Introduction – Trade Partnership
Bilateral trade is about 3% of U.S. world trade.It is more consequential for India; in 2019, the UnitedStates was India’s largest goods export market (17% share),and third-largest goods import supplier (7%), after China(14%) and the European Union (9%). U.S.-India foreigndirect investment (FDI) is limited, but growing. Defensesales also are significant in bilateral trade. Civilian nuclearcommerce, stalled for years over differences on liabilityprotections, has produced major potential U.S. supplycontracts, dating to the second Obama Administration.
After several years with the world’s fastest economicgrowth rate (above 7%), India grew more slowly in 2019,and was hit hard economically by Coronavirus Disease2019 (COVID-19). The Reserve Bank of India revisedupward its estimate for India’s growth rate from -9.5% to -7.5% for 2020/2021, subject, in part, to future COVID-19responses. Amid the COVID-19 pandemic, India hasstepped up efforts to attract supply chains from China, withsome encouragement from the US Administration.
Overview of Indo – US Relationship
Shared democratic values and growing convergence on bilateral,regional, and global issues have provided a strong base for India-U.S.relations, which have now evolved into a strategic partnership of globalsignificance. The relationship enjoys strong bipartisan and popular support inboth countries. Mutual visits at the leadership-level are anintegral element of our engagement with the U.S. The outcomes generated bythese visits have been instrumental in further strengthening and developingthe multifaceted ties between the two countries.
The US will remain committed to further strengthen the US-India partnership, given our democratic foundations and mutual interest in rebuilding the global economy following COVID-19, diversifying global supply chains and ensuring the Indo-Pacific region remains free and open. India and the US signed the Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation (BECA), with which the two countries have inked all the all four foundational agreements to bolster defence ties.
Defence relationship has emerged as a majorpillar of India-U.S. Strategic Partnership with intensification in defencetrade, joint exercises, personnel exchanges, and cooperation inmaritime security and counter-piracy.
Important bilateral exercises are:Yudh Abhyas, Vajra Prahar, and Tiger Triumph. Aggregate worth ofdefence-related acquisitions from the U.S. is more than US$ 21 billion.In June 2016, the U.S. recognised India as a “Major Defence Partner”to facilitate technology sharing to a level commensurate with that of itsallies and partners. India’s elevation to Tier I of the Strategic TradeAuthorization (STA) license exception in year 2018 facilitatesinteraction in advanced and sensitive technologies.
Conclusion ofLEMOA (2016), COMCASA (2018), ISA (2019) and BECA (2020)further strengthened the framework for defence cooperation. Defence Policy Group, Military Cooperation Group, Defense Technology and TradeInitiative and its Joint Working Groups, Executive Steering Groups forArmy; Navy; and Air force, Defence Procurement and ProductionGroup, Senior Technology Security Group and the Joint TechnicalGroup.
Counter-terrorism and Internal Security:
Cooperation in counterterrorism has seen considerable progress with enhanced intelligencesharing, information exchange and operational cooperation. Thebilateral Joint Working Groups on Counter-Terrorism and DesignationDialogue is an important mechanism. Both sides work together in law-enforcement andsecurity cooperation through the Homeland Security Dialogue (HSD) and cooperate on counterterrorism and security issues in multilateral bodies, including on listingand designations of terrorists and terror groups.
Cybersecurity has increasingly drawing attention from policy makers as the world becomesincreasingly interlinked and dependent on digital pathways. The sheer complexity of thismedium, coupled with the rapidity of technological change has meant that much of theco-operation on framing the rules of the road has been at the purely technical level.Increasingly, though, the issue of cybersecurity is one that requires inter-governmentalintervention since there are interlocking issues in the technical, business, legal, securityand international policy arenas that have to be resolved. At the international level, theprimary inhibitor has been the distrust amongst governments, who have impugned variousmotives, ideological and otherwise, behind the policy initiatives of the other.
