Major areas of cooperation
A "Strategic Dialogue" was established in July 2009 during the visit of US
Secretary of State Hillary Clinton to India with the objective of strengthening
bilateral cooperation across diverse sectors. The first round of the Strategic
Dialogue was held in Washington DC in June 2010, followed by the second
round in New Delhi in July 2011. The Minister of External Affairs led the Indian
delegation for the Dialogue; US Secretary of State led the Dialogue from the
Trade and Economic Relations
The trade and economic partnership between the US and India has been a key component of the bilateral relationship. A new US Financial and Economic Partnership to strengthen bilateral engagement on macroeconomic, financial, and investment-related issues were launched in New Delhi in April 2010 by the Finance Minister Mr. Pranab Mukherjee and US Treasury Secretary Timothy Geithner. The Agreement on Framework for Cooperation on Trade and Investment was signed during the visit of Minister for Commerce
& Industry, Mr. Anand Sharma to USA in March 2010.
Bilateral trade has diversified and encompasses a wide range of products, services and technology. An expanding & vibrant architecture of dialogue on commercial, economic and technology related issues has given a fillip to this cooperation. India-US total merchandise trade was US $ 48.75 billion in 2010.
The two way services trade was US $ 38 billion in 2008. The two governments plan to resume technical-level negotiations on a bilateral investment treaty. A totalization agreement has also been under discussion for some time.
US is the third largest source of foreign direct investments into India. The cumulative FDI inflows from the US from April 2000 to March 2011 amounted to about $ 9.44 billion constituting nearly 7.28 percent of the total FDI into India. During the financial year 2010-11 (from April 2010 to March 2011), the
FDI inflows from US into India were $ 1.17 billion contributing 7% of the total FDI inflow during this period. In recent years, growing Indian investments into the US, estimated by independent studies to be around US$ 26.5 billion between 2004-2009, has been a novel feature of bilateral ties.
Clean Energy and Climate Change Initiative
An Agreement for Cooperation on Joint Clean Energy Research and Development Center (JCERDC) was signed between India and US in November 2010. The Center aims to help development of critical technologies for renewable energy, energy efficiency, clean coal, including carbon capture and storage, and other areas of clean energy. It has been announced that the two Governments would provide US$ 5 million each annually for next five years towards their share of research cost under the Agreement while an equivalent cost will be borne by the Consortia which will carry out the research. The first joint Funding Opportunity Announcement for the JCERDC was made in May 2011 seeking research projects on consortia mode under PPP model of funding in the initial priority areas of solar energy; second generation biofuels; and energy efficiency of buildings. In response to the first call for proposals, 21 joint proposals from different consortia have been received. Maiden awards are expected to be announced by end 2011.
Cooperation in counter terrorism has seen considerable progress over the last few years. A new India-US Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing and capacity building. Separately functional level cooperation on counter-terrorism is being pursued through a Joint Working Group (JWG) on Counter Terrorism that was established in January 2000. The 12th meeting of the JWG was held in New Delhi in March 2011. A new Homeland Security Dialogue was also announced during President Obama’s visit to India in November 2010 to further deepen operational cooperation, counter-terrorism technology transfers and capacity building. The US Secretary of Homeland Security Janet Napolitano visited India in May 2011 to hold the first round of this dialogue with Home Minister Mr. P. Chidambaram.
The ‘New Framework for India-US Defence Relationship’ was signed between the two sides on June 28, 2005. Both sides have agreed to pursue mutually beneficial defence cooperation through the existing security dialogue, service level exchanges, defence exercises and defence trade and technology transfer and collaboration. India’s defence orders from U.S. companies have reached a cumulative value of over USD 8.0 billion in the last decade.
Defense Secretary Robert Gates visited India in January 2009. Raksha Mantri Shri A.K. Antony visited Washington in September 2010. Apart from the Ministerial level exchange, there are exchanges between each of the Services, with regular joint exercises.
Civil Nuclear Initiative
The bilateral civil nuclear cooperation agreement was finalized in July 2007 and signed in October 2008 by EAM and then Secretary of State Condoleezza Rice. During the visit of President Obama to India in November 2010, the two Governments announced completion of all steps to begin implementation of the Civil Nuclear Agreement. Indian and US companies are now working towards early commencement of commercial cooperation in this area.
This initiative has been strengthened by the regular meeting of the Indo-US Civil Nuclear Working Group (CNWG). The 4th joint CNWG Meeting was held at Oak Ridge National Laboratory in July 2011. At the sideline of the recently held 2nd meeting of the India-US Strategic Dialogue, Department of Atomic Energy and US Department of Energy signed an Implementing Agreement on ‘Discovery Science’ that provides the framework for cooperation in accelerator and particle detector research and development with Fermi National Accelerator Laboratory, Stanford Linear Accelerator Laboratory, Thomas Jefferson National Accelerator Facility and Brookhaven National Laboratory.
