India-US Relations

• India-US bilateral relations have developed into a “global strategic partnership”, based on shared
  democratic values and increasing convergence of interests on bilateral, regional and global issues.
• The emphasis placed by the Government of India on development and good governance has created
  opportunity to reinvigorate bilateral ties and enhance cooperation under the motto – ’Chalein Saath Saath: Forward Together We Go’, and ‘Sanjha Prayas, Sab ka Vikas ‘ (Shared Effort, Progress for All) adopted during the summits of our leaders in September 2014 and January 2015 respectively.
• Regular exchange of high level political visits has provided sustained momentum to bilateral cooperation,
  while the wide-ranging and ever-expanding dialogue architecture has established a long-term framework for India-U.S. engagement.
• Today, the India-U.S. bilateral cooperation is broad-based and multi-sectoral, covering trade and investment, defence and security, education, science and technology, cyber security, high technology, civil nuclear energy, space technology and applications, clean energy, environment, agriculture and health. Vibrant people-to-people interaction and support across the political spectrum in both countries nurture our bilateral relationship.

Historical Background

• India and the United States are widely recognised as the world’s largest and the most powerful democracies respectively. The relationship between these two countries is thus one of the most fascinating interactions witnessed in the relations among nations. The added significant features are marked by the fact that India is one of the oldest civilisations in the world, whereas the United States is relatively a younger civilisation.
• Factors related to civilisation, statehood and governance have made the relations between India and the US one of the most complex bilateral relations in world history.
• Soon after independence, India chose not to join any of the two power blocs, and adopted the policy of nonalignment (Non Alignment Movement “NAM”). As and when the US promoted the formation of military blocs and security alliances, India vehemently opposed them.
• India was particularly critical about the formations of South East Asia Treaty Organisation (SEATO) and
  Central Treaty Organisation (CENTO). These two organisations brought Cold War to India’s door-steps
  with Pakistan becoming an active member in them.
• The Cold War-related political divergences between India and the US were particularly visible and pronounced on issues related to decolonisation of colonial territories, the Korean War, Vietnam War, Suez crisis, Hungarian Crisis, Czechoslovakia Crisis, and the People’s Republic of China’s membership in the United Nations.

Evolution: Cold War to Present

• India’s entry into the international community of nations as an independent political entity almost coincided with the spread of the Cold War between the two erstwhile superpowers – the United States and the Soviet Union.
• As the two superpowers clashed and competed for spreading their influence around the world, India was
  faced with a Hobson’s choice to take sides in the Cold War. Prime Minister Jawaharlal Nehru decided against making a choice and announced a policy of Non Alignment. This policy challenged the ethical basis of the Cold War and aimed at preventing the Cold War and sought to adopt a policy that would facilitate India’s friendly relations with both the US and the USSR .
• Nevertheless, at times, the Indian position was disliked by the U.S.A and it went out of the way to support Pakistan and adopted anti-India posture. US supported India during China war but conditionally, and also with no offer of long term aid, whereas its support to Pakistan was unconditional. Also, it helped India during food crisis by PL-480 program, which was a politically convenient way of disposing its food surplus. Relations improved further when Indira Gandhi came back to power in 1980. The Soviet Union had invaded Afghanistan, and this tilted India towards the United States. India placed orders for F-5 aircraft, super computers, etc, and the US, in 1984, agreed to share technology to help India build naval frigates and an indigenous light combat aircraft.
• However, the same year witnessed the assassination of Indira Gandhi and the Bhopal toxic gas leak that killed thousands. US-based Union Carbide’s pesticide plant in Bhopal was involved and India’s effort to seek extradition of the firm’s Chief Executive proved futile.
• With the advent of the Missile Technology Control Regime (MTCR) in 1987, India also faced embargoes
  on missile related technology. In 1992-94, the United States allowed India to buy a cryogenic rocket engine from Russia, but blocked the transfer of related technology.

Improvement in Relationship

• India’s relations with the US had considerably improved during the relaxation of Cold War, but the collapse of the Soviet Union brought in unprecedented uncertainties to international relations, including Indo-US relations.
• The American position on the Kargil War between India and Pakistan in mid-1999 had removed yet
  another irritant in Indo-US relations, and President Bill Clinton was heartily welcomed in India. New Delhi had appreciated Clinton’s pressure on Pakistan to stop its misadventure in the Kargil Sector of Kashmir in 1999, and Washington had praised India’s restraint in not crossing the Line of Control (LoC) and responsible conduct of the Kargil war.
• After the end of the cold war, India US relations in the first half of the 1990s have been described as one of ‘missed opportunities and contradictory policies’. India and the US continued to have differences on various issues, including the extension of the Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT). The situation was further complicated when it was revealed that China had supplied M11 missiles to Pakistan and the US did not apply sanctions on China for violating the MTCR. In May, 1998, the decision of Prime Minister Atal Bihari Vajpayee’s government to conduct nuclear tests at Pokhran saw the ties with the US return to a new low.

