US CONFIRMS TRUMP’S VISIT TO INDIA
Context: US President Donald Trump is set to make his first official visit to India in February end and the trip is expected to witness deepening of defence cooperation and signing of a trade pact.
- Trump’s visit has raised hopes that both countries will work out a limited trade dealto lessen India’s trade surplus with the US. Once at $30 billion, the surplus in India’s favour has now narrowed to $16 billion
- Bilateral trade in 2018 stood at an estimated $142.1 billion.
- The Trump administration has been pressing India to reduce tariffs to narrow the trade surplus.
- New Delhi, on its part, has argued that it is already a major buyer of US energy and has also ramped up its defence purchases from the US in recent years.
- New Delhi is expected to approve a $2.6 billion deal for military helicopters from US defence contractor Lockheed Martin Corp.
- India’s Cabinet Committee on Security is likely to clear an order for 24 MH-60R Seahawk helicopters for the Indian Navy in the days ahead.
- The helicopters are expected to be bought under a government-to-government deal through the US foreign military sales route.
- The US State Department said it had approved an Indian request for an Integrated Air Defence Weapon System for an estimated $1.87 billion.
- India now views the US as one of its key strategic partners and has bought $18 billion worth of defence equipment in little more than a decade.
- The trip will further strengthen the US-India strategic partnership and highlight the strong and enduring bonds between the American and Indian people
- Trump’s two-day, two-city visit would further bolster the strategic partnership between the two democracies.
- Trump will be the fourth consecutive US president to visit India since Bill Clinton’s trip in 2000.
- Clinton’s successor, George H.W. Bush, visited in 2006 and Trump’s predecessor, Barack Obama, came twice—in 2010 and 2015.
- The visits are illustrative of how far ties between the two countries—once dubbed “estranged democracies” for the evident lack of warmth in ties—have progressed.
- India was once seen on the side of the erstwhile Soviet Union during the Cold War years and the US as an ally of Pakistan.
- Trump’s decision shows continuity in US policy and that he himself attaches importance” to ties with India
MILESTONES IN INIDIA-US TIES
- Increase in bilateral trade& investment
- Co-operation on global securitymatters
- Inclusion of India in decision-making on matters of global governance (United Nations Security Council)
- Upgraded representation in trade & investment forums (World Bank, IMF, APEC)
- Admission into multilateral export control regimes (MTCR, Wassenaar Arrangement, Australia Group) and support for admission in the Nuclear Suppliers Group
- Joint-manufacturing through technology sharing arrangements
- In 2016, India and United States signed the Logistics Exchange Memorandum of Agreement and India was declared a Major Defense Partner of the United States.
- The US is India’s second largest trading partner, and India is its 9th largest trading partner.
- In 2017, the US exported $25.7 billion worth of goods to India, and imported $48.6 billion worth of Indian goods.
- Major items imported from India include information technologyservices, textiles, machinery, gems and diamonds, chemicals, iron and steel products, coffee, tea, and other edible food products.
- Major American items imported by India include aircraft, fertilizers, computer hardware, scrap metal, and medical equipment.
- The United States is also India’s largest investment partner, with a direct investment of $10 billion (accounting for 9 percent of total foreign investment).
- Americans have made notable foreign investments in the Asian country’s power generation, telecommunications, ports, roads, petroleum exploration and processing, and mining industries.
- The two countries are working with other like-minded partners in the Indo-Pacific to ensure that there is freedom of navigation and peace in the resource-rich region where China has been trying to spread its influence.
- The US is happy that India is now helping giving an institutional shape to Quad – an informal consultative mechanism. Japan and Australia are the other two countries of this grouping.
- The US also supported India’s stand on Maldives as India took the lead to ensure that a third country does not interfere in its internal affairs.
ISSUES IN INDIA US TIES
- India seeks exemption from high duties imposed by the US on certain steel and Aluminum products
- Resumption of export benefits to certain domestic products under the US Generalized System of Preferences (GSP)
- Greater market access for its products from sectors such as agriculture, automobile, auto components and engineering.
- The US, on its part, wants greater market access for its farm and manufacturing products, dairy items and medical devices, and a cut on import duties on some products.
- The US has also raised concerns over the high trade deficit with India.
- The Indo-U.S. ties have gathered momentum fuelled by strategic realities and political convergence.
- Strategic dialogues and military exercises between the two have become more sophisticated and elaborate.
- Therefore, leaders on both sides need to chart out a pragmatic vision of what is achievable over the next half decade, with concrete steps along the way.
- The US needs to understand that a long-term American commitment to India in the Indo-Pacific region is the only way to operationalize the vast potential in Indo-U.S. strategic relationship into concrete policy outcomes while preparing India as a credible counterweight to the Chinese power in Asia.