An Extraordinary Momentum in India-US Relations

PM Modi greeting the crowd alongside President Joe Biden and First Lady Jill Biden from the White House during his state visit to Washington, D.C. / PIB

Prime Minister Narendra Modi’s visit to the US this week is expected to be a watershed in many ways.
 
For one, it marks almost a “quarter century of convergence” as US Deputy Secretary of State Richard Verma told the Hudson Institute think tank in Washington just a few days ago.
 
This visit will be unique on several counts – starting with the fact that this is the PM’s ninth visit to the US. This, in itself, is a record as it is the only country that the PM has visited so often since 2014. And this is also a testament to the importance accorded to India-US relations by the Modi government; it demonstrates the personal investment -- in time and effort—made by the PM to nurture this relationship, described by the US as one of the “most consequential” ones.  
 
The centerpiece of the visit is expected to be the QUAD summit in Delaware. The 2024 summit, which India was to host but which could not due to election cycles in India and the US, will be now hosted by US President Joe Biden at his hometown. Coming as it does after speculation that the QUAD – comprised of the US, India, Japan and Australia – is losing momentum, President Biden’s initiative of hosting the Summit signals continued commitment and support to the idea of the QUAD on the part of the US as it builds up a new security architecture in the Indo-Pacific.
 
In his speech to the Hudson Institute, Deputy Secretary Verma noted the progress in India-US relation since the year 2000 listing several key turning points as he saw it in the trajectory of ties.
 
The de-hyphenation of India and Pakistan by the Clinton Administration in the US and the 2008 civil nuclear deal were among the milestones that Verma listed to illustrate how differences were narrowed by the two countries who were seen  as being on opposite sides during the Cold War.
 
In particular, Verma noted the speed up of momentum that has taken place in recent years. I would say it is in the last decade that bilateral ties have acquired an extraordinary momentum.
 
The evolution of the relationship has followed the realization in India that the US is India’s partner of choice as Asia’s third largest economy readies to become the third largest economy in the world by the end of this decade and seeks to become a developed economy by 2047.
 
Ties have shed the “hesitations of history” as the PM himself put it – in his speech to the joint sitting of the US Congress in 2016. And proof of this was when then US President Barack Obama was invited as the chief guest of India’s Republic Day parade in 2015 – the first time ever that a US president graced such an occasion.
 
Now, the two countries are described as “natural partners” -- in fora like the QUAD, the G20, in the I2U2 (India, Israel, US, UAE grouping) and many others.
 
Democratic values and respect for the rule of law are common threads underpinning the relationship.
 
There is regular consultation and exchange of views on key global and regional issues; conversations between the US Secretary of State and the Indian foreign minister are regular, as are calls even between the principals - the US president and the PM.
 
On the bilateral side, there are more than 30 different dialogues between the two countries – one of key among them being the “2+2 Foreign and Defence Ministerial Dialogue.”  There is greater convergence in views – on building bilateral ties to the challenges facing the world -- between the US and India today than ever before.
 
There are of course differences – on geo-political matters and some issues relating to India’s neighbourhood. But the many dialogues at different levels, ministerial and official, have worked and are working to manage the differences and ensure they don’t become irritants.  
 
The willingness to listen and to engage, to look at the bigger picture has steadied the relationship to one of trust between the two countries. In his address to the Joint Session of the US Congress in June last year, PM Modi said he agreed with President Biden “that this is a defining partnership of this century. Because it serves a larger purpose. Democracy, demography and destiny give us that purpose.”
 
Adding ballast to the ties is the strong bilateral trade. In 2023, bilateral trade in goods crossed US$190 billion and the US became the largest foreign investor into India. During 2023-24, US was the third largest source of FDI into India with inflows of $ 4.99 billion accounting for almost 9% of total FDI equity inflows. Many Indian companies are investing in the US and adding value. According to a Confederation of Indian Industry study released in April 2023, 163 Indian companies invested over $40 billion in the US and created over 425,000 direct jobs. The top six industries that Indian companies have invested in, in the US, are IT and software services, business services, pharmaceuticals, metals, industrial equipment and communications.
 
An Investment Incentive Agreement between India’s Ministry of Finance and US International Development Finance Cooperation [DFC] was signed in 2022 to enable equity investment, co-insurance, grants, feasibility studies, and technical assistance. As of January 2024, DFC’s India portfolio stood at close to $ 4.0 billion across 100+ projects.
 
