India-US Relations

India-US Relations

India-US Relations

This article deals with ‘India-US Relations.’ This is part of our series on ‘International Relations’ which is an important pillar of the GS-2 syllabus. For more articles, you can click here.


History of India-US relations

Before  Independence

  • In the beginning, due to British control over India, the communication between India and the US at an independent level was impossible. Although Indians in the USA started Ghadar Movement and raised voices for the independence of their motherland, they had to wait till World War 2 for the US to pressure Britain to give the right to self-determination to Indians. Later, US President Roosevelt argued that the Atlantic Charter, which advocated the right to self-determination, applies to India as well, in contrast to Churchill’s view that the right to self-determination applies exclusively for Nazi areas won in the war. 
  • Apart from that, the relationship between the people of India and the USA was developing, corroborated by the fact that
    1. A large number of American Missionaries were active in India. 
    2. Rabindranath Tagore, Lala Lajpat Rai and Swami Vivekananda visited the USA.  
    3. Ambedkar studied at Columbia University from 1912-16. 

Initial Years

  • Soon after independence, India developed amicable relations with the USA. The Indian leaders acknowledged the positive role played by America in exerting pressure on the British Government to expedite the grant of independence to India. The democratic ideals of America fascinated the Indian leaders. 
  • The US also made available to India vast quantities of food grains to tide over the food shortage problem through the PL-480  Scheme.
  • IIT Kanpur was established with US help. 
  • Norman Borlaug & the Ford Foundation of the USA played an important role in introducing the Green Revolution in India.  
  • During the Indo-China conflict of 1962, the US-supported India and even decided to supply military equipment and weapons.  

Cold War Period

  • The emergence of free India coincided with the emergence of the United States and the Soviet Union as two Super Powers. With faith in their respective ideologies and way of life, both these powers looked suspiciously towards each other and set up military blocs like NATO, CENTO, SEATO, ANZUS, and the Warsaw Pact to meet the possible threat from the other. When India gained independence, there was the option of joining either of the two power blocs. However, India decided to keep away from these blocs and follow an independent foreign policy.
  • A major shift occurred when Indira Gandhi became the Prime Minister in January 1966. Her first foreign policy move was to visit the US in March 1966. She was received warmly by President Johnson. In response, India softened its stand on the Vietnam war and devalued its currency (rupee). But gradually, strains started to develop due to America’s consistent support to Pakistan on the Kashmir issue, its decision to provide shelter to the Naga rebel leader Phizo in the US in 1967 and US arms supplies to Pakistan. In return, India supported the Arabs in West Asia in their war against Israel and hardened its stance on Vietnam.
  • The relationship became more bitter during the war of 1971. Pakistan received massive military supplies from the US even before the Bangladesh crisis, including 100 tanks of M‐47 category, B‐57 bomber aircraft and other lethal weapons. Meanwhile, India signed the Indo‐Soviet Treaty of Friendship and Cooperation to counter the US-Pakistan axis. During the 1971 war, the US-supported Pakistan and dispatched the aircraft carrier  USS Enterprise to the Indian Ocean to help Pakistan in East Pakistan. 

End of Cold War

  • The Soviet Union collapsed in 1991. Like the rest of the world, India wasn’t prepared for this development. With the disintegration of the Soviet Union and the emergence of the US as the sole Super Power, India’s relations with the United States have undergone a significant shift.
  • After the disintegration of USSR, the closer cooperation and integration with the West became Russia’s top priority. As Russia and America moved closer, Russia neglected its traditional relations with long‐standing friends like India. India’s trade with Russia came down from 16% of its exports in 1989-90 to 9% in 1991-91. Russia also refused to supply cryogenic technology to India under US pressure.

Post-1990

  • India suffered from the Balance of Payment crisis due to the Persian Gulf War, which led to an exponential rise in the price of oil and the repatriation of Indian workers. IMF loan saved the Balance of Payment crisis, but it came with the condition of SAP. SAP (Structural Adjustment Plan) consisted of disinvestment, privatization, currency convertibility, and reducing tariff & subsidies in agriculture. The US government strongly supported India’s case for financial assistance from the institutions like the World Bank and IMF.  
  • The reasons behind the change in relations are
    1. Strategic Reason: The US is trying to contain hegemonic China in the Asia-Pacific region. India can prove a vital ally in this pursuit.
    2. Economic Reason: India’s 1.2 billion population can be an important market for US products.  

