India-US: Trade and Strategy

India-US: Trade and Strategy

News: PM Narendra Modi is in the USA for an official state visit on the invitation of US President Joe Biden.

Background:
• The visit is significant and historic as PM Modi will address a joint meeting of Congress for a second time.
• The US is having its own economic crisis and a deal with India across sectors is critical for their own growth.
• There is possibility of an important defence deal which is likely to involve technological transfer.

How has economic engagement evolved in the recent years?
• At the heart of the Indo-US strategic partnership is deepening economic engagement and a resolve on both sides to elevate the bilateral relationship to a “global strategic partnership”
• The value of trade between the two countries has touched a record $191 billion, making the US India’s largest trading partner.
• American companies have invested around $60 billion in India in sectors ranging from manufacturing to telecommunications and consumer goods to aerospace. While the Indian companies have put in more than $40 billion in sectors such as IT, pharmaceuticals, and green energy, supporting.
• Air India announced the purchase of more than 200 Boeing aircraft — a historic deal that President Biden said would “support over one million American jobs across 44 states.

What are the strategic underpinnings?
Much of the relationship’s broader subtext is strategic, with both nations developing deeper relations keeping an eye on China and looking to secure diverse supply chains and reducing dependency on China.
• The flagbearer of the strategic engagement is the Quadrilateral Security Dialogue.
• The I2U2, a grouping of India, Israel, the US and the United Arab Emirates, is focused on joint investments and new initiatives in water, energy, transportation, space, health, and food security.
• Earlier, The NSA’s of two country launched a new US-India initiative on Critical and Emerging technologies (iCET).
• The two countries established a partnership to make the semiconductor supply chain more resilient through private sector cooperation. It is likely to give India a central role in the global electronics supply chain.

What is in there for Defence sector?
• The US is likely to share technology about GE-F414 fighter Jet engine with India which will power our indigenous Tejas Mk2 Light combat aircraft.
• Deal to acquire 31 MQ-9B armed drones. Also called as predator drones these are the world’s most advanced armed drones.

What are some concerns that need to be addressed?
Concerns
• Export controls on India (instituted after 1998 nuclear test)
• Revoking of India's benefits under Generalised system of Preferences programme
• India hasn't agreed to Trade pillar of its IPEF
• India is yet to find an entry into US's MineralsSecurity Partnership