Cyber security cooperation should be a natural area of cooperation between India andthe United States for a number of reasons. The fact that both countries are democracies,with similar values sets aside the scope for distrust on ideological grounds. Furthermore,the two countries have also been at the receiving end of cyber threats both from statesponsored and non-state actors. The structural complementarities between the twoeconomies, especially in the services sector which is a major user of cyber networksprovides further motive for the two countries to cooperate in this sector.
Despite thisstrategic fit, there has been very little in the nature of cooperation, either bilaterally ormulti-laterally. Cooperation between the two countries had been mooted as early as 2002when the India-US Cyber Security Forum was set up in the very first flush of cooperationbetween the two countries. The Forum saw possibilities for cooperation in the lawenforcement sphere, in research and development, in the military sphere, in thetechnological sphere, and in intelligence sharing. Whilst all these hold good even today,the escalating threats emanating from cyberspace warrant increased and urgent cooperation in this sphere. This can take the form of sharing best practices and coordinatingapproaches geared towards a common vision of ensuring that cyberspace remains openand free, and at the same time secure.
Despite the fact that intelligence cooperation between two countries is indeed a sensitivein nature, there is a growing need for intelligence sharing between India and the US asthey share several common goals for the welfare of not only for their citizens, but also forthe global welfare. Since the end of cold-war in general and visit of President Clinton toIndia in 2000 in particular, the relations between the two countries have risen significantly.
As on date, India and the US share several common challenges such as threat posed byterrorism and religious extremism; proliferation of the Weapons of Mass Destruction(WMD); and military rise of China. The issue of nuclear security offers both governments’diplomatic, practical and technical ways in pushing forward the nuclear and radiologicalsecurity agenda. India can also cooperate with the US in counter proliferation measuressuch as the PSI. Though, India is not a member of the PSI agreement, it made clear that itsupports the basic principles of interdiction to control the spread of WMD and their carriers.
This would give the US and India a chance to cooperate and collaborate and exchangeinformation. In a possible future scenario it is very likely the cooperation couldpredominantly be in sharing technical intelligence like bank transfers, fictitiousorganisations, terror linkages, Chinese maritime surveillance, sale of high-tech equipmentfor intelligence, border monitoring equipment, WMD trail, nuclear material information,brain mapping, better technology for accessing information through interrogation andlast but not the least sharing of low-level satellite imagery for greater knowledge andinformation about these issues. The cooperation would also evolve with regarding nanosatellites, high-tech nuclear safeguarding equipment, scenarios for terror attacks and gridnetwork for intelligence sharing. However both the countries have not yet totally exploitedthe enormous scope of the cooperation despite the natural overlap of strategic interests.The next decade would be a test for both the partners to reach the zenith of the cooperationof which intelligence sharing should be established as a pillar.
Economics – Trade and FDI
India-US economic relations are an important element in the overall relationship betweenthe two countries. Almost all economic indices bring out the importance of this aspect ofthe relationship to the well-being of both countries, something further acknowledged inthe Strategic Partnership document of July 18, 2005 where almost all the focus areas,including Economic Growth and Trade Promotion, Energy and the Environment,Democracy and Development, and High-technology and Space were economic-centricor related. While common goals and values are at the core of the relationship betweenthe two countries, the increasing synergies in the economies of the two countries are acatalytic factor.
The three pillars of India’s global engagement that had been identified byPrime Minister of India recently are “sustaining capital inflows to supplementindigenous investment efforts, the need to take advantage of rapid scientific andtechnological developments in the world which provide an opportunity for India to leapfrog its technological development, and the need to ensure that the country’s growth isnot constrained by scarcity of natural resources.” A harmonious and growing relationshipwith the US is a sine qua non to achieve all these three objectives. On the US side greateraccess to the ever growing Indian market has been a major motivator for engagementwith India. Bilateral trade has shown an impressive growth more than tripling over thelast decade. In 2009 India for the first time figured in the list of top 15 countries withwhom US had major trade links.
