By Subrata Majumder
The upcoming visit of Prime Minister Narendra Modi to USA has drawn several speculations and apprehensions, given President Donald Trump’s challenge for a vertical change in the long-held pillars of US foreign policy. Trump’s overture for overturning USA’s role in global diplomacy, shifting to inward diplomacy, castigating globalization the Davos way and sputter America First to rebuilt USA by Americans are some of the new threats of Trump administration. Against this backdrop, Modi’s visit – advanced by several months (earlier expected at the end of the year) – pitched for hard challenges to Modi to give a new shape to India-US relation, built during the three years of Obama administration.
Trump will focus on its own term to build the new paradigm of India-US relation. Bilaterally, the focusses will be lowering of trade deficit, more defence trade deals and more job creations for Americans who lost the opportunities by way of low cost India IT skilled immigrants. In the global role, focusses will be on counter-terrorism and review of Afghan policy. Pakistan will significantly figure in the perspectives of Kashmir and China-Pakistan diplomacy in fructifying CPEC (China–Pakistan–Economic Corridor) – the core project of Chinese OBOR ( One Belt One Road) initiative.
Modi’s endeavor will be to stem benefits from the upturn in the relations during the three years under Obama administration and make the deal on Trump’s recourse to America First. Last three years witnessed a major leap in mutual trade between India and US,from US$97 billion in 2013 to US$115 billion in 2016. US investors lauded Modi ‘s Make in India and Ease of Doing business to roll out the red carpet to woo foreign investors. The India-US Bilateral Investment Treaty gained momentum since last year. Breakthrough was also made in settling huge backlog of transfer pricing disputes. Over 100 transfer pricing disputes were resolved within one year by the end of 2015
There are three challenges for Modi to perk up the relation under Trump administration. First, will Trump replicate Obama-Modi partnership? Second, will India-US economic relation be hit by Trump’s inward growth policy?. And third, will India lose USA’s India Pivot initiative, which helped it to stretch Modi’s Act Asia policy?
So far, Trump and Modi waded in comfortable zone despite Trump’s mercurial temperament. Irrespective of Modi’s several successes in global strategies with Obama, making India pivot for USA’s South East and Eat Asia policy, Trump–the staunch adversary to Obama foreign policy – acknowledged Modi’s good leadership.
Trump congratulated Modi for his success in Uttar Pradesh election and supported his economic reform agenda. He reiterated his interest to work closely with Modi. This overtone will likely inspire Modi to negotiate and edge out the small bickering and push forward the three years’ cordial relation built up during the Obama administration,
The Trump administration indicated that it was more interested in negotiating bilateral trade and investment relations. His abandoning of US membership with TPP ensures his penchant for bilateral negotiations for trade and investment with India. The move insulates a great part of India’s export, particularly textiles, apprehended to be on the downturn trend due to TPP. Textile is one the biggest items of Indian export basket and USA accounted for 40 percent of India’s export of textiles.
Trump’s stress on bilateral negotiations will prove congenial to India – USA Strategic & Commercial Dialogue ( S&CD), which was established during the Obama administration. The spirit of the Dialogue was to accelerate India-US priorities to create a sustainable growth for the two economies, create more job opportunities and improve the business and investment climate. S&CD engagement covers periodical discussions between CEOs of India and USA.
S&CD can act as an important turf for finalising the Bilateral Investment Treaty under Trump administration. It will provide safeguards to US investors in India.
Some analysts say China is the pivot to India-USA relations. India’s recent China diplomacy to scuttle China’s ambition to be global power will prove a boon to Modi to negotiate for further acceleration of India-US relations. India’s resistance to China defying of UNCLOS ruling in South China Sea over China’s sovereignty and call for all parties to respect the ruling and New Delhi’s absence in OBOR Forum as a protest against the nixing of India’s sovereignty by CPEC project will likely placate Trump’s administration to have fruitful negotiations.
USA is one of the biggest economic partners of India. It is the second biggest trading partner of India, accounting for 9.7 per cent of the country’s global trade in 2015-16. It is also the biggest export destination for India, accounting for 15.4 per cent of India’s global exports in 2015-16. In addition, USA is one of the biggest foreign investors in India. In 2015-16, USA accounted for 10.5 percent of total FDI flows in India.
Besides having a strong economic relation, USA is an important strategic partner country for India in energy, education and health sectors. There are 50 bilateral dialogue mechanisms between the two governments.
Historically, Democrats were closer to India. But, there was no constructive deal or agreement with USA during Democratic regime. Instead, important deals were entered into during the Republican regime. India–Civil Nuclear deal is case in point.
Trump’s praise for Hindu and India and his strong words against ‘radical Islamic’ entities will raise Modi’s confidence in wining Trump’s heart. Trump said (in an election campaign), “ We love the Hindus, we love India”. On Pakistan, he said (in a radio show), “ Pakistan, probably the most dangerous country—the only country that can check Pakistan is India”. These statements will likely give a sense of respite to Modi despite the fact that Republicans were known close to Pakistan. He said, “We will defeat radical Islamic terrorism, just as we defeated every threat we have faced in every age before”. Trump’s deliverances are in stark contrast to Barak Obama’s, who took middle path to settle the Kashmir issue.
India-USA relations have reached a bipartisan level. This insulates India from the changes in the ruling government in USA. Whether it is Democrat or Republican, India is immune to US leadership. In this perspective, Trump’s inward looking and America First stands are unlikely to shadow India-USA relations. (IPA Service)
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