The two sides have had long history of cooperation in Civil Space arena. A bilateral Joint Working Group on Civil Space Cooperation has been established as a forum for discussions on joint activities in space. The Group had its 3rd meet at Bangalore from 13-14 July 2011. Both the sides have agreed to continue and expand their joint activities in the area of civil space cooperation. Major areas include:
(i) exchange of scientists; (ii) OCM2,INSAT3D collaboration;
(iii) future mission definition workshops;
(v) Carbon /ecosystem monitoring and modelling;
(vi) feasibility of collaboration in radio occultation: (vii) CSLA:
(viii) international space station;
(ix) global navigation satellite systems; (x) formation flying;
(xi) space exploration cooperation;
(xii) space debris mediation.
India-US Education Dialogue was announced by the two Governments in July 2009 during the visit of US Secretary of State to India. Both Governments have launched the “Singh-Obama 21st Century Knowledge Initiative” in November 2009 with funding of US$ 5 million from both sides to increase university linkages and junior faculty development exchanges between US and Indian universities. The first joint request for proposals under the initiative has been published recently. India and the US have signed a new bilateral Fulbright Agreement that supersedes the Fulbright Agreement operating since 1950 with US funding. Under the Agreement, the Government of India and the United States will implement the scholarship programme as full partners. The amount has been increased to US $7.06 million (from US $ 5 million) from the financial year 2010-11. In the 2009/10 academic year, more than 100,000 students from India were studying in the US to further boost our cooperation in this field, the First India-US Higher Education Summit is proposed to be held in Washington D.C. in October
Cooperation in Science & Technology
India and the US signed a Science & Technology Agreement in October 2005 that encourages joint research and training, and the establishment of public private partnerships. As a component of this agreement, the first meeting of the Joint Commission was held on 24-25 June 2010 in Washington D.C. A $30 million Science & Technology Endowment for jointly promoting science & technology research, development and innovation was established in July 2009. The first call inviting Letter of Intent under the two priority areas namely, ‘Healthy Individual’ and ‘Empowering Citizens’ was made in May 2011. Out of 381 Letter of Intents received in response, 32 have been shortlisted for inviting full project proposals. The Indo-US cooperation in S&T is catalyzed by the bilateral Science and Technology Forum, which has enabled more than 10,000 scientists, technologists and students from the US and India to interact, established 24 virtual joint research centers and organized more than 30 training programmes and numerous bilateral conferences. Collaboration between the Ministry of Earth Sciences and NOAA has been strengthened by signing of three Implementation Arrangements for collaboration in October 2010 on Tropical Cyclone Research; Tsunami Science - detection, analysis, modeling & forecasting; and INSAT 3D satellite data applications. In November 2010, a ‘Monsoon Desk’ has been established in NOAA for enhancing monsoon forecasting. This will also help in building India’s capacity in developing and using a coupled ocean-atmosphere modeling system for strengthening the “National Monsoon Mission”.
Cooperation in the Health Sector
In July 2009, a 'Health Dialogue' was established between the two countries. To date, four working groups have been constituted viz. maternal and child health, non-communicable diseases, infectious diseases and health system strengthening. A Global Disease Detection - India Centre has been established vide a MoU between US Centers for Disease Control & Prevention and National Center for Disease Control. Recently, Department of Biotechnology and the National Institutes of Health have launched new bilateral cooperation on Low Cost Health Diagnostic Tools; Brain Research Collaborative Partnership on neuroscience; and International Cancer Genome Consortium.
There is considerable interest in Indian music, dance, art and literature in the
United States. The Indian American community is also active in promoting
Indian culture. In March 2011, the Kennedy Centre in collaboration with Indian
Council for Cultural Relations and the Embassy hosted a three-week long mega festival “maximum India”, that showcased the work and talents of renowned Indian artists, including Dr. L. Subramaniam, Ustad Zakir Hussain, Malavika Sarukkai, Naseeruddin Shah, Shabana Azmi and several others. The Embassy also regularly hosts cultural events, highlighting the work of Indian and Indian-American authors and artists. The Consulates too are active in organizing Indian cultural events, including in collaboration with local cultural institutions.
PTI and IANS have their representatives in Washington DC. Several leading dailies [Times of India, Telegraph, Economic Times, The Hindu, Hindustan Times have correspondents based in Washington DC. The Pioneer, Indian Express and New Indian Express, The Bengal Post, Outlook and The Week are also represented in US. The TV channels represented in the US are AAJ TAK, Headlines Today, Times Now, CNN-IBN and ZEE TV [through a tie-up with VOA. NDTV has their full-time correspondent based in New York.