Vision for 21st Century

• The warmth in the relationship can be seen post President Clinton visit to India in 2000. Indian Prime Minister Shri Vajpayee and Mr. Clinton signed a joint statement on bilateral relations entitled “USA-India Relations: A Vision for the 21st Century”. Post September 11, 2001 attacks in the US and December 13 terror strike on the Indian Parliament in the same year, the two countries decided to collaborate closely in the global war against terror.
• In 2004, India and USA signed strategic partnership under the name of ‘Next Steps Strategic Partnership’
  highlighting 4 areas of co-operation viz., civil nuclear cooperation, Civil Space Cooperation, High technology cooperation group, Missile Defence cooperation. The landmark moment came on July 18, 2005, when India and the US signed the Civil Nuclear Cooperation Initiative. As part of the landmark deal, India agreed to separate its civil and military nuclear facilities, while allowing IAEA inspection of the power-generation facilities. President Bush visited India in March 2006 to hold further talks on the civil nuclear deal and also give a push to defence and economic ties. The improved relationship between the two countries was highlighted once again when US agencies cooperated very closely with their Indian counterparts in the aftermath of 26/11 Mumbai terror attacks. With the visit of Barack Obama in 2010, the relations again took to new heights. He supported India’s bid for a seat on the UN Security Council and signed trade deals worth US $15 billion.
• In 2013, USA accepted India’s proposal to develop Defence Hardware jointly. Till 2013, only UK’s and Australia’s proposals have been accepted for Joint Development Defence Technology and India is the third country in this row. In the same year, US offered to codevelop an anti-tank missile named as ‘Javelin’.
• In 2014, Indian Prime Minister made his first visit to the United States, aiming to attract investment and firm up the U.S.-India strategic partnership. India-USA reached agreement on a memorandum of understanding between the Export-Import Bank and an Indian energy agency, which provides up to $1 billion to help India develop low-carbon energy alternatives and aid U.S. renewable energy exports to India.
• During his 2nd visit to India, former US President Obama heralded the relationship between the world ‘s two largest democracies, saying, “America can be India’s best partner”. India-USA announced a ‘breakthrough’ on nuclear-related issues that could help implement the U.S.-India civil nuclear deal. Later in 2015, India-USA signed documents to renew the ten-year U.S.-India Defence Framework Agreement.
• The New Security Strategy of USA released in December 2017 marked out India’s emergence as a “leading global power”, which is a significant upgrade in Washington’s assessment of India in the last 15 years. The strategy also places special emphasizes on the term ‘Indo-Pacific region’, which was defined as region “which stretches from the west coast of India to the western shores of the United States”.

Areas of Cooperation

A strong, vibrant, ever-deepening U.S.-India relationship furthers the vital national interests of both nations. In this respect, India and the United States seek to

• Slow the spread of weapons of mass destruction and ensure the safe and responsible stewardship of nuclear weapons and fissile material;
• Reduce threats from international terrorism;
• Maintain a balance of power in Asia and in Europe that promotes peace and stability;
• Promote the security of the global energy supply;
• Cooperate in the management of the global economy; and
• Effectively address climate change

Political

• The frequency of high-level visits and exchanges between India and the U.S. has gone up significantly
  of late. Prime Minister Modi visited the U.S. on 26-30 September 2014; he held meetings with President
  Obama, members of the U.S. Congress and political leaders, including from various States and cities in
  the U.S. , and interacted with members of President Obama’s Cabinet. He also reached out to the captains
  of the U.S. commerce and industry, the American civil society and think-tanks, and the Indian American
  community. A Vision Statement and a Joint Statement were issued during the visit.
• The visit was followed by President Obama’s visit to India on 25-27 January 2015 as the Chief Guest at
  India’s Republic Day. During the visit, the two sides issued a Delhi Declaration of Friendship and adopted a ‘Joint Strategic Vision for Asia-Pacific and the Indian Ocean Region’. Both sides elevated the Strategic Dialogue between their Foreign Ministers to Strategic and Commercial Dialogue of Foreign and Commerce Ministers. The first meeting of the Strategic and Commercial Dialogue at the level of EAM and MOs (Commerce and Industry) was held in Washington DC on 22 September 2015; it has added a commercial component to the five traditional pillars of bilateral relations on which the erstwhile Strategic Dialogue has focussed, namely:
  • (i) Strategic Cooperation;
  • (ii) Energy and Climate Change, Education and Development;
  • (iii) Economy, Trade and Agriculture;
  • (iv) Science and Technology; and
  • (v) FHealth and Innovation.
• In June 2017, Prime Minister Narendra Modi visited United States and a Joint Statement was released. The leaders resolved to expand and deepen the strategic partnership between the countries and advance common objectives.

Forums for Political Cooperation

Instituted Dialogue Mechanism

• There are more than 50 bilateral dialogue mechanisms between the two governments. In addition, there are Ministerial-level dialogues involving finance, commerce, HRD , Science and Technology and energy.
  A new High-level Consultation between Foreign Secretary of India and the U.S. Deputy Secretary of
  State, and a Policy Planning Dialogue were launched in September 2015.
• India and the US also held the first edition of the 2+2 dialogue in New Delhi in September 2018, indicating a new maturity in the relationship.

Strategic Consultations

• India and U.S. have in recent years, instituted structured dialogues covering East Asia, Central Asia, West Asia, Africa and the Indian Ocean Region. India and the U.S. also have trilateral with Japan and with Afghanistan. Matters relating to international security and disarmament, and multilateral export control regimes are reviewed under the Strategic Security Dialogue. Issues relating to high-technology trade are discussed in the India-U.S. High Technology Cooperation Group (HTCG).
• The two sides have agreed to work closely for India’s phased entry into the global export control regimes to strengthen global non-proliferation, arms control, as well as nuclear security.
• Along these lines, US support was crucial for India’s entry into Missile Technology Control Regime (MTCR) in June 2016, Wassenaar Agreement in December 2017 and Australia group in January 2018.

