Since the 2005 nuclear deal, both India and the US have started gravitating closer to each other out of converging strategic interests in the region and beyond. Increasing cooperation in all spheres of the bilateral relationship has had bipartisan support and has increased the strength of the relationship too. Fast forward to 2016, with the election of Donald Trump to the White House; this presented a fresh challenge to governments the world over as they grappled with the question of how to deal with the new dispensation. Nevertheless, strong people-to-people (educational and cultural) ties meant that India was well positioned and the current Modi government has dealt with Trump administration quite deftly.
The Trump administration has been hell bent on renegotiating a more equitable trade deal with its partners, claiming that it had been treated unfairly for a long time. This has certainly caused much anxiety to the global financial markets, sparking fears of a global trade war though, thankfully, things have settled now.
India’s trade with US has been growing steadily over the years, and the Trump administration has threatened to impose tariffs as a means to reset the trade imbalance. Positive movement is expected with both sides having made progress via trade representative talks, despite the initial setbacks.
The Russian angle
Ever since the US Congress imposed sanctions on Russia for its alleged meddling in the 2016 presidential election, India’s business transactions with Russia have become more difficult. India’s military dependence on Russia is well known and is under the spotlight now more than ever.
The Trump administration wants India to reduce its military imports and substitute them with imports from the US, which is quite difficult as most of India’s military tech is Russian made and amalgamating exisitng tech with US-made equipment is well nigh impossible overnight. Not to forget that Russia remains India’s most important strategic ally and the countries have a broad-based partnership spanning decades, Russians have stood by India in tough and testing times (especially supporting India at the UN).
The most recent sticking point is the S-400 missile defence system, worth a massive $5.4 billion, that India has agreed to purchase from Russia in view of the twin threats it faces from its Western and Eastern borders. Let’s face it, India lives in the most dangerous neighbourhood and has every right to beef up its military capabilities for self-defence.
With a mercurial Pakistan that uses terror as a state policy and a China that aspires to challenge the US in the region and beyond, India is justified in upgrading itself economically and militarily. In fact, as two large democracies with converging ideologies, destiny requires India and US to come together to maintain peace in the neighbourhood and beyond. India is, therefore, seeking a sanctions waiver in light of the aforementioned circumstances, but it remains to be seen whether Trump will accede to these demands.
Iran dilemma
After the Trump administration pulled out of the Iran nuclear deal, India has found itself in something of a spot. India shares civilisational links with Iran, and Trump’s hostile approach towards Iran presents India with another headache. India has reduced its oil imports and diversified its energy portfolio (importing shale oil from US).The recent flare-up between the arch enemies has made matters worse.
Afghanistan and Chabahar port
The Trump administration has favoured a troop pull-out from Afghanistan and has initiated a peace process with the Taliban. Hopefully, India’s concerns will be taken on board and addressed. India has invested billions of dollars in developmental projects and earned the goodwill of the Afghan people, whilst staying away from entering into a Western alliance. For India, the Chabahar port presents the only option to access the landlocked Afghanistan and Central Asia with huge, untapped energy reserves that a developing India badly needs.
The Chabahar port connects Iran with Afghanistan via the train route that could serve as an alternative for US, if it can make peace with Iran, to send military and personnel shipments to Afghanistan. It could position itself as a counter to the Gwadar port that China has developed in Pakistan, with plans to make it a naval base.
This visit from the US President has been long overdue, and expectations are high that it will inject a greater energy into developing a more broad-based, strategic partnership between the two countries.
(The writer is an MBA graduate from Anna University with a specialisation in Technology Management.)