Coming months may not be easy for either country as new bilateral trade regime takes shape; India may be expected to buy more US oil and defence products
Prime Minister Narendra Modi would have left Washington after his "official working" visit on February 13 with a sense of relief and satisfaction.
US President Donald Trump was effusive in his expressions of friendship towards Modi. That would have made the Indian leader happy even if Trump did not respond to Modi’s imitation of MAGA (Make America Great Again) with MIGA (Make India Great Again).
A pleased Modi
Modi would have been particularly happy that Trump emphasised his determination for a comprehensive development of the India-US bilateral relationship. In this context, the announcement in the Indo-US Joint Statement, that the two countries have launched a new initiative — US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce and Technology) for the 21st Century” — to drive transformative change across key pillars of cooperation was particularly significant.
It demonstrated that India and the US, despite their great differences in power and development and different approaches to some global issues, will continue to strengthen their ties in all areas.
Modi and the Indian foreign policy and security establishments would have been pleased that the case of Khalistani Gurpatwant Singh Pannun seems to be of such low priority for the Trump administration that National Security Advisor Ajit Doval was able to accompany Modi on this visit. He was unable to do so when Modi visited Washington last September to attend the QUAD summit convened by Trump’s predecessor Joe Biden.
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Rana’s extradition
Trump’s announcement that Tahawwur Rana, a Canadian who is originally from Pakistan, would be extradited to India to face justice for his involvement in the Mumbai terrorist attack of 2008 (26/11) was more a formality. Rana had lost all his appeals against the extradition, including in the US Supreme Court.
However, the fact is that Trump referred to it. And, when Rana comes to India, it will give the government an opportunity to push its view that it is relentlessly tough on terrorism. It is also noteworthy that the Joint Statement noted: “The leaders further called on Pakistan to expeditiously bring to justice the perpetrators of the 26/11 Mumbai and Pathankot attacks and ensure that its territory is not used to carry out cross-border terrorist attacks.”
It added: “They committed to strengthen cooperation against terrorist threats from groups, including Al-Qaeda, ISIS, Jaish-e Mohammad and Lashkar-e-Tayyiba in order to prevent heinous acts like the attacks in Mumbai on 26/11 and the Abbey Gate bombing in Afghanistan on August 26, 2021.”
Tariffs again
Naturally, Pakistan would not be happy with these comments but, clearly, Trump is not focussed on that country nor on Afghanistan, but on Iran, against which he has tightened sanctions.
Trump is transactional and he wanted to send a strong signal to Modi that he would no longer accept high tariffs on US goods exported to India. While Modi had prepared the ground by reducing some tariffs on a category of products imported from the US in the latest Budget, Trump wants more.
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Hence, even while Modi was in Washington, Trump announced that the US would impose “reciprocal tariffs” on all countries including India. He has called India particularly guilty of imposing trade barriers through tariffs. He had no reluctance in stating the same in Modi’s presence at their press conference in Washington. Modi kept quiet.
Indian concerns
COMPACT also envisages enhanced commercial and technology cooperation. Naturally, it will not be easy to work out a “reciprocal scheme” but the two countries’ trade experts would have to grapple with it to satisfy Trump.
The Joint Statement noted America's appreciation of India for already reducing some tariffs on “US products of interest in the areas of bourbon, motorcycles, ICT products and metals as well as measures to enhance market access for US agricultural products, like alfalfa hay and duck meat, and medical devices”.
India’s trade negotiators will have to press on a range of products of great interest to India, which are mentioned in the Joint Statement. These are “Indian exports of labor-intensive manufactured products to the United States”. In return, Trump wants India to ease on US exports of its industrial products.
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Military arena
All in all, the next few months may not be easy for either country as a new bilateral trade regime is put in place. This will have to include India buying a lot more US oil and gas.
Over the past few decades, India has turned more and more to the US for hi-tech defence products even as it has kept its choices open to importing security and defence equipment from traditional and other non-traditional sources.
The US has, through the decades, wanted India to turn to it more and more on collaboration in the defence field. India is doing so. The Joint Statement takes that vision to a higher level.
As for Trump, his main interest lies in India importing more and expensive American defence equipment. He is not that interested in India becoming an authentic producer of defence products with or without the collaboration of US companies.
The China factor
There is a coincidence of interests between India and the US over preventing the Indo-Pacific area from falling completely within the Chinese sphere of influence. This will inevitably mean greater cooperation and even coordination between the two countries in defence.
On technology, the Trump administration wants to cooperate but on US terms. It has made its determination known to remain the world leader in Artificial Intelligence.
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This is a subject on which the Modi government will have to give deep thought. The US approach to science and technology in general will not be any different. Ultimately, all countries have to rely on their own strength in these areas of knowledge.
Russia-Ukraine war
Modi praised Trump’s efforts to end the Russia-Ukraine war. He has said from the beginning that a solution to the issue cannot be found on the battlefield but on the negotiating table, he pointed out.
In this negotiating effort, Trump is essentially bypassing America’s European partners. He is bitter with them for not bearing the expenditure as much as the US has done in helping Ukraine.
Now meetings will be held in Munich and Saudi Arabia. There is the probability that Russia-Ukraine negotiations will begin. Trump has indicated that Ukraine will not be allowed to join the NATO. The negotiations will not be easy although Trump will no doubt lean on both sides.
It is interesting that there was no mention of the situation in Gaza or Trump’s plan for the Arab-Palestinian issue. This was no doubt because India and the US are far apart on the West Asian situation.
Illegal migration
Modi was wise in referring to the human trafficking aspects of illegal migration. He was also correct in stating that India would always take back illegals abroad whose Indian nationality has been established. However, where he remained silent was that victims of human trafficking should be sent back to India with dignity.
As Modi reaches India, the government and the ruling party will leave no stone unturned to hail his visit as a great success. The foreign policy establishment will heave a sigh of relief that it avoided all pitfalls.
It will be interesting to observe how the Indian government changes liability laws which will allow US companies to participate in the civil nuclear field.
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal.)
