Challenges – Climate ( billions and billion of dollars), More bonhomie with China, H1B, America First, Post Truth, Diminishing role in Af, No actual steps against Pak, Other issues like WTO,
Modi quoted Walt Whitman in speech to congress – ” new symphony in play” and ” overcome the hesitations of history”
Trump
These are testing times but it is also a source of opportunity
Need for wait and watch
Positive
Strategic
Anti- China
Has reduced the initial inhibitions though and has hosted Xi
Bipartisan agreement that India is a crucial partner for US
Bill Clinton, Bush, Obama (first year- pro China then reversed )
Courting Indo- American during the camaign
Abki baar Trump Sarkar
Terrorism
Willing to walk the extra mile against Terrorism
MOAB, Syria
Pakistan
Accused of sheltering terrorists
And has warned to cut the Coalition Support Funds
Negative
Hostility towards Indians
Attack on Indians
Economic
Inwarrd looking policies
19th century isolationist
Border Tax
In fact, Isolationism has started not since Trump, but even before
WTO -Since 2010, Protectionist measures ( Anti- Dumping, Safeguard etc ) have risen by 400%
Economic Survey – De- Globalisation
BREXIT
America First
DCR in solar plants of 8 states in USA – 1st battlefield of America First vs Make in India
H1B
What ?
Non Immigrant VISA to skilled workers- 85k Visa every year – 70% Indians – Principply IT companies
Why so much Indian – Indians work for less – Data shows 80% of those working through it have salary less than median wage
Bill
Many
1 salary floor limit – 1 lakh 30k $
Others – Cut in the no of visas, Limit a firm to employ only upto 50 employees through this, no work permit to spouses etc
The program to expedite the H1B visa issue on fee payment has already been suspended
Problem –
To India
US 60% market of IT companies – which could see a decline
India has already dragged US to WTO on the issue – says it is counter to MFN treatment under GATS
Way out
India should align with USA outsourcing companies .
More productivity
Other markets – Japan, China, Germany, Africa
WTO
Corporate taxation – reduce to 15%
Make in America at the cost of Make in India
Beggar thy neighbour
FDI, FII would flow outside – Less tech and enterprise flow
Depreciation of currency – Debt repayment burden increases
Positive – Depreciation provides some export competitiveness, and Greater Profitability may mean more investments in LDCs and Developing countries
Counter
Pulling out of TPP favours India
Funding to NGOs related to abortion
US can become more demanding
Trump – hard bargainer
Till now it has been felt that US has done too much for India – Nuclear deal
India may be asked to adopt a more confrontationist approach against China, sign BECA, communication interoperability and so on
Arm twisting the world
The recent G 20 summit reversed annual precedent of making statement to fight aginst protectionism and climate change
Climate change
Out of the Paris Agreement
Should we give concession to give USA over climate change ?
No
Pressure from within US – May force Trump
Maximum damage to us
Costs of concession – Pandora’s Box
North Korea
India for the 1st time has Supported the sanctions in a full-fledged manner on NK
Why Confrontation so much now ?
President Trump
Possibility of NK developing Bassistic missile which can hit USA- The red line
Nuclear Deal ?
No, Sir, NK has unfortunately not dealt with the previous deals well and further appeasement may only mean it operating the weapons program in a clandenstine manner
Measures required
Tougher measures. Tougher sanctions
Ensure that China and other countries enforce these sanctions. India has lent full support to it- President Trump has said if China provides support, then willing to provide concessions to China on trade
Important to ensure that S K and Japan do not become victimised here. Hence, their protection becomes important
India-US Delhi Declaration of Friendship
issued after the Modi-Obama meeting in Obama’s visit 2015.
The declaration said: “Chalein Saath Saath – forward together we go,”.
Details of the Joint statement:
It laid stress on the importance of strengthening bilateral defence ties, creation of transparent and rules-based markets and cooperation on climate change.
commitment to strengthening maritime cooperation, by ensuring security and freedom of navigation in the contentious South China Sea.
closer India-Japan-US trilateral dialogue at the level of their respective foreign ministers.
The US has also promised to help India become a member of the Asia Pacific Economic Cooperation (Apec).
A forum for free trade bloc in Asia Pasific Region- a precursor to Trans Pacific partnership -TPP
The US also promised to help increase India’s voice and vote at international financial institutions like the World Bank and the International Monetary Fund.
identified Lashkar-e-Toiba, the Haqqani Network, D Company and Jaish-e-Mohammad among the terror outfits whose networks the two nations will take joint concerted efforts to disrupt. It also asked Pakistan to bring the perpetrators of the 26/11 Mumbai terrorist attack to justice.
developing Ajmer, Allahabad and Visakhapatnam as smart cities.
