India-US 2+2 Strategic Dialogue: A good beginning but…

by India Inc. Staff

The first-ever 2+2 dialogue between foreign and defence ministers of India and the US has resulted in a closer strategic relationship but adding an economic component to the talks could add heft to this very important bilateral relationship.

The much anticipated and twice-delayed 2+2 dialogue between the Indian External Affairs and Defence Ministers and the US Secretary of State and US Secretary of Defence has answered several questions that had been exercising the global strategic community. All of them are positive for the future of India-US ties.

But the architecture of the dialogue omits a very, many will argue, important aspect of the vibrant and multi-faceted relationship – the tensions on the economic and commercial aspects of the relationship.

It was 2+2 about 2

The ministers leading the talks on the two sides were Indian Foreign External Affairs Minister Sushma Swaraj and Defence Minster Nirmala Sitharaman with their US counterparts Michael Pompeo and James Mattis but China and, to a lesser extent, Russia were looming large over the talks.

Neither country was mentioned either in the joint statement or in behind the scenes media interactions by the two teams, but the tenor of the statements spoke volumes.

Clearing the doubts

The 2+2 dialogue had been scheduled, postponed and rescheduled twice in the recent past. Many analysts and experts had wondered, in the light of the unpredictability of the Donald Trump administration and the widely reported US clampdown on H1B visas, if the White House was signalling a downturn in what has promised to become a defining relationship between both countries without quite always delivering on that potential.

The joint statement has banished those apprehensions at least for the moment. Whether it is on Pakistan and terrorism, on taking the geo-strategic relationship forward, on defence cooperation or on the much-delayed transfer of to-of-the-line military technology, the statement clearly pointed to a better understanding of each other’s positions and greater convergence of goals.

The statement says: “The Ministers reaffirmed the strategic importance of India’s designation as a Major Defense Partner (MDP) of the United States and committed to expand the scope of India’s MDP status and take mutually agreed upon steps to strengthen defense ties further and promote better defense and security coordination and cooperation.

“They noted the rapid growth in bilateral defense trade and the qualitative improvement in levels of technology and equipment offered by the United States to India in recent years. They welcomed the inclusion of India by the United States among the top tier of countries entitled to license-free exports, re