Diplomatic

• US President Barack Obama in 2010 affirmed that “the United States looks forward to a reformed UN Security Council that includes India as a permanent member”.
• India is backed by US on the membership of NSG and says it will continue to work on it carrying India to the elite club. America supports greater Indian role in securing the subcontinent and the Indian Ocean Region.
• India and the US call for freedom of navigation and resolving of territorial and maritime disputes peacefully in accordance with international law. Peace, stability and prosperity of the Indo-Pacific region, is an objective of strategic cooperation between India and the US.
• India and the US strongly condemn continued provocations by the Democratic People’s Republic of
  Korea (DPRK), emphasizing that its destabilizing pursuit of nuclear and ballistic missile programmes pose a grave threat to regional security and global peace.

Economic

• From a modest $ 5.6 billion in 1990, the bilateral trade in merchandise goods increased to $ 66.9 billion in 2014. During Prime Minister’s visit to the U.S. in September 2014, the two sides set a target to increase bilateral trade in goods & services to $500 billion.

Trade and Investment

• As per Indian official statistics, the cumulative FDI inflows from the US from April 2000 to December 2015
  amounted to about $ 17.94 billion constituting nearly 6 % of the total FDI into India, making the U.S. the fifth largest source of foreign direct investments into India.
• India’s FDI in the United States (stock) was $ 9.8 billion in 2017, up 11.5% from 2016.
• As per Office of the United States Trade Representative statistics, U.S. goods and services trade with India totaled an estimated $126.2 billion in 2017. US exports to India were $ 49.4 billion; imports were $ 76.7 billion.
• The U.S. goods and services trade deficit with India was $27.3 billion in 2017.

Tax Evasion

• India and USA have signed an Inter Governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency between the two nations on tax matters. The agreement underscores growing international co-operation to end tax evasion everywhere.

Dialogue Mechanism for Economic Cooperation

• There are several dialogue mechanisms to strengthen bilateral engagement on economic and trade issues including:
  • Ministerial level Economic and Financial Partnership and a Ministerial Trade Policy Forum.
  • For greater involvement of private sector in discussion on issues involving trade and investment, there is a bilateral India US CEO ‘s Forum.
  • Smart Cities and Urban Rejuvenation: US firms will be lead partners in developing Allahabad, Ajmer and Vishakhapatnam as Smart Cities. USAID will serve as knowledge partner for the Urban India Water, Sanitation and Hygiene (WASH) alliance with to help leverage business and civil society (Gates Foundation) to facilitate access to clean water, hygiene and sanitation in 500 Indian cities.

Defence

• Defence relationship has emerged as a major pillar of India-U.S. strategic partnership with the signing of ‘New Framework for India-U.S. Defence Relations’ in 2005 and the resulting intensification in defence trade, joint exercises , personnel exchanges, collaboration and cooperation in maritime security and counter-piracy, and exchanges between each of the three services.
• The Defence Framework Agreement was updated and renewed for another 10 years in June 2015.

Military Excercises

• The two countries now conduct more bilateral exercises with each other than they do with any other country.
  An Indian Navy ship took part in Rim of the Pacific (RIMPAC) exercise in 2014 for the first time. Exercise
  Malabar, tri-nation marine exercise is aimed for secure and prosperous Indian Ocean in specific and maritime partnership and cooperation among participants in general.
• Exercise ‘Yudh Abhay’s’ strengthens and broadens interoperability and cooperation between the Indian and US armies. The exercise provided an ideal platform for the personnel of the two countries to share their experiences on counter terrorist operations, especially in mountainous terrain. 14th such exercise was conducted in September 2018. Exercise ‘Vajra Prahar’ is a Indo-US Special Forces joint training exercise conducted alternately in India and the US.

Defence Acquisition

• Aggregate worth of defence acquisition from U.S. Defence has crossed over US$ 13 billion. The countries are also holding talks on the supply of F-16 and F/A- 18 fighter jets for the Indian Air Force. These defence deals would give a significant boost to the ‘Make in India’ program.

Defence Initiatives and Agreements

• Defence Technology and Trade Initiative (DTTI): India and the United States have launched a Defence Technology and Trade Initiative (DTTI) aimed at simplifying technology transfer policies and exploring possibilities of co-development and co-production to invest the defence relationship with strategic value. The DTTI Working Group and its Task Force will expeditiously evaluate and decide on unique projects and technologies which would have a transformative impact on bilateral defence relations and enhance India’s defence industry and military capabilities. The two countries have already finalised four ‘pathfinder projects’ and two pathfinder initiatives for joint development and production under the DTTI.
• The two sides have not only agreed in principle to transform from mere buyer-seller defence relationship to joint research, co-development and production of high end defence equipment, but have also signed a “Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region”.
• Three Foundational Defence Agreements: Recently, the Indian government has also pursued three crucial bilateral agreements – the Logistic Exchange Memorandum of Agreement (LEMA), the Communication and Information Security Memorandum (CISMOA) and the Basic Exchange and Cooperation Agreement (BECA). The previous UPA government opposed these three agreements as they argued that they would undermine India’s strategic autonomy and its policy of nonalignment. But in light of emerging security threats, the government has agreed ‘in principle’ to all the three. The agreements clearly puts emphasis on building interoperability and capacity of the emerging partners through joint military exercises, training, and defence equipment sales. The change in government policy led to India signing LEMOA (India-specific LEMA) in August 2016, and COMCASA (India-specific CISMOA) in Sep. 2018.