People to people ties
As per the 2010 census figures of the United States, the Indian American community has grown to 2.84 million and is the second largest Asian community in the country. The Indian American community, which includes a large number of professionals, educationists and entrepreneurs, has been increasing its sphere of influence and gaining in political strength. With two Indian Americans occupying high level posts of Governor, a Congressman and several Representatives of State Legislatures and in the Federal Administration, the Community has thus assimilated into their adopted country and acting as a catalyst to forge closer and stronger ties between India and USA.
U.S.-India Relationship on the Rocks?
Gone are the Cold War days in which India saw the United States with a mix of suspicion and hostility through the prism of its alliance with Pakistan. During the last decade, the United States and India have established an unprecedented partnership, including a historic nuclear cooperation deal in 2008. This positive trend culminated in President Obama’s visit last year to Mumbai and New Delhi, during which he announced American support for India’s ambition to a permanent seat in the United Nations Security Council.
It was good while it lasted. But the United States needs to move on and recognize that India’s commitment to strategic autonomy is a fundamental constraint to further improvement in bilateral relations. New Delhi wants to take it slowly because it is wary of becoming another Japan, a client state. It is this grand concern with self-reliance—and not technical or other factors—that led to India’s surprising decision last month to exclude two American contenders, Lockheed and Boeing, from an $11 billion contract for one hundred and twenty-six fourth-generation fighter jets—India’s biggest defense purchase ever.
New Delhi’s preference for two European jets (France’s Rafale and the Euro fighter Typhoon), while excluding Swedish and Russian contenders along with the American F16 and F/A18, came as a rude shock to those who had banked on surging U.S. India defense and security relations. According to the Stockholm International Peace Research Institute, India purchased $223 million worth in military equipments from the United States in the last five years—twice as much as in the preceding twenty years. Both countries also held over sixty joint exercises and military exchanges since 2000 and set up a new counterterrorism dialogue that included unprecedented levels of intelligence sharing after the 2008 terrorist attacks on Mumbai.
Defense analysts jumped in immediately to offer possible explanations for the American defeat. Some underlined the fighters’ different performance during high-altitude tests in the Himalayas, along with other technical factors, including speed and radar systems, which may have given the European fighters an advantage. Others privilege political reasons—including pockets of anti-Americanism in the Indian air force—as well as a government plagued by corruption scandals, which may have limited its capacity to make a decision on more than purely objective criteria. Another explanation highlights the controversies involving the quality of previous purchases from the United States, especially that of the USS Trenton, a 1971 amphibious transport dock on which an explosion killed five Indian navy personnel in 2008.
While each of these factors may have played a role, they ignore the most fundamental reason: India’s concern for strategic autonomy in the event of another war with Pakistan and its attempt to maintain a balance in its lineup of military suppliers.
Washington may well have promised New Delhi the world, but in the end India will always fear that its actual combat capacity in such critical moments could be severely affected by relying exclusively on American technology, supplies and support. This sensitivity and mistrust is aggravated by the fact that the United States is also the major supplier to the Pakistani air force, having in recent years transferred thirty-two F-16 variants and several air-to-air missiles and P3C Orion surveillance aircrafts to Islamabad.
New Delhi also justifiably sees Washington as overly stringent on end-use monitoring; Washington would never have allowed these planes to be fitted with nuclear warheads and play a role in India’s nuclear deterrent. In contrast, reports indicate that the Euro fighter offered access to significantly more advanced technology as well as the possibility of assembly in India. This indicates to what extent India remains committed to self-reliance, not only in terms of production, but also operability—the nightmare of 1965, when the United Stated cut off Indian access to crucial military supplies at the height of another Indo-Pakistani crisis, is still fresh in the minds of many Indian strategists.
The decision should therefore be seen as one privileging diversification, diffusing the risk of excessive reliance and dependence on a single partner. American experts implicitly acknowledged this Indian concern by speculating in recent months that India might split the order among two or three different suppliers, perhaps an American, a European and a Russian one. But they ignored the specific cyclical way India diversifies, rotating among different suppliers. In recent years, Russia, the United States, Israel and even Brazil were able to secure important contracts from the Indian air force, but (excepting Britain) European countries have remained largely absent from its acquisitions basket. From this perspective, the Euro fighter Typhoon is particularly attractive as it is developed by a consortium including not only habitués Britain and Germany but also newcomers Spain and Italy.
One failed deal does not mean a winter for Indo-U.S. relations. Both countries have come a long way since the end of the Cold War, and given China’s rise, the United States is surely posited to become one of India’s main strategic partners. Thus, instead of lamenting, soul-searching or—on the opposite extreme—demonizing New Delhi for decisions that are unfavorable to American interests, Washington needs to give the relationship time to mature and recognize that India’s profound concern with securing its strategic autonomy and self-reliance will continue to play a constraining role.