Issue 1: Indo – US Trade Issues

Indo - US Relations

Trade Imbalance

  • Trade between India and US is $ 146 billion (2019).
  • US is the largest Trade Partner of India, while India is the 9th largest trade partner of the USA. 
  • But Trade Balance is in India’s favour, with India having a current surplus account. To bridge this gap, India has started to buy the following from the USA
    • Gas and Crude Oil 
    • Commercial Aircrafts
    • Military hardware
  • Indo-US Trade is well below its potential. For example, South Korean Trade with the USA is 1.5 times that of India, although the South Korean GDP is 40% lesser than India.

CAATSA Issue

  • CAATSA, i.e. Countering American Adversaries through Trade Sanctions Act, is a US act that aims to counter the aggression by Iran, Russia and North Korea. According to the act’s provisions, the USA can impose sanctions on any country doing trade with these nations. 
  • It is problematic for India as
    1. Wrt Russia: India imports defence products like S-400, Kamov Helicopters etc. and has joint projects like Brahmos with Russia.
    2. Wrt Iran: India used to import vast amounts of Irani oil, which was impacted due to CAATSA. 

Generalized System of Preference (GSP) Issue

  • GSP was started in 1974. 
  • It provides opportunities to the world’s poorest and developing countries to use trade to climb out of poverty and grow.
  • India was getting the benefits of this scheme. But, under the Trump regime, the GSP of 94 products from India was removed by the USA. It impacted Indian exports to the USA.
  • In return, India imposed retaliatory tariffs on US imports like almonds, apples etc. 

India-US Solar Dispute

  • India launched National Solar Mission in 2011 to increase India’s solar electricity capacity to 100 GW. 
  • Under the scheme, the government offered financial support of ₹1 Crore / MW if the orders were placed with domestic (/Indian) manufacturers. 
  • US took the matter to WTO in 2013, alleging this to be violative of TRIMs. India lost the case in Dec 2017 and agreed to change rules and procedures. 
  • Present Issue: India says they have implemented the order, but the US disagrees. 

Digital companies

US complains that the Indian government’s policies to restrict companies from sending personal data of Indian citizens outside India act as a significant barrier to digital trade for US companies.


Intellectual property rights

  • US concerns include software piracy, film and music, and weak patent protection in India.
  • India amended the Patents act to recognize products rather than process patents to address these concerns.
  • The US has raised concerns about insufficient patent protections, restrictive standards for patents, and threats of compulsory licensing.

Dairy Industry Issue

  • US dairy products are banned in India on religious and cultural grounds. 
  • Reason: US dairy products are derived from cows that consume feed containing internal organs, blood and tissues of the animals of ruminant origin, while the cow in India is considered sacred and herbivore.
  • In 2015, the US proposed the permit entry of US dairy products with a ‘red dot’ (non-veg products). But India has not accepted the proposal. 

Harley Davidson Issue

  • The US demands duty cuts on bikes imported to India. 
  • In 2018 India reduced the import duty from 75% to 50%, but the US wants it to be zero. 

WTO disputes between India-US

India and US are fighting following disputes at Dispute Settlement Mechanism  under the WTO

  1. Poultry and poultry products from the US
  2. Countervailing duties on Indian steel products.
  3. The subsidy provided to Indian solar cells and modules under the provisions of the National Solar Mission
  4. Indian schemes to promote its exports, such as MEIS and SEIS.
  5. Renewable Energy Programs of the USA.
  6. US measures concerning non-immigrant visas
  7. The increased tariff on steel and aluminium. 