Agreement	Objective	Benefits to India	Possible Disadvantages
Logistic Exchange Memorandum of Agreement (LEMoA) or Logistics Support Agreement (LSA)	Will allow both countries to access fuel and supplies from each other’s bases Indian Defence Minister has made it clear that LEMA does not mention the stationing of American troops on Indian soil	Makes it easier to coordinate military activities Would help India in carrying out operations in the Indian Ocean and expanding its maritime reach in the Asia Pacific. Will help in correcting logistic deficiencies in tackling security challenges	There are also fears that under LEMA, the United States would pressure India into allotting portions of its land bases for exclusive military use
Communication and Information Security Memorandum of Agreement (CISMOA)	Will enable the countries to share confidential intelligence in both peacetime and war using advanced encryption technology	Indian military will get critical and encrypted defence technologies from the U.S.	Would give the U.S. access to India’s encrypted systems. Indian armed forces have expressed their reservations regarding this.
Basic Exchange and Cooperation Agreement (BECA)	Would provide India with topographical and aeronautical data as well as products aiding navigation and targeting	Would enable technology transfer and seamless communication between the military systems of the two countries.	Would enable the United States to listen to highly confidential defence conversations within India

Civil Nuclear Cooperation

• The bilateral civil nuclear cooperation agreement was finalized in July 2007 and signed in October 2008.
  The 2008 deal exempted India from an international sanctions regime that disallowed India from importing fuel or civilian nuclear technology unless it gave up its nuclear weapons.
• The US persuaded the international community to end this policy. During Indian Prime Minister visit to the US in September 2014, the two sides set up a Contact Group for advancing the full and timely implementation of the India-US Civil Nuclear Cooperation Agreement, and to resolve pending issues.
• The Group reached agreement on the compatibility of India’s nuclear liability law with relevant international conventions and creation of an insurance pool drawing experience of best practices to take care of nuclear liability risk. The two sides have started the preparatory work on site in India for six nuclear reactors to be set up in Andhra Pradesh.

India-US Civil Nuclear Deal

• India and the United States had signed the civilian nuclear deal in 2008 but differences remained over
  an Indian nuclear liability law that makes equipment suppliers ultimately responsible for an accident.
  Countries like France and the US had been asking India to follow global norms under which the primary liability lies with the operator.
• The issue of nuclear liability had been a bone of contention on reaching an agreement. As per the
  international norms, in case of any accident, the Indian government would have to pay heavy damages because all the nuclear plants in the country are run by the state-owned Nuclear Power Corporation of India (NPCIL).
• India had ruled out changes in its 2010 liability legislation (Civil Liability for Nuclear Damage Act, 2010) but offered to set up an insurance pool to indemnify companies that build reactors in the country against
  liability in case of a nuclear accident.
• Breakthrough was achieved during President Obama visit to India in 2015. The deadlock over the nuclear
  deal has been done away with during a one-on-one talk between the two countries head.

New Plan

• As per a new plan, those companies engaged in building nuclear reactors in India would buy insurance from the state-run reinsurer GIC Re. The companies would then recoup the cost by charging more for their services.
• Alternatively, the NPCIL would take out insurance on behalf of these companies.

Prospects of New Plan

• Section 17b of CLNDA (Civil Liability for Nuclear Damage Act, 2010) says the plant operators – in India’s
  case, the public sector NPCIL-can claim compensation from their equipment suppliers if the accident is a result of ‘equipment or material with patent or latent defects’.
• And Section 46 makes both suppliers and operators liable to be sued by accident victims, over and above
  the Rs. 1,500-crore cap.
• The suppliers say, these laws leave them vulnerable to open-ended criminal action and tort-law compensation claims for any damages. This is unfair, they say, because after a contractually-agreed time-frame, it is the operator – not the supplier – who ought to spot and rectify defects and therefore be liable. Prior to CLNDA , NPCIL contracts with Indian vendors did absolve them of civil liability except where specified in the contract, which was limited in terms of value and time frame.
• In the US, the law allows victims to file damage claims against operators, suppliers and designers. However, when US firms started selling abroad, they pushed for the concept of legal channeling, which left only operators liable. The Paris Convention, 1960, and the Vienna Convention, 1963, say no one other than operators can be held responsible. In 1997, the CSC (Convention on Supplementary Compensation for Nuclear Damage) came with some reforms, setting up an international liability fund. The major suppliers of equipment to India are all signatories to these conventions. CLiNDA is in violation of these.
• The government says setting up an insurance pool will fix things, but most experts don’t agree. CLiNDA already has a provision for a pool; Section 7 states where the liability exceeds the Rs 1,500 crore cap, the central government “may establish a fund to be called the Nuclear Liability Fund”. This is the fund the government has been saying it will establish. This will protect suppliers against claims by the operator. However, it won’t do much to reassure suppliers, since they will continue to be liable to tort action by accident victims.
• The Department of Atomic Energy and NPCIL think international vendors will fall in line if rules and definitions in CLiNDA are tweaked. For example, NPCIL could be defined to be both operator and supplier, since it provides design specifications for reactors it operates and the vendors would then be called “fabricators” or “contractors”. Another suggestion is for the government to explain that Section 46 applies only to criminal liability, not civil liability, i.e. intent vs accident, and not involving any money. However , it is far from clear if ideas like these would stand legal scrutiny. Firms may see the government’s offer as ‘a postdated cheque’ that can be cancelled by courts or a future government.