Strategic – Growing STRATEGIC CONVERGENCE
Containing China
Pivot to Asia
Russia has unveiled a naval policy highlighting China as core partner in the pacific
USA will shift the focus from Atlantic to the Pacific region around the China seas
Will deploy 60% of its armed forces in this region
And also engage with the other countries in the region at Economic, social & cultural level
Japan hoped to create the Diamond/quadrilateral security comprising US, Japan, India & Oz
Another counter of Asian Pivot is OBOR Chinese Eurasian project
Some also call it the ‘Great Asian Games’ or to refer to the conflicting interests in the Indian Ocean
Trilateral and strategic quadrilateral – MALABAR expansion
Defence
Major Defence Partner
On the similar lines like Natural strategic allies of US
The presumption of Approval
Will help India aquire dual use techs from US without licensing requirements
Yet, does not gurantee access to all which depends on US laws
For eg sensitive techs have been sold to only Britain
USA now the largest supplier to India
10 billion dollars
AWACS, Hercules , talks for apache and cheetah helicopters, anti tank Javelin missiles, harpoon missile, p-8l maritime aircrafts, globemaster airlift
Without doubt, One of the best technologies
In the past Russian technologies have been found inferior- INS Sindhurakshak, Mig 21, Admiral gorshov price escalation
Military exercise-
US holds more with India than any other country
India part of the largest Rim of the Pacific exercise
Most famous Malabar
involving the navies of the 2 countries
Recently, Japan also included as a Permanent member in it
Scent of US Asia Pivot
Why exercises? – Strategic Signalling ( US- Korea in SC Sea), understanding, keep prepared, CBM, Disaster, Interoperatibility in Piracy, etc
How ?
By DEFENCE FRAMEWORK AGREEMENT
10 year deals first signed in 2005, and then renewed in 2015
Basically, is a treaty of high level strategic discussion
Also cooperation on information sharing, anti terrorism, disaster relief, free flow of trade in Indian Ocean….
Defence Technology and Trade Initiative (DTTI)
DTTI is an initiative which is within the defence framework.
Basically it is a technology transfer scheme, subject to conditions like not being resold
Included this time – next generation Raven Mini UAVs, a device which the Indian Army was eyeing. If the joint manufacturing of the UAV happens, then India would be able to get a slice of the multi-billion order book for the world’s most advanced hand-launched drone. Also included projects are aircraft carrier landing system, etc
The agreement would help upgrade the country’s domestic defence industry and expand the manufacturing sector in India. The agreement would guide the bilateral defence cooperation for the next 10 years.
Special cell in the Pentagon for India relations
To look after DTTI
India is only country to get such a cell
Ongoing Active defense agreements
LEMOA- AGREED
Logistics Exchange Memorandum of Agreement
To use each other base, fuel etc in a reciprocal agreement in cashless transaction
For repair, refuel
Also in case of disaster management or other agreed upon situation – HADR (Humanitarian Assistance in Disaster Relief)
But does not mean basing of US troops in India
Also does not necessitate joint offensive operation
Any further cooperation by mutual consent on case to case basis
Pending
CISMOA
Communication interoperability and security memorandum of agreement
BECA
GPS support to each other
Use the term GEOSPATIAL INTELLIGENCE
White Shipping Agreement
The 2 navies share information about entrance of ship in their waters
Very effective in counter terrorism operations
Cons
Access to our encrypted message
What happens in case of war
In war with friendly country of India
Alienate Russia
Anti US in home
To be formalised via the US-India Defence Technology and Partnership Act which has been introduced as a bill in the Congress
Will also formalise India as a major strategic partner
Terrorism
Pakistan
Trump accused Pak of sheltering terrorists
And has warned of cutting coalition support funds
White Shipping agreement
Presidential homeland Security Directives – India signred HSPD -6
Indian role in Afghanistan
NUCLEAR
Nuclear Agreement
123 agreement
Referred to as The most important agreement ever between India and US
Right to reprocess spent fuel
Fuel supply guarantee from USA. Right to build a strategic reserve
Non interference in India’s nuclear weapons program
prompt compensation to the victims , appointment of Claims Commissioner, establishment of Nuclear Damage Claims Commission
Importance of the Act:
After this Act was passed, India became a member of the iConvention on Supplementary Compensation for Nuclear Damage (CSC)
Important provisions:
Supplier not liable
Compensation to be provided by operator NPCIL
Compensation limit maximum 300 million dollars or around 1500 crores
Nuclear Liability Fund
Corpus of 2000 crore
By charging the operator a levy of 5-6 paisa for every unit of electricity sold
Operator in turn can sue the supplier limit by invoking Section 17(b)
in case supplier is at fault
Further section 46 says supplier can be sued under any Indian tort law by any citizen
Motive of the Act was to legally and financially bind the operator and the government to provide relief to the affected population in the case of a nuclear accident. The main bone of contention in the Act had been section 17(b) he government has also sought to address the concerns raised by both international and domestic suppliers under Section 46 of the Act, which covers the remedies available against the operator.
id that India’s Civil Liability for Nuclear Damage (CLND) Act is compatible with the and hence there would be no change in the Act.