Energy is a new focus area of cooperation. At present, India imports more than 7.3% of its crude oil requirement from the US. India is the fourth largest international market for US crude oil and the fifth largest for US Liquefied Natural Gas. The US is also well placed to meet India’s market demand as it looks to transition to a gas-based economy. Under the India-US Climate and Clean Energy Partnership 2030, both countries are focusing on mobilizing finance and speeding clean energy deployment. Clean Hydrogen, R&D collaboration in solar cell manufacturing and storage are important areas where two countries are working jointly.
 
The evolved India-US relations is supported by many pillars – defence and security being one of the key ones.

Once the overflight of a US aircraft through Indian airspace was enough to stir suspicion; today one can recount with satisfaction of the instances of US military ships getting repaired in Indian ports.

India is buying drones from the US that keep a close watch on our borders and ISR (intelligence, surveillance and reconnaissance) is a major element of bilateral cooperation that spans the defence and space domains.

The US designating India as a "Major Defence Partner" in 2016 has paved the way for sharing of critical military equipment and technology.

The signing of the key foundational agreements -- the Logistics Exchange Memorandum of Agreement (LEMOA), Communications, Compatibility and Security Agreement (COMCASA), the Basic Exchange and Cooperation Agreement (BECA) and the Industrial Security Agreement - have allowed us to leverage them to keep our borders are safe.

An important ingredient that has helped the relationship attain the heights it has, has been the Indian diaspora. Last counted, there were about 4.2 million Indian Americans or people of Indian origin residing in the US. It is one of the most successful immigrant communities in the US; the members of the community have made a name for themselves in areas like business, high tech industries and politics. Many of them are part of the current administration and several are members of the US Congress. They have acted as a catalyst in cementing closer ties between India and the US.
 
Every year, a large number of young Indians – students – choose the US as their destination for higher education, playing their part in sustaining the broader India-US relationship. And these numbers are showing a rise, year on year. Most Indian students in the US are pursuing graduate programs. Indian students contributed approximately US $ 7.70 billion to the US economy in the year 2020. At present, there are over 200,000 Indian students in the US, mostly in STEM areas. They provide a steady stream of talent, contributing to cutting-edge research and technology development.
 
Having accomplished so much and relations evolving to encompass multiple realms, the logical question is what is the future trajectory of ties going to look like? What is the next level?
 
Deputy Secretary Verma listed science and technology as a key area where India and the US can frame new ties that will set ties on a higher plane. And I am in agreement with that assessment.
 
With AI, emerging technologies and innovation being the current buzzwords, India and the US are joining hands in these areas for common good. And there is major complementarity at play here because the US has the technology and resources and India has the ability and the talent pool to step forward and meet the US requirement for partnership. A case in point is the iCET (initiative on Critical and Emerging Technology) partnership. It was launched in January last year and has already yielded results. During US National Security Advisor Jake Sullivan’s visit to New Delhi earlier this year, the two countries took stock of the India-US roadmap that was announced last year to drive cooperation in seven critical areas including AI and semiconductors.
 
That the US is looking at India as a partner in this area shows Washington is acting on its “friend shoring” concept. It also indicates that the US sees India as a trustworthy and responsible partner for developing such critical technologies.
 
Given the strong talent pool of Indians in the field of S & T and the US being home to cutting edge technologies, India and the US have the wherewithal to create technologies for tomorrow for global good. Indian and Americans institutions can form partnerships and joint ventures to develop AI technologies for information and communication. Quantum computing is another area where Indian and US firms where joint ventures could create new products and applications for use in business and for societal good.
 
Some of the new areas that provide room to catapult strategic ties to the next level include Space Economy. It is an area that is relatively unexplored but has immense transformative potential. India and the US could join hands to build the next generation launch vehicles and satellites, create new space applications and work together on speeding up space situational awareness. Joint projects between Indian and US scientists and space agencies is another idea that could be worked upon.

India has recently allowed private sector participation in the space sector that was previously dominated by government entities. This was aimed at spurring innovation. US companies could explore possibilities of collaboration with the Indian partners to boost innovation beneficial for both economies. Indian companies have successfully leveraged US capital to become successful UNICORNS. At present India is home to the third largest pool of UNICORNS in the world. US companies also are increasingly investing in R&D in India. This can be scaled up with greater emphasis on joint research and development of new technologies.
 
