The tension in the Persian Gulf is also impacting India’s Aviation sector as all the flights flying over Iran is being re-routed.
Issues related to trade, data flows and arms from Russia, Iran and the current situation in Strait of Hormuz will be topping the agenda of talks when the US Secretary of State Mike Pompeo arrives tomorrow.
Though the visit has been termed as a preparatory visit ahead of Prime Minister Narendra Modi’s meeting with the US President Donald Trump on the sidelines of the G-20 Summit in Osaka, Japan between June 28-29, there will be wide-ranging issues on the table for discussion. Pompeo will meet external affairs minister Dr S Jaishankar on June 26 for talks.
Officials told Financial Express Online, the US might push New Delhi to ink Comprehensive Trade Agreement, which would help in resolving the present trade war between the two sides. Besides putting a price cap on most medical devices imported from the US and India has also put certain conditions on e-commerce of some of the major US companies operating in the country.
As reported earlier, the US restrictions on work visas for Indian professionals could feature during talks, though the US State Department last week had indicated that there are no such plans.
On the proposed US restrictions on the visa for professionals, sharing his expert views Harjit Singh founder of EB5 USA services told Financial Express Online that, “Indian Tech companies like WIPRO, TCS, Infosys and many others will be affected tremendously because the cost savings will not be there.”
According to Singh, “Silicon Valley will be affected by 15% CAP as it needs talented engineers to build products. And storing data locally comes with heavy infrastructure costs. Once again, H1B is being used as a trade negotiation wrongly and India which has stringent data localization laws will be hurt badly.”
The official spokesperson of the Ministry of External Affairs (MEA) Raveesh Kumar said that “India remains engaged with the US administration remains engaged with the Congress on Visa issue. We have emphasized, time and again, at all our high-level interaction, the contribution of Indian skilled professional to the growth and development of the US economy, we continue to do that.”
CATSAA & ARMS Sales
Considering India as a critical partner for a free and open Indo-Pacific Region, Pompeo is expected to push for further enhancing the strategic partnership between the two countries.
The visit is also being considered as a preparatory visit for the second 2+2 Indo-US Dialogue. Also, the two sides will be discussing Countering America’s Adversaries Through Sanctions Act (CAATSA) as the US has once again asked India to stop buying arms from Russia. The Trump administration is urging New Delhi to cancel the S400 Triumf missile shield and other Russian weapon systems.
The US is claiming concerns that the Russians are “listening in’’ into the secure communications networks, suggesting that the interoperability between US and Indian forces could be hit.
The US is aware that the S400 deal was being negotiated even before CATSAA was imposed on Russia.
Several defense deals between the two countries are at various stages of negotiations and completion including transport aircraft, long-range submarine hunters, UAVS for the all the three services, and helicopters.
The US companies are also bidding for fighter aircraft for the Indian Navy and the Indian Air Force which is expected to cost $ 20 billion.
Iran & Energy Security of India
India has stopped importing oil from Iran after the US had imposed sanctions on that country. The standoff between Iran and the US has been a cause of worry for New Delhi, more so after Tehran shot down an American drone last week. This has caused tension in Strait of Hormuz, a vital sea lane connecting Persian Gulf and Gulf of Oman through which 30 percent of global crude oil and a third of liquefied natural gas passes.
While India has been in touch with Saudi oil minister Khalid Al Falih and conveying New Delhi’s concern on rising crude oil prices in the backdrop of the developments in the Strait of Hormuz, Pompeo is stopping over in UAE and Saudi Arabia on the way to India.
The tension in the Persian Gulf is also impacting India’s Aviation sector as all the flights flying over Iran is being re-routed. Following Federal Aviation Administration or FAA of the US banning American flights from using the Persian Gulf, Strait of Hormuz and Gulf of Oman area, India’s Directorate General of Civil Aviation has announced that Indian carriers will avoid “the affected part of Iranian Airspace” to ensure safe travel for the passengers.