In the realm of Foreign Direct Investment (FDI) too there has been substantial two-waygrowth in recent years. Both US investments in India and Indian investments in US haveseen dramatic increases in recent years. With the explosive growth in diffusion ofknowledge across international boundaries, with the advances in information technology,both India and the US stand to gain the coming decades with greater integration of theirtwo economies. Although India is projected to become on the world’s top three economiesin the coming decades and the US will retain its preeminence as a major economy withthe high level of per capita GDP for many years to come. The two countries should startpreparing now for the future when these two economies will common political and socialgoals can become one of the major alliances shaping the future evolution of internationalpolitical and social order.
Historically dual use high technology commerce between US and India has always poseda problem. It was briefly resolved in 1984 with the signing of MOU (Memorandum ofUnderstanding) between the two countries on such commerce. After the 1998 nucleartests by India greatly affected such high technology transfers from which it recoveredonly after the initiation of the NSSP (Next Steps in Strategic Partnership) between the twocountries. The 2005 India-US nuclear deal further facilitated such high technology transfersalthough not fully to the satisfaction of India. In particular the presence of Indiandestinations in the Entity List has been a thorn on the Indian side. Studies have shownthat the inclusion of these entities in the list does not add much to the ability of US topursue its national policy of not supporting either unsafeguarded nuclear activities ormissile programs. On the other hand they do affect in a negative manner India-US bilateraldiscussions on other related strategic issues. The entities can be easily removed from thelist without affecting the US policy of not supporting WMD programs in India.
SinceIndia is not currently a member of any of the four multilateral export control regimes, itis subject to export licensing in a large number of dual use items of significance for civilindustry and hence delays in the procurement process. The two countries should, incooperation with other members of these regimes, explore ways and means through whichIndia can be integrated with the regimes, especially as India is one the few countries withtechnology encompassing the full range of subjects covered by these regimes and is yetnot a member. India has the first step of harmonizing its export control list in line withthese regimes. India and US should now seriously explore how to mange future dual usetechnology trade in a manner that helps global trade without affecting internationalsecurity.
Energy and Climate Change
2005 was a landmark year in India-US relations because of the July 25 Indo-US nucleardeal which was followed by US-India 123 agreement and the subsidiary agreement onreprocessing. India is poised to expand greatly the share of civil nuclear power in itsenergy mix and the US nuclear industry too is looking forward to taking part in India’sfuture nuclear energy programs. India had, in turn, passed a civil nuclear liability billalthough it does some features not found in the nuclear liability bills of other countries.
The US industry along with the US government have expressed their anxiety over theIndian bill fearing that it may impose extra ordinary burden on the US industry. However,close examination of the Indian bill does admit of remedial measures that can be done toallay the US industry fears. However, a resolution of the matter to the satisfaction of bothsides would require both sides to abandon their current rigid positions. If this is resolvedthen the way is open for substantial further nuclear cooperation between the two countriesin all matters pertaining to civilian nuclear uses in future and in particular cooperating innuclear safety and security issues, assisting new entrants to civil nuclear power in managingsafely their nuclear programs etc. India with its strong and well flourishing base in nuclearresearch can join with US in managing future global civil nuclear programs in animaginative manner which is equitable and non-discriminatory.
The pursuit of cooperation between India and the U.S. in the renewable energy (RE)sectorcomes from the realization of the fact that environmental pressures will continue to riseand are strong enough to merit concrete policy changes with respect to the nature ofenergy consumption. India and U.S. have a mutual interests that will be fulfilled if theycooperated in the RE sector. This is because India and the U.S. are among the world’shighest greenhouse gases emitters. Increased use of RE can reduce environmental pressureson economic growth, and the two need not be irreconcilable. The nature of Indo U.Scooperation in the RE sector can be envisaged to be of two kinds:
- Transfer of technology (TOT) and FDI from U.S. to India; and
- Joint cooperation based on innovation in the area of appliances using RE.