Energy and Climate Change

• The U.S. India Energy Dialogue was launched in May 2005 to promote trade and investment in the energy sector, and held its last meeting in September 2015 in Washington DC. There are six working groups in oil & gas, coal, power and energy efficiency, new technologies & renewable energy, civil nuclear co-operation and sustainable development under the Energy Dialogue.
• Investment by Indian companies like Reliance, Essar and GAIL in the U.S. natural gas market is ushering
  in a new era of India U.S. energy partnership. The US Department of Energy has so far given its approval for export of LNG from seven liquefaction terminals in the US, to countries with which the US does not have a free trade agreement (FTA) – with two of these five terminals, the Indian public sector entity, Gas Authority of India Limited (GAIL) has off-take agreements.
• As a priority initiative under the PACE (Partnership to Advance Clean Energy), the U.S. Department of Energy (DOE) and the Government of India have established the Joint Clean Energy Research and Development Center (JCERDC) designed to promote clean energy innovations by teams of scientists from India and the United States, with a total joint committed funding from both Governments of US$ 50 million.
• India and the US are advancing cooperation and dialogue on climate change through a high-level
  Climate Change Working Group and a Joint Working Group on Hydroflurocarbon. India has also become the latest Asian country to buy U.S. crude after South Korea, Japan, China, Thailand, Australia and Taiwan, as the countries seek to diversify oil imports from other regions after the OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulfur content.

Counter-terrorism and Internal Security

• Cooperation in counter-terrorism has seen considerable progress with intelligence sharing, information exchange, operational cooperation, counter-terrorism technology and equipment.
• India-US Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing and capacity building.
• India and USA have also signed an agreement to join the global terror database maintained by the Terrorist Screening Center (TSC) of the U.S. The U.S. has already finalised such agreements with 30 countries and the Terrorist Screening Center has details of 11 ,000 terror suspects on its database, including nationality, date of birth, photos, finger prints (if any) and passport numbers.
• Under this arrangement, both sides will give each other access to terrorism screening information through designated contact points, subject to domestic laws and regulations, said the statement.

Science and Technology

• Science and technology cooperation between the United States and India strengthens bilateral
  relationship, promotes economic growth, and allows developing new and innovative technologies and
  products to address shared challenges. The United States and India believe that science, technology, and
  innovation are key tools that will help us address global challenges such as climate change, health, education, food, water, and energy security.
• The framework of U.S.-India Science and Technology Cooperation Agreement was signed in October 2005.
  In 2000, both the governments endowed the India-U.S. Science & Technology Forum (IUSSTF) to facilitate
  mutually beneficial bilateral cooperation in science, engineering, and health. The U.S.-India Science & Technology Endowment Fund was established in 2009.
• Collaboration between the Ministry of Earth Sciences and US National Oceanographic and Atmospheric
  Administration has been strengthened under the 2008 MOU on Earth Observations and Earth Sciences.
  A ‘monsoon desk’ has been established at the U.S. National Centers for Environmental Prediction. India’s contribution of $250 million towards Thirty-Meter Telescope Project in Flawaii and Indian Initiative in Gravitational Observations (IndiGO) with U.S. LIGO Laboratory are examples of joint collaboration to create
  world-class research facilities.

Space

• The US played a key role in the early Sixties in establishing the sounding rocket programme that
  marked the beginning of India’s space effort. In subsequent years, NASA helped ISRO in satellite
  broadcasting and remote sensing – till 1974, when India-US bilateral relations became strained in the
  wake of India’s first nuclear test and, later, the success of its first launch vehicle, the SLV-3, in 1980 (which also demonstrated the country’s technological capability to build ballistic missiles). Cooperation between ISRO and NASA came to a standstill after India’s nuclear tests in 1998 when the Clinton administration enforced a unilateral embargo on ISRO.
• Washington, however, acknowledged this only in 2004 and India-US ties improved as civilian space
  programmes were made part of the India-US Next Steps in Strategic Partnership (NSSP) agreement.
  Since then, both sides have collaborated on climate change research and utilised data from remote sensing satellites for weather forecasting, disaster management support and education. ISRO now launching American satellites certainly marks a dramatic upswing in bilateral space cooperation.
• A bilateral Joint Working Group on Civil Space Cooperation provides a forum for discussion on joint activities in space. The last meeting of the JWG was held in September 2015 in Bengaluru. NASA and ISRO
  are collaborating for India’s Mars Orbiter Mission and for a dual-band Synthetic Aperture Radar (NISAR).
  In 2013, the US spacecraft Mars Atmosphere and Volatile Evolution mission (MAVEN) entered the Martian
  orbit just two days before India’s Mars Orbiter Mission (MOM) did. NASA ‘S deep space network provided
  space navigation and tracking support to MOM, and now ISRO and NASA routinely share data and imagery from these spacecrafts.
• Stronger India-US space ties bode well for multilateral cooperation too, with over 50 space agencies across the globe eager to participate in space exploration.
• Formulating much-needed space laws needs strong leadership and ISRO’s impeccable credentials could see India play a major role in the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS).