Issue 2: Defence Cooperation

#2.1 US foundational Defence Pacts

  • The US considers 4 defence pacts as the foundation of her defence cooperation. These include 
    1. General Security of Military Information Agreement (GSOMIA) – Signed in 2002.
    2. Logistics Support (LEMOA) – Signed in 2016.
    3. Communication (COMCASA) – Signed in 2018 .
    4. Basic Exchange & Cooperation Agreement (BECA) – Signed in Oct 2020. 
  • The USA has signed all of them with India. 
GSOMIA 
Signed in 2002 
COMCASA 
Signed in 2018 
LEMOA 
Signed in 2016 
BECA 
Signed in 2020

GSOMIA

  • GSOMIA = General Security of Military Information Agreement.
  • It was signed in 2002.
  • GSOMIA facilitates cooperation in intelligence sharing between the USA and the signatory.

LEMOA

  • LEMOA = Logistics Exchange Memorandum of Agreement (LEMOA).
  • India signed it in 2016. 
  • Under this agreement, US and Indian forces can access each other’s resources for logistical purposes. 

COMCASA   

  • COMCASA = Communication Compatibility & Security Agreement.
  • India signed it in 2018. 
  • Pentagon signs this agreement before transferring its sensitive communication and IT technology used in US planes and drones to any other country.

BECA

  • BECA = Basic Exchange and Cooperation Agreement.
  • India signed it in October 2020. 
  • With this, the US and India can share highly classified geospatial and satellite data.

Importance of foundational agreements

  • It signals the affirmation of the mutual trust between India and the USA.
  • Strengthen India’s conventional offensive and defensive capacity as India can access sensitive data and buy advanced US weapons to get an edge over its rivals, namely Pakistan and China. 
  • It will result in close cooperation between Indian and US armed forces, especially to contain Chinese expansionism. 
  • Apart from the military, these agreements will also help the US and Indian armed forces to cooperate in providing humanitarian assistance during disasters.

Issues with these foundational agreements

  • Russia Factor: After signing these agreements, the USA wants India to buy American weapons and move away from Russia. Close cooperation between India and Russia can expose its technology to Russians.
  • It imperils India’s policy of Strategic Autonomy by unduly binding India to the US systems and procedures.
  • More favorable to the US: These agreements are more favorable to the US. The provisions of these agreements have been formulated by the US policymakers giving precedence to the US interests.

#2.2 Weapon Trade

  • The USA has become the second-largest arms supplier to India. 
  • During Barack Obama’s term, the US recognised India as a “Major Defence Partner (becoming the only non-NATO member to get this tag). 
  • Later in 2018, India was moved to Strategic Trade Authorisation (STA)-1 list. It gives license-free access to almost 90% of dual-use technology to India. 

Buying Weapons

  • The US has become 2nd biggest armaments supplier to India.
  • India has bought or has signed deals to buy the following weapons.
Aeroplanes 1. Boeing C17 Globemaster military transport
2. C – 130 J Super Hercules
3. P8-I Poseidon Maritime Patrol  
UAV 1. India has bought the  Guardian Drones (naval & unarmed version of Predator UAVs)     
Helicopters 1. Romeo MH-60 Seahawk (it is the most advanced naval helicopter which can hunt submarines)
2. Chinook
3. Apache  
Howitzer 1. M-777 Ultralight Howitzer
C-17 Globemaster 
(Transport) 
Guardian 
(Reconnaissance) 
Super Hercules 
(Transport) 
civilspedia.com 
Chinook 
(Transport) 
P8-I Poseidon 
(Maritime Patrol) 
Apache 
(Attack)

#2.3 Military Exercises and Alliances

Malabar Exercise

  • Trilateral Naval Exercise between India, US and Japan (Note: Australia is not part of this). 

Quad

  • The ‘Quad’ consists of India, the United States, Japan and Australia
  • Main Aim: To secure Indo-Pacific.

#2.4 Other aspects

US Presence in the Indian Ocean

  • Diego Garcia in the Indian Ocean is the Military base of the US army.
  • India doesn’t like an influential nation in her footsteps as it challenges the Indian position of ‘net security provider’ in the Indian ocean.

Fight against terror

  • The US frequently helps India in its war against terror. E.g.:
    • US played the main role in listing Jaish-e-Mohammed leader Masood Azhar as an international terrorist by the UN 
    • US is also helping India to control Pakistani terrorism using FATF.