Literature available thus far suggests that the Indiangovernment is making necessary policy changes to facilitate transfer of technology andFDI in the RE sector. The international expo which was held in October 2010 suggeststhis. Therefore Indo U.S. cooperation in the RE sector would essentially be marked byU.S. exports to India. That being said, Joint cooperation in technology development oughtto be the goal India must work towards. Given that India is developing its domestic REsector also, this should not be a difficult task to achieve in the future. But U.S. and foreignfunding/investment would initially provide the momentum needed to increase the REgeneration. Joint cooperation in technology development may among other things improvethe technological base of India as well.
Climate change and environmental issues:
While the quest for energy independence animates US energy and climate change policiesunder the Obama administration, the need to expand energy sources to fund its gallopingeconomic growth is a driving factor in India’s own policies on these aspects. He hasinitiated a series of legislative and executive decisions in order to realize the promises ofa green energy future for the US. Imponderables do however remain, including the natureof the administration’s political commitment in the face of rising costs in achieving agreen future and the non-realization of the potential of alternative energy sources likeethanol.
India’s own huge plans to realize energy sufficiency span the entire spectrum of energysources from coal to nuclear to bio-fuels to renewables. The promise of the Indo-US nucleardeal is close to being fulfilled with a slew of bilateral nuclear agreements that India hasentered into after the NSG ‘clean waiver’ of September 2008. The country’s total installedrenewable energy capacity as of March 2010 stood at nearly 17,000 MW, a massive leapfrom about 5000 MW in 2004. India is currently the fifth biggest producer of wind energyin the world, after Denmark, Germany, Spain, and the USA. Its wind power potential hasbeen estimated at over 45,000 MW. India also launched the National Solar Mission inJanuary 2010 with an aim to generate about 20,000 MW of solar energy by 2022. Thecountry’s National Action Plan on Climate Change (NAPCC) released in June 2008 has 8’missions’ to achieve the goal of sustainable development, including developing solarenergy, water conservation, energy efficiency, sustainable agriculture, among others.
India and the US therefore can take advantage of each other’s priorities and seek a betterfuture for their peoples, while at the same time being sensitive to their respectivecompulsions and goals. For instance, New Delhi will have to convince Washington thatits energy relations can be a form of ‘positive clout’ with countries like Myanmar or Iranwhich can be channeled to bring about a change in their foreign policy positions for thegreater regional good. A ‘clean and green’ future is in their mutual interests, and theconsequences of not being able to achieve such a future are stark, especially so for adeveloping country like India.
Social and Community Development
Education sector is of critical importance because the challenges of poverty, food security,public health, human resource development and women empowerment can be successfullymet if citizens attain high quality of education. It is imperative and significant for largedemocratic nations such as India and United States that its citizens attain high quality ofeducation so that they can participate in the democratic process and nation buildingresponsibly and successfully.
In this regard, India-US Cooperation in education sector is very significant. Given thatIndia is the second most populous nation in the world and its 50% populationbelongs to youth below 25 years age, imparting quality education is an area of utmostimportance for the Indian nation. To nurture a responsible and enlightened citizenry,these young people will have to be imparted with quality education other than fulfillingtheir basic necessities. In this regards, India-US cooperation in the education sector couldbe very significant. It would be significant to highlight that India-US cooperation is gettingstronger in the education sector as already more than 100,000 Indian students are enrolledin various educational institutions in the United States. India is on the top position interms of place of origin for international students in the United States.
