. The US statement read- ―The security partnership between the US and India is incredibly important. Both nations have been struck by the evils of terrorism and we are both determined to destroy terrorist organisations and the radical ideology that drives them. We will destroy radical Islamic terrorism.

5. Trade and Economy.

(a) Trump urged Modi to do more to relax Indian trade barriers during talks in which both leaders took great pains to stress the importance of a strong US-India relationship. Donald Trump said that he is keen to work with PM Modi on creating a ―fair and reciprocal‖ trading relationship between the two nations and called for the removal of ―barriers‖ for the export of US goods into Indian markets.

(b) Indian statement stated, ―We are global engines of growth. The all-around comprehensive economic growth and joint progress of both countries and societies are the priorities of India and US.

(c) Meanwhile, Trump showed his satisfaction over Indian airline‘s recent order for 100 new American planes, and the United States looked forward to exporting more energy, including major long-term contracts to purchase American natural gas.

6. The Rules-Based Order, Freedom of Navigation, and the Belt and Road.

(a) Though, like last year, no direct references to the South China Sea or China were included, they called on ―all nations to resolve territorial and maritime disputes peacefully and in accordance with international law.

(b) In an implicit reference to China‘s Belt and Road Initiative India and USA issued a joint statement stating US support for bolstering regional economic connectivity through the transparent development of infrastructure and the use of responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and ―The environment.

7. The Missing Issue of Climate Change.

(a) The Indian Prime Minister omitted the issues related to climate change and climate justice as Trump‘s unilateral decision in late-May to pull the United States out of the Paris climate agreement.

(b) On the USA‘s decision to withdraw from the Paris agreement India claimed to go ―above and beyond‖ the accord. 

(c) The Joint statement observed that a rational approach is needed to balance environment and climate policy, global economic development, and energy security needs.

8. India‘s Global Governance and Institutional Aspirations. The Indian Prime Minister Narendra Modi did not mention by name India‘s aspirations for membership on the United Nations Security Council as a permanent member or the Nuclear Suppliers Group. PM Modi said on this issue that India is extremely grateful for the continued support of the United States for India‘s membership of international institutions and regimes, which was ―in the interest of both our nations‖. The joint statement addressed Indian interest in these institutions and regimes. These institutions and regimes include India‘s aspirations for early membership in the Nuclear Suppliers Group, the Wassenaar Arrangement, the Australia Group, and the UN Security Council. Apart from it, this year‘s statement did not mention of U.S. support for India‘s inclusion in the Asia-Pacific Economic Cooperation (APEC) forum.

9. Afghanistan and North Korea.

(a) The Afghanistan issue, notably, made an appearance in both leaders‘ remarks. ―I also thank the Indian people for their contributions to the effort in Afghanistan, Trump noted. The joint statement offered a more detailed look at how both sides see the issue.

(b) The statement said the increasing instability, due to terrorism, in Afghanistan is one of our common concerns. Both India and America have played an important role in rebuilding Afghanistan and ensuring its security. In order to attain our objectives for peace and stability in Afghanistan, we will maintain close consultation and communication with the U.S. to enhance coordination between our two nations. 

(c) Additionally, in a demonstration that Trump and Modi managed to keep the U.S.-India momentum on regional and global issues going during their first meeting, North Korea came up as well. Trump thanked India for ―joining us in applying new sanctions against the North Korean regime. This appeared to be an acknowledgement of India‘s decision in May to suspend most types of trade with the Pyongyang regime.

(d) The joint statement included an entire paragraph on North Korea - a sharp difference from last year‘s statement:

(i) The leader‘s strongly condemned continued provocations by the Democratic People‘s Republic of Korea (DPRK), emphasizing that it‘s destabilizing pursuit of nuclear and ballistic missile programs poses a grave threat to regional security and global peace. The leaders called on DPRK to strictly abide by its international obligations and commitments. The leaders pledged to work together to counter the DPRK‘s weapons of mass destruction programs, including by holding accountable all parties that support these programs.

(ii) The Indian move will no doubt be seen as an important success for the Trump administration‘s policy of applying ―maximum pressure on the Pyongyang regime. India is one of North Korea‘s most significant trading partners; in 2015, it was Pyongyang‘s second largest export destination after

China. In 2015-2016, India imported $88 million in goods from North Korea

while exported $111 million.

10. Conclusion.

(a) The statements by both leaders and the joint statement make clear, the ―strategic partnership‖ remains broad enough to cover the issues that had appeared previously — with the notable omission of climate change.

(b) During the joint meeting, Indian Prime Minister Modi kept coming back to the question of why the U.S.-India relationship matters. Mr. Modi even went to say that the two sides were not ―partners by chance,‖ but ―partners in dealing with current and future challenges that we may be faced with.

(c) By most measures, there is no doubt that the broader trajectory of the bilateral relationship between India and the USA remains set and positive. The conclusion of the Guardian UAV sale - a development that saw its genesis in the Obama administration‘s final year - does speak to the extent to which this relationship has been deeply institutionalized and bureaucratized. Moreover, the continuity across the Obama and Trump administrations on a range of global questions additionally speaks to the maturity of the U.S.-India bilateral, which remains stable.

(d) However, as Modi emphasized, the relationship does have a future ahead of it that

won‘tbe free of challenges.