Issues in India-US defence relations

  • The difference in core goals of defence engagement: From the Indian perspective, the core goal of defence engagement with the US is that the US should assist the Indian defence industry in manufacturing technology in India. For the US, its defence diplomacy with India is to establish a long-term relationship that would allow both India and the US to jointly address contingencies in the region that may arise in the future. 
  • US equipment is costly. India wants to deal on the basis of fixed costs. On the other hand, suppliers favour’ life cycle costs’-based bidding asserting that they offer expensive equipment, but the costs come down when it comes to contracts for long-term maintenance.

Issue 3: Nuclear Diplomacy in the US- India relations 

Timeline of Indo-US Nuclear Deal
  • 1974: India experimented with the Nuclear Explosion named Pokharan-1. The USA opposed it. 
  • 1978: Nuclear Non-Proliferation Treaty was signed under the leadership of the USA, in which India was not accepted as a nuclear state. India resented NPT, terming it as Nuclear Apartheid. 
  • 1998: Nuclear Test (Pokharan-2) was conducted, making India a nuclear power. In retaliation, the US imposed economic sanctions on India.  
  • 2000: Clinton’s visit to India marked the beginning of a new era, followed by Jaswant – Talbot Dialogue.
  • 2008: This process culminated in the Civil Nuclear Deal signed in 2008. 

Bush – Manmohan Civil Nuclear Deal

  • It was signed in 2008.
  • The main provisions of the agreement were
    1. India agreed to the separation of civil & military nuclear programs.
    2. India allowed inspection of the civilian program.
    3. India agreed to refrain from transferring nuclear enrichment and reprocessing technologies to states that do not have them.
    4. India agreed to adhere to the Missile Technology Control Regime and Nuclear Suppliers Group.
    5. In return, the US offered nuclear fuel & technology. The US also ensured supplies for the civilian program from the 44‐nation Nuclear Suppliers Group (NSG).

Issue 4: Indian diaspora in USA and H1-B Issue

  • India has a 3-million-plus strong diaspora in the USA, accounting for about 1% of the total population. It is the second-largest Asian community in the country.
  • Indian diaspora includes many professionals, business entrepreneurs and educationalists with increasing influence in society.  
  • Examples include
    1. Kamala Harris: US Vice-President
    2. Satya Nadella: Microsoft Head
    3. Sundar Pichai: Google Head
    4. Nikki Hellay: Seasoned politician who has held important positions like US Ambassador to UN.  
  • The Indian community has assimilated into their adopted country and is a catalyst to forge closer and stronger ties between India and the USA.

H1-B Visa Issue

About H1-B Visa

  • H1- B visa is a non-immigrant visa given by the US to skilled workers (technical or theoretical skill in the specialized field) for a specific period of time.
  • It was started in 1952 to attract quality workers from other countries.
  • Lottery System: US administration grants H1-B visas to 85,000 workers annually, of which 20,000 are reserved for those who have one of their Masters in the US. The process to select is completely random based on the Lottery System. 

H1-B Visa
H1-B Visa issue

Changes introduced by Trump

Trump introduced some changes in the H1-B visa regime to make companies hire US workers and give visas to highly expert workers. These changes were 

  1. The minimum salary to be considered eligible for an H1-B visa increased from $60,000 to $130,000 per annum.
  2. Spouse of H1-B visa holder can’t work in the USA.
  3. Preference to be given to students with US education for H1-B visas. 

These changes impact Indian interests because out of the 85,000 H1-B visas, approximately 70% are Indians. 


Other Cooperation

  • Space Cooperation: The two sides have had a long history of cooperation in the Civil Space arena. NASA and ISRO are cooperating on various projects. India also helps multiple US companies to launch their satellites at cheap rates. 


Other Irritants

  • Question of Human Rights: There have been profound differences between India and America on human rights. Various NGOs, including Amnesty International and Asia Watch, have raised voices against human rights violations in India and draconian acts like TADA. 
  • Religious Freedom: Various US Congress committees and NGOs such as Freedom House frequently comment on the status of religious freedom in India, which impinges Indian sovereignty and tarnishes the image of India in international forums.
  • Afghan Question: USA and India were not on the same page on the Afghan question. India was not in favour of handing over Afghanistan to the Taliban as it endangers security in India.

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