However, realising the importance of cooperation in education sector, the two governmentshave decided to form an India-U.S Higher Education Forum under the auspices of theU.S.-India Business Council apart from taking several other initiatives. To promote greatereducational collaboration, Foreign Education Service Providers Bill has been introducedin Indian parliament. The Nehru-Fulbright Fellowship Programme and the Singh-ObamaKnowledge Initiative are providing momentum to the educational exchange programmebetween the two countries. The India-U.S Science and Technology Endowment is also setto play an important role in promoting research collaboration and academic exchanges.However, there should be an exploration for even deeper collaboration and understandingin the education sector between India and the United States. More creative initiativesneed to be taken by both the sides.
Health sector in one of the significant areas of critical importance where there could bedeeper collaboration between India and the United States. Considering the importance ofcooperation in the health sector, both the nations have set up science and technology,health and innovation working groups aimed at exploring new areas of cooperation inleading technologies as well as addressing global health challenges.
This has resulted in the setting up of a joint US$30 million science and technology endowmentaimed at innovation through joint US-India science and technology projects. Additionallythe governments have decided to establish a seventh Regional Global Disease DetectionCenter in India which will be a part of the Disease Detection (GDD) network. The othersix regional centers are situated in Kenya, Thailand, Guatemala, Egypt, China, andKazakhstan.This network will engage in a wide range of activities such as emerging disease detectionand response, laboratory systems and biosafety, pandemic influenza preparedness andresponse, health communications, zoonotic disease investigation and control as well asfield epidemiology training.
The India United States Health Dialogue launched in late 2009 has already resulted settingup of four working groups to advance cooperation and establish common goals betweenIndia and the United States in health sector. India had suggested including mental healthin the working group on non-communicable diseases.The United States has continuously supported India’s polio eradication programmes. The
United States Centers for Disease Control and Prevention (CDC) has provided over US$111million to India for polio eradication since 1999. The contributions made by United StatesAgency for International Development (USAID) in the health sector in India are significant.
It has launched Health of the Urban Poor Program which is directed at improvingreproductive and child health in urban poor slum areas. Similarly, Gates Foundation is also engaged in promoting health cooperation between India and the United States andhas made substantial investment in health-related activities in India, especially HIV-AIDSprevention and maternal and newborn health.
The Indo-US trajectory holds similar promise in other realms. On defence acquisition, a recent report by the Stockholm International Peace Research Institute (SIPRI) noted that the US had recorded “a blazing growth in its arms exports to India, recording over 550% growth in 2013–17 compared with the previous five years. As a result, the U.S. has become India’s second largest supplier.” In trade, in 2017, the Indo-US bilateral trade of goods and services reached US$140 billion from US$118 billion in 2016, inching towards the goal of US$500 billion. In immigration, Indians continue to dominate the high-skilled visa category, at times making up over 70% of H1-B visa holders. Huge investment is required to meet US$500 billion trade opportunity and key sector HUBs development in India & US.Secured Governance strategy play a key role in minimise the Government investment and boost private investment in HUBs development for sustainable economic growth. Immense quantity of fundsare required from Public & Private stakeholder for ‘SMART CITY DEVELOPMENT’ and ‘BLUE ECONOMY GROWTH’ to enhance the sector’s contribution in GDP, ECONOMIC GROWTH and EMPLOYMENT OPPORTUNITIES in both countries India and United States of America.
Secured governance for has major characteristics like participation, rule of law, transparency, responsiveness, equity and inclusiveness, effectiveness, efficiency,accountability and strategic vision and consensus orientation. Challenge for us is to create a system of governance that promotes supports and sustains development. With improved resource allocation, enhanced governance, Interdependency among sectors and transparency in the system going hand in hand with Information Technology and Innovation can deliver a safer, cleaner and more accountable delivery of self-sustaining infrastructure and services.
A high degree of technical integration and economic interdependence in modern societies will also increase uncertainty regarding where risks begin and end, and help them judiciously plan and be prepared for even minor event and rings in society participation in nation building Process.
“Secured Governance offers a strategy for the government to get all the basic infrastructure development with a negligible investment by the Government. It is a concept of developing Techno Economic Corridors connecting HUBs which will act as growth centre for individual sectors. The very concept of “Secured’’ here implies a secured convergence or knitting with various sectors defining a growth for an economy.”