Diaspora and Cultural Exchanges

• The 3.5 million-plus strong Indian American community is an important ethnic group in the U.S., accounting for about 1% of the total population in the country.
• Indian American community includes a large number of professionals, business entrepreneurs and
  educationalists with increasing influence in the society.
• With two Indian Americans occupying high level posts of Governor and several representatives of the people, the Indian Diaspora has assimilated into their adopted country and is acting as a catalyst to forge closer and stronger ties between India and USA.
• Cultural cooperation between India and the U.S. is rich and manifested in diverse ways. Apart from the India focused educational programs at the Universities and educational institutions, many private institutions teach Indian cultural arts. In addition to the website ‘www. indianembassy.org’ and social media channels, the Embassy provides updated information on various aspects of India that are relevant to the United States, through its various digital newsletters, including the weekly “India: Partner in Growth”, focusing on business and strategic matters, and the monthly “India Live”, providing information on initiatives of the Embassy and the Consulates, major developments in India, and in culture and tourism.

Other Areas of Cooperation

Health:

• Under the 2010 U.S.-India Health Initiative, four working groups have been organized in the areas of Non-Communicable Diseases, Infectious Diseases, Strengthening Health Systems and Services, and Maternal and Child Health.
• In the first meeting of the Health Dialogue in September 2015 in Washington DC, both sides agreed to collaborate institutionally in the new areas of mental health and regulatory and capacity-building aspects of traditional medicine.

Education:

• Cooperation in education sector has been made an integral part of the strategic partnership between the two countries.
• The Fulbright program was renewed in 2008, with enhanced mandate and joint funding, to provide more student and scholar exchange grants. About 130,000 Indian students are pursuing advanced degrees in the US.
• Under the Global Initiative of Academic Networks (GIAN) launched by India, upto 1000 American academics will be invited and hosted each year to teach in Indian universities at their convenience. The two sides are also collaborating to establish a new Indian Institute of Technology in Ahmedabad.

Cyber Security:

• Cooperation on cyber issues is a key component of the bilateral relationship between India and the United States. The two countries have a strategic cyber relationship that reflects their shared values, common vision, and shared principles for cyberspace.
• India-USA framework on cyber security seeks to promote international security and stability in cyberspace through a framework that recognizes the applicability of international law, in particular the UN Charter, to state conduct in cyberspace and the promotion of voluntary norms of responsible state behavior in cyberspace.

Significance of India-USA Relationship

• The relationship between the United States and India, the world’s largest two democracies collectively housing over a billion and a half people, is one of the world’s most important bilateral relationships in the 21st century.
• They share strategic interests, but more significantly, they share deep-seated values underpinning their
  common experience of democratic governance amidst multihued social and cultural diversity.
• Strategic Convergence: India-USA share the threats they perceive namely terrorism, instability in Middle
  East, Afghanistan, freedom of navigation, regional security balance, migration, drug trafficking, etc.
• Middle East: Given its vital national interests connected to West Asia, particularly, the Persian Gulf in terms of energy requirement, huge Indian population working in the region, remittances flow, etc, India needs peace and stability in the region. The United States and India also share support for the existence and security of both Israel and Palestine.
• South China Sea: India-USA share the view of freedom of navigation in Ocean. In 2015, during former President Obama’s visit, the joint statement noted concern about the South China Sea. Whereas
  previous such statements had exhorted freedom of navigation in general terms, India’s willingness to
  mention the sea by name indicated a new willingness to confront China.
• Balance in Asia: In the US National Security Strategy (NSS) 2015 report, India receives prominent mention:
  ‘ we support India’s role as a regional provider of security’, and ‘see a strategic convergence with India’s
  Act East policy and our continued implementation of the rebalance to Asia and the Pacific ‘. The joint statement of USA-India during the visit of Indian Prime Minister to USA in June , 2017 said” a close partnership between the United States and India is central to peace and stability in the region”.
• Afghanistan Stability: As America’s war in Afghanistan enters its 17th year, India has welcomed United States “new policy on Afghanistan”, saying this move will help target “safe havens” of terrorism in South Asia. India has always advocated for having an Afghanistan-led and Afghanistan-owned peace process to ensure peace and stability in Afghanistan. Recently, by asking the Afghans to take charge of their internal affairs, USA has vindicated the position that India first took in the 1980s and has maintained ever since. USA also seeks India’s support in bringing peace, security, and stability and prosperity in Afghanistan. However, India has always focused on developmental support and denied for any troops support.
• Terrorism: USA supports a U.N. Comprehensive Convention on international Terrorism that will advance
  and strengthen the framework for global cooperation and reinforce the message that no cause or grievance justifies terrorism. India and USA have had terror attacks in the past. Both consider terrorism a global scourge that must be fought and believe that the terrorist safe havens should be rooted out in every part of the world.
• India appreciated the United States designation of the Hizb-ul-Mujahi deen leader as a Specially Designated Global Terrorist as evidence of the commitment of the United States to end terror in all its forms.
• Defence Cooperation: India and USA have pledged to deepen defence and security cooperation,
  building on the United States’ recognition of India as a Major Defence Partner. “White Shipping” data sharing arrangement, United States offer for India’s consideration the sale of Sea Guardian Unmanned
  Aerial Systems shows increasing convergence on security interests. Agreements for the purchase of two of the most advanced American helicopters (Apache and Chinook) in a deal worth about $3 billion are
  examples of growing defence ties.
• Also, the New Security Strategy unveiled in December 2017 mentions that the US will expand its defence
  and security cooperation with India which is a major defence partner of the United States, and will also
  support India’s growing relationships throughout the Indo-Pacific region.
• UNSC and Missile Technology Regimes: The United States support was also crucial for India’s entry into
  Wassenaar Arrangement in December 2017, Australia Group in January 2018 and MTCR in July 2018 . US also strongly support India’s permanent membership in a reformed UNSC.
• US has recently started using ‘Indo-Pacific’ phrase instead of ‘Asia Pacific‘, saying it captures the importance of the rise of India with which the US has strong and growing ties. China continues to address
  the region as Asia Pacific.
• Coming Back of ‘Quad 1: A decade ago, the ‘Quad’ was formed on the initiative of Japan, with a strategic naval exercise, code named Malabar 07, in which Australia, the US and India also participated. But later, Australia pulled out, apparently bowing to Chinese pressure. A regional coalition, the quadrilateral formation includes Japan, India, the United States and Australia. In these intervening years, the world has gone through a recession, the US has lost some of its global power and influence, China has grown its military and economic might and a resurgent India has aimed to position itself as a counterweight to China in Asia. The revival of Quad, thus, is the result of China’s assertiveness and ambitious agenda. Formation of Quad brings into focus the maintenance of the ‘rules based order’ in the Indo Pacific region.
• India participated in the first formal official-level discussions under the regional coalition ‘Quad’ in November 2017. The discussions focussed on cooperation based on their converging vision and values for promotion of peace, stability and prosperity in an increasingly inter-connected region. The emergence of ‘Quad’ favours India. But the emergence of China is a reality India has to deal with. Hence, India might have to build bridges with its neighbour and biggest trade partner as well.
• Pursuing this strategy, India emphasised that the quadrilateral was not aimed at any other country and said New Delhi was also involved in similar groupings in the region to deal with security and political issues.
• Apart from strategic calculations, India needs strong trade and investment relationships to meet its vast economic potential. The U.S.-India trade relationship is both substantively important for India and mutually beneficial for both economies. The United States has also remained one of the top sources of foreign direct investment in India, bringing important managerial expertise, capital, and technology with it to the dynamic Indian market. The population of India forms a huge consumer base for many countries (U.S. being one of them) and provides them skilled (STEM Skills) manpower. US companies see India as a huge market after China.

