Chapter 5. International Relations Notes for UPSC Mains

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The United States of America USA

    • Pro
    • 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


          • 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



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

Shift of Business

Infosys to hire 10k more American


American Firms would loose their competitiveness

Indian firms provides jobs to 4 lakh

Benefits – Creative disruption, Kunal Bahl, Reverse Brain Drain , Diversification , Value Addition

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



    • 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
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Seen as counter to US led “Asian Pivot

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 ?
        • 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
        • 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 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
      • Nuclear Liability Act 2010:
        • CLiNDA act, 2010
        • Civil liability for nuclear damage act
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to provide a civil liability for nuclear damage

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
        • How ? –
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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


    • 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
    • Elaboration Required

Why too closeness also bad

    • Russia distancing
      • Russia China 400 billion $ gas deal
      • Russia defence framework with Pak
    • China – Pakistan closer
      • 45 billion $ economic project CPEC (China Pak Economic Corridor )
      • Gwadar
    • US terms – capitalism
      • Against socialist principles
      • Is also counter to SSI
    • Islamic states and domestic politics
    • IMF WB
    • NAM
    • Elaboration required
Video on US-INDIA relationship