Defence is too important an area not to be mentioned here. It is one of the mainstays of the strategic partnership. During his visit to the US last month, Defence Minister Rajnath Singh and US Defence Secretary Lloyd Austin oversaw the signing of two pacts including the Security of Supplies Arrangement (SOSA). This pact ensures that the United States and India will provide each other with reciprocal priority support for goods and services essential to national defence. This arrangement is designed to ensure that both nations can swiftly secure necessary industrial resources from one another in the event of unforeseen supply chain disruptions, thereby enhancing their national security capabilities.

India is the 18th SOSA partner of the US – the others being Australia, Canada, Denmark, Estonia, Finland, Israel, Italy, Japan, Latvia, Lithuania, the Netherlands, Norway, the Republic of Korea, Singapore, Spain, Sweden, and the UK. The US has agreed to speed up the delivery of F404-IN20 engines that will power the country’s Tejas Mk1A aircraft. Last year to General Electric Co.and Hindustan Aeronautics Limited to develop the GE F414-INS6 jet engine in collaboration with India.
 
According to Ely Ratner, Assistant Secretary of Defense for Indo-Pacific Security Affairs: “A stronger India that can defend its own interests, defend its sovereignty, is good for the United States.” “A stronger India that can contribute to regional security out of U.S. co-production, co-development with India — there is an aspiration to see India as an exporter of security in the region. That's good for the United States,” Ratner said at the Centre for New American Security think tank in Washington last year.
 
Healthcare is already an area where India and the US are collaborating. This could be scaled up to the next level with the focus on robotics which combined with AI-based assistive technologies, could find use for geriatric care. India’s traditional expertise in nursing could help address the need to care for aging populations the world over. AI applied to traditional medical pharmacopeias and traditional medical knowledge can open new doors to improve health outcomes. The private sector in both countries can look at advanced neurosciences, neural-computer interfaces and robotics to extend the frontiers of medical care.
 
Then there are projects in 5G, artificial intelligence, blockchain, and cyber security that Indian and US companies could work together on to build the next generation products for use in the US and Indian markets, as well as those in third countries.
 
As India looks to fulfill its climate commitments, US’ help in setting up small modular reactors would be useful indeed. The US has pioneered the technology to repurpose coal-fired plants into clean energy generators by replacing the fossil plant’s coal boiler with the SMR’s nuclear powered steam supply system.
 
Given India’s reliance on coal, this is technology that India could well use. India has launched a massive program to construct indigenously designed nuclear reactors and small modular reactors (SMRs) to provide “distributed base load generation.” Unlike a large nuclear power plant which needs to be situated near large bodies of water, an SMR plant can be located anywhere including in water scarce areas.
 
Besides access to SMR technology, the US could also explore the option of co-producing SMR plants in the US and in India. A grant or soft loan of $10 billion could help popularize the use of SMRs in India.
 
Staying on the subject of climate change, Green Hydrogen is critical for replacing fossil fuels. This is an area where the QUAD can work together as each partner brings unique strengths with respect to development of the Green Hydrogen ecosystem. While some countries have availability of land (like Australia), others like India have the advantage of good renewable resources with an ecosystem to implement project in a cost optimized manner. Such a move on the part of the US would help quicken the transition to from fossil fuels to Green Hydrogen.
 
India could do with US help in technology and finance for clean sources of fuel as it embarks on a definite transition plan to reduce emissions. The plan involves an increased proportion of renewable energy coming from hydrogen and ethanol with huge opportunities for EV and battery storage. This is an area ripe for collaboration given that India is such a huge market.
 
The above areas are but a few that India and the US can look to partner each other as we move into towards the middle of the 21st century.
 
After decades of estrangement during the Cold War, the two countries have built a solid edifice on which the bilateral relationship rests today. The challenges and threats that confront us today have only made both countries more determined to strengthen the partnership for a better tomorrow. Relations have acquired that critical mass which will safeguard against any breakdown. And with trust quotient high between the two governments and the people of the two countries, India-US ties are poised to scale greater heights in the future.

 

The author is a former Foreign Secretary of India and Ambassador to USA.

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of New India Abroad)