India on USA ‘Asia Pivot’

• The US Asia pivot strategy aims to maintain a dominant strategic presence in the Asia-Pacific by reinforcing its long held supremacy in the region. This strategy comes at a time when rising China’s military assertiveness in Asia is growing, America’s economic and political power is relatively declining, and the US eagerly looks forward to extricating itself from various conflicts in the greater middle east – Iraq and Afghanistan. India is seen as a lynchpin of this pivot strategy which is quite clear from the US department of Defence guidelines and also from various official statements.
• This pivot strategy offers both opportunities as well as challenges for India. It will help further enhance its burgeoning strategic relationship with the US as well as with the Asia-Pacific countries on a range of issues. But key differences between the two countries are likely to emerge regarding the political endgame in Afghanistan, and any US attempt to push India into making a choice of “with us or against us” on important strategic issues in Asia.
• India would rather prefer its own rebalancing strategy by not allying against any country (China) as its friendly relationship with all the major powers (including China and Russia) holds key to its rise in the coming decades. Besides, its own foreign policy towards the Asia-Pacific region has been evolving over the last two decades. It will thus adopt a very cautious approach towards this pivot strategy.
• Meanwhile, India would like to develop a multilateral security architecture wherein all the Asian powers can work together and cooperate on vital economic and political issues for achieving their common interests. The US’ economic condition also demands a cooperative approach towards the Asian powers, including China.
• In addition, the US recognizes that India and the US may not agree on every issue but would continue to
  enhance their strategic partnership. It also emphasises respect for India’s strategic autonomy. Perhaps, there is need for an intensive Indo-US strategic dialogue on the future of Indo-Pacific order.

Challenges in Relations

The relationship between India and USA has been a mix of dilemma and confusion. Since 1974, India and
USA have seen many instances of waxing and waning in the bilateral relationship. The India-USA relation does face issues hampering national interest of one or the other.

Some of the challenges in the Indo-US relations are:

Maintaining Strategic Autonomy

• India maintains good relations with Russia and Iran. This has been under stress after India’s tilt towards US post Cold war. India’s relations with Moscow are challenged by continuing escalation of tensions between US and Russia. This was witnessed in the form of US sanctions threat when India planned to buy the S-400 missiles from Russia.
• Similarly, US withdrawal from Iran deal posed a challenge to India’s energy security interests. However, Indian must beware of seeing the US relationship in terms of a checklist of Indian expectations alone.
• India should also gradually move from its traditional obsession with preserving its strategic autonomy in the face of external pressure to a broader acceptance of its own responsibilities in shaping the world in which it wants to thrive.

Visa Issue

• The U.S. has tightened the norms for issuing the most sought-after H1B and L1 visas in line with the Trump administration’s goal to protect American workers from discrimination and replacement by foreign labour.
• The H1-B visa is a non-immigrant visa given by the United States to employ skilled workers from other countries for various specialised fields of occupation for a certain period of time.
• The change in the visa programme is to be brought through H1-B visa programme Bill. It prohibits companies from hiring H1-B employees if they employ more than 50 people and more than 50 per cent of their employees are H1-B and L-1 visa holders.
• Impact on India
  • If changes in the Bill get through, the resultant increase in employee wages will be a cost worry for the IT industry.
  • The Indian firms will face the challenge of increased local hiring and wage hikes that may hit their margin.
  • Indian IT stocks fell by as much as 4 per cent after the re-introduction of the bill.