Deal to provide 6 AP1000 reaactors from Westinghouse
Issues
Cost higher – At Rs 21 in the first year
Untested technology
Direct rather than bidding
Westinghouse in loss
Economic
Trade worth 100 billion dollar 💵
India trade surplus
The trade involved is usually in differnt fields- India provides low cost goods, and USA cutting edge technologies-
unlike China- where imports hurt Indian industries
India’s rising and well appreciated Service sector – US and European markets-
IT, tourism
USA also major source of FDI, FII ( though indirectly, channeled via tax havens )
Better coordination would also allow to avoid spreading of International Depressions, and could also dilute its effect
Petrochemicals
India to import LNG from 2018
Indian firms to invest in American Shale
4 billion dollar in loans and investment
2 billion dollars for development of renewable energy
BIT
Bilateral investment treaty being negotiated
That would protect investment in each other countries
Concerns over
MFN
India’s model BIT does not given MFN
Taxation
State Investor dispute resolution
India’s model BIT says an investor must litigate in Indian courts for 5 years before pursuing arbitration abroad
IPR
Technology
Cyber
Need because
India, US both vulnerable to hacking
Service providing companies mostly in US
India needs to frequently take down websites to prevent riots, rumours
Space
Mangalyaan and NASA mars atmosphere mission (MAVERN) had collaboration
104 satellites – Bulk American
Spaceword Bound Program
India, US collaboration in “30 metre telescope” project
In Hawaii
world largest infrared telescope when completed
Other countries like China too participating
Currently, India’s largest is a 4m one
Meterology – NISAR
NASA ISRO Synthetic Aperture Radar
1st ever all weather high resolution radar measurements
Application
– Food security, freshwater availability
Disaster Prediction
Climate monitoring
Urban planning
That is all such things which a good Observatory satellite can do
Cooperation in gracitational waves
LIGO and INDIGO
USIIF ( US India Innovation Forum ) to be launched
Climate – US India Solar catalytic finance program
Climate
India- US anti in climate forums
Although, both haven’t signed Kyoto protocol
But- US, China agreed upon a climate treaty
Pressure on India now
Collaboation
US India clean energy finance initiative – 20 million $
US- India Catalytic Solar Finance Programme
PACE
Promoting Energy Awareness through Clean Energy
Corpus of Rs 50 crore
To finance innovative off-grid solutions
Social and political
Indian origin make up 1% of the US population
Education sector
Indian Students- Almost 1.4 lakh students– second largest after China
Better cooperation can make their education cheaper and will allow Indian students to come back earlier – Reverse Brain Drain
Rahul awasthi told about 85% going abroad earlier
IIT KANPUR – American Cooperation in the past has produced Institutes of Excellence in the past – Granting greater research collaborations – Greater use and familiarity woth world class research centre and technology
Plans now to support 1 more IIT
allowing US universities like Harvard to open branches will be a great step forward
US-India Higher Education Dialogue – Looks into greater educational linkage
Indian expatriates – political economical
Indian origin researches make up 3% of total USA
Tourism in each other countries
India’s entrance to Security council depends heavily on USA
Challenges
NEED TO OVERHAUL and make it CONTEMPORARY
What US wants and India doesn’t comply
IP rights
Trade regulations –
WTO
Special 301 list
India under Priority Watch List (PWL)
A country that refuses to comply within a year can face ” Appropriate Action” like punitive trade sanctions
Con
Can take action even if th eother country is WTO compliant
Like US pressure to remove Compulsory Licensig even though allowed under DDA of WTO
Nuclear logjam
CLiNDA Act, 2010
Elaborated Above
UPDATE –
A nuclear risk management fund, worth Rs 1,500 crore, will be created to cover operators and suppliers. This will be led by five Indian public-sector insurance firms, which will together contribute Rs 750 crore to the pool (the rest will be provided by the government).
Generic – FDI , tax
Climate
Elaboration Required
What India wants and US doesn’t comply
Climate from Indian perspective
H1B visas
H1B visa is a non immigration visa that allows US companies to employ foreign workers in specialty operations that require theoretical or technical expertise in specialised fields
Controversy over US efforts to limit the no of visas, pay additional fees per worker if more than half of the workers are on H1B visas
Way out – TFA in services
RELATED – Totalisation Agreement
Indian workers demanding for this
What is Totalization agreement?
means of protecting the benefit rights of workers who divide their working career between two or more countries.
It will allow Indian workers stationed in the US to bring back contributions they make to the US social security system on their return to India.
Or they can be exempted from contributing to US provident fund, provided they are cutting some of their salary for Indian PF
Indian temporary IT workers pay as much as $1 billion towards social security a year but don’t stay long enough to get the benefits.
The move will allow greater integration of labour force
The US has totalisation agreements with 25 countries, including the UK, Australia, Japan and South Korea.
India has a similar Social Security Agement with 18 countries – mostly Europeans
Distance from Pak
Re hyphenation policy of US in Obama administration
Defense framework agreement
US refused on India’s demand to jointly manufacture other high end techs
Indis mostly conducts defence trade on G2G basis, but in US private firms own most of the IP
Snooping
India has still not been allowed entry into NSG, Australia group, Wassenaar arrangement, MTCR
Wassenaar
Export control policy-1995
To check against flow of sensitive millitary equipments, softwares to non member countries
Idea- to protect against autocracies, and terrorists, but neutral countries like India also caught in the process
Not binding, but shapes the policy
Hence, India denied
Austrailia group also for controlling military exports
