The US extends the advantage of cutting-edge tech, whereas India offers a skilled workforce
The India-US relationship has matured in the last decade, to become one of the most defining partnerships of the future, with a foreseeable impact on the global economy, trade and geopolitical stability. In the past few years, our bilateral ties with the US have evolved into a ‘global strategic partnership’, with both countries taking remarkable strides to promote economic partnership and international peace, based on our shared democratic values and increasing convergence of interests on bilateral, regional and global issues.
India to play a key role in US South Asia strategy
As India emerges as a key player in the Indo-Pacific geopolitical axis, greater cooperation in defence will dominate the next level of engagement between the two countries. Last year’s visit to the US by Prime Minister Narendra Modi has ushered a mutually-beneficial association. In fact, India’s movement into tier-1 of the Strategic Trade Authorization and conditional exemption from sanctions imposed under CAATSA (Countering America’s Adversaries Through Sanctions Act) clearly signify our position as a ‘major defence partner’ for the US.
The US and India’s focus on enhancing strategic consultations on defence and foreign policy issues through the first-of-its-kind ‘2+2 Dialogue’, held on September 6 between the highest ranking foreign and defence Cabinets from both sides, is yet another diplomatic milestone between the world’s largest economy and the world’s fastest growing economy. The key announcements and discussions held during the dialogue will pave the way for greater peace and stability in the Indo-Pacific region.
Both countries will need to work together to address common threats and increase security cooperation to build a robust defence ecosystem. The signing of the foundational COMCASA (Communications Compatibility and Security Agreement), prioritising co-production of defence equipment under Defense Technology & Trade Initiative (DTTI), creation of tri-series military exercise and Industrial Security Annex (ISA), as well as increased cooperation in maritime security will further deepen trust and defence ties between the two nations.
Increased bilateral trade a win-win for both nations
The US trade and investment relationship with India continues to grow—with India having the fastest growing FDI in the US. In fact, bilateral trade has increased from approximately $20 billion to $126 billion per year during 2001-17, growing by more than 500%.
While the US is India’s largest trading partner, its bilateral trade with China is six times greater than with India, whereas South Korea, whose GDP is 40% lesser than India’s, has twice the bilateral trade volume with the US. India, for its growth, needs to propel the proportion of trade as a component of its GDP, and for this, India-US trade has to substantially increase.
India can benefit from the current US-China trade uncertainty by leveraging higher export potential of intermediate parts, including defence and aerospace equipment, auto parts, engineering goods, amongst others. In addition, India should take advantage of its manufacturing expertise in textiles and footwear, as well as in mobile phones. Further, a strong US-India relationship has the potential to contribute to global economic prosperity and security, by continuing to engage on trade and market access, to assuage business concerns over protectionist measures in both the countries.
It is a relationship between two natural allies
The US extends the advantage of cutting-edge technology in various fields, whereas India complements by offering a skilled workforce. Landmark government initiatives such as Make-in-India, Smart Cities, Digital India and Startup India offer a vast opportunity for collaboration and exchange of global best practices.
India is steadily becoming the epicentre for several US companies, with the likes of Lockheed Martin and Boeing setting up manufacturing bases in India. Many US firms are also lead partners for Allahabad, Ajmer and Visakhapatnam Smart Cities, highlighting India’s tremendous investment opportunity. At the same time, over 100 Indian companies operating in the US, including TCS, Infosys and Wipro, have created over 113,000 jobs and invested nearly $18 billion in the US. India is on an upward trajectory in the evolution of its digital ecosystem, with leading US technology companies including ‘FAANG’ i.e. Facebook, Apple, Amazon, Netflix and Google, playing a key role. Amazon’s plan to infuse $2 billion in India, Walmart’s acquisition of Flipkart in the world’s largest e-commerce deal, Netflix producing local content for the Indian market, and most recently Warren Buffett’s interest to pick-up a stake in Paytm clearly demonstrate that India has become a major market.
A partnership for the future
Today, more than ever, we are witnessing greater people-to-people exchanges across academia, culture and sports. The 3.1-million-strong Indian diaspora in the US is a vital resource, contributing to the economic and political development of India-US relations. The reinvigorated government-to-government dialogue, growing US investments in India and shared strategic interest on regional and global issues will ensure that the US and India grow together as responsible global partners and herald a new era in this significant bilateral relationship.
The author is a MD & CEO, YES Bank