Trade Issues

Solar Issues

• India has lost the domestic content requirement (DCR) case related to solar cell manufacturing against US in WTO. The body declared that the DCR requirement in India’s Jawaharlal Nehru National Solar Mission violates WTO trade agreement. The ruling will affect India’s 100 GW solar energy target and raise the production cost.
• Recently, US approached the WTO demanding action against India for non-compliance of the ruling. India, however, has maintained that it has complied with the WTO ‘s ruling and had requested the WTO to set up a panel to determine its compliance with the rulings of the dispute.
• WTO’s dispute settlement body has agreed to this and set-up a panel to determine whether India has complied with its ruling in a case against the US regarding domestic content requirements for solar cells and modules.

Intellectual Property Rights (IPR)

• The United States Trade Representative’s (USTR) Special 301 Report for 2016, has kept India on a priority watch list. The report is an annual assessment of the state of IP laws in countries having trade relation with USA.
• India asserts that its IP laws are compliant with WTO’s Trade Related Intellectual Property Rights (TRIPS) and has objected TRIPS Plus’ requirements in international trade deals.
• The U.S. is against India’s compulsory licensing laws for drugs in the interest of public health as well as against Section 3(d) of the India Patent Act, which prevents patents from being taken out on a product unless its efficiency is significantly enhanced.

Trade War

• A trade war is when a nation imposes tariffs or quotas on imports, and foreign countries retaliate with similar forms of trade protectionism.
• China and the United States are locked in an ongoing trade war as each country has introduced tariffs on goods traded between each other. US claims unfair trade practices and theft of intellectual property as the basis for its actions. Trump administration said the tariffs were necessary to protect intellectual property of U.S. businesses, and to help reduce the U.S. trade deficit with China.
• Trade wars slowdown the global economy, damage the rules-based trading system under WTO, disturb financial markets and disrupt global supply chains. While trade wars may present a short-term opportunity for India to reduce its trade deficit with China, the negative impacts outweigh the minor benefits India could attain.

Issue of Poultry

• The U.S. had filed a case against India’s prohibition on importation of various agricultural products (including poultry) from the U.S. because of concerns related to Avian Influenza (bird flu).
• The U.S . had objected the ban as it was against WTO norms and had hurt its poultry exports to India. The WTO Appellate Body had found that India’s import prohibition ‘discriminatory’ and ‘more trade-restrictive than required’.

Totalization Agreement

• Totalization agreements are a means of protecting the benefit rights of workers whose working career is spread over two or more countries.
• Currently, more than five lakh Indian-origin professionals are working there and they contribute more than $1 billion annually to the US social security system.
• The absence of the Totalisation agreement means that the Indian-origin workers, who are working in the US, will not get back their social security contributions unless they spend minimum ten years in that country.
• If the two countries sign this agreement with each other, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country.

US Isolationist Policies

• Recently, US has pulled out of many international agreements and bodies. It pulled out from the Transpacific Partnership (TPP), Iran nuclear deal, UNESCO, the Paris agreement on climate change, and threatened to end NAFTA (trade deal between North American countries).
• US also said it would start the process of leaving the Universal Postal Union (UPU). This isolationist behaviour implies India needs to reconsider the depth to which it is willing to engage US in the strategic domain. It also carries the risk of US ceding strategic space to China in international for a.

Hyphenation/De-Hyphenation Issue

• The US, under President Bush, formulated the action plan of the ‘de-hyphenation’ policy which allows the State Department to treat India and Pakistan separately without referring to their bilateral relations.
• This has been useful for the US in improving strategic and military ties with India without necessitating a reaction from Pakistan.
• In 2016, US started considering re-hyphenation which implies putting India and Pakistan in the same basket vis a vis Washington’s relations with both these countries.
• India is against the policy of hyphenation with Pakistan as it could lead US meddling in Kashmir issue that could impact India’s Afghanistan policy.

Pakistan

• Since 9/11, the U.S. has disbursed over $25 billion in military and economic aid to Islamabad. The U.S. Department of Defence also awarded a $170 million contract for nine ‘AH-1Z Viper’ attack-helicopters to Pakistan to be manufactured by Bell Helicopters. India disagreed with the U.S. rationale that such arms transfers (to Pakistan) help to combat terrorism.
• However, the new US administration has signalled a shift in its policy through the New Security Strategy which seeks to apply pressure on Pakistan to intensify its counter-terrorism efforts and demonstrate that it is a “responsible steward” of its nuclear assets. It also said that the United States continues to face threats from “transnational terrorists and militants operating from within Pakistan”. Pursuing this policy, US has decided to significantly cut its financial aid to Pakistan.

Conclusion

• The India-US relationship is being increasingly consolidated. However, like in any such relationship – especially between the world’s foremost political, military, economic and technological power and a large developing country advanced in certain sectors of the knowledge economy, but beset with serious problems of poverty as well as at unequal stages of development internally – differences are normal.
• Success of the India-US relationship will lie in how effectively the two countries manage the differences that will inevitably arise between them.
• The U.S.-India bilateral relationship had been on a solid trajectory since the turn of the century. Recent momentum by establishing two by two minister framework to accelerate the works in the significant fields and signing of Logistic Exchange Memorandum Agreement (LEMOA) and COMCASA shows the right intention in right path for mutual benefits as well as for world.