Secured Governance – A Holistic Approach to Infrastructure Development Secured Governance is a concept that is catching the attention of many as a holistic approach to infrastructure needs, promising a great deal. It professes taking advantage of valuation of assets created, and delivering at negligible cost to the government. It aims at balanced growth in all sectors in need of better facilities, in a more holistic manner, rather than focusing only on say expressways, or power or any one of numerous other sectors. While addressing any one of them, the others also get due attention ensuring all round development. It promises more societal participation and benefit sharing with transparency. Underlying this is a strategy of developing techno-economic corridors connecting urban areas across the country.
Secured Governance advocates a pragmatic approach of taking Advantage of Valuation of Assets Created
This is not new. We all know when development takes place there is valuation in property. Who benefits from this? More often than not it is incidental and taken advantage off by land and property sharks. Imagine a model where this valuation can be ploughed back into the project and also benefit the people around. First the cost of the project is reduced, and can actually be at negligible cost to the government if carefully planned. Next the population sees it as benefitting them and so they participate more enthusiastically, helping with early completion of the project rather than being an impediment.
Public Private Participation (PPP)
The method of execution envisaged is essentially of the Engineering, Procurement and Construction (EPC) model, where concessionaires bid for a project, with the incentive being concurrent areas offered to them for development and commercial use. These will give returns in four to five years which will meet their investment cost. It is better than waiting for 20 years collecting toll to make good the loans taken for a project. While the concessionaire utilizes valuation in a pattern that is part of a larger plan for the area, he also shares this with more and actually adds more value to the whole system. It will be a win-win situation. The SG approach requires the Government to participate as a facilitator and nothing more. The first step is to recognize the merits of a multi-sector approach to infrastructure and conceive projects which may be predominantly one sector but carry with them smaller packages of other sectors. Implied in this is the ability to take decision across ministries and give clearances at one point. The method of implementation will also be peculiar to each project, the place and the local conditions.
Single window clearances would therefore have to be the norm, supported by empowered teams that can help conceptualize and clear a project in the SG mould. Once this is done, the execution may be decentralized to specific states or regions. Help from the government will only be required for mid-course corrections where inescapable. The requirement is to move from small to big, from project to project. Each will be unique in itself depending on what the ground and the situation dictates. The method of both valuation and value addition needs expertise and imagination for holistic development in the state through Secured Governance. PPPs are essentially “risk sharing partnerships” between governments and the private sector on financing, designing, constructing and operating public infrastructure and public services. Infrastructure projects are inherently complex and unpredictable, and, under PPP arrangements, governments opt to transfer specific tasks and the risks associated with them to private enterprises that might be better able to execute and mitigate them.
Investment in infrastructure is necessary for the economy of both India and US, as power shortages, inadequate transport and poor connectivity affect overall growth performance and progress. Infrastructure Growth, huge investment toward a greater formalisation of the economy is bound to lead to acceleration in living standard of local people and generate large scale employment. Government clearly hold the key to realising this potential and taking a proactive stance.
Use modern technologies to provide both immediate assessment and the longer-term ability to continually evaluate the fine balance between lean operations and risk mitigation.Secured Governance concept will uplift the grass-root level of the country, hence adding feather in the overall development of both countries.Additionally, infrastructure spending creates jobs as workers must be hired to complete the green-lighted projects. It is also capable of spawning new economic growth. For example, the construction of a new highway might lead to other investments such as gas stations, Restaurants, emergency centres, ATMs, Cyber cafe and retail stores opening to cater to motorists.The Secured Governance HUBs aid to boost employment generation and sustainable investment opportunity in a big way. It is expected to attract hugeinvestment over the next fifty years and generating millions of direct and indirect employment opportunities in India and US.
Dr P. Sekhar,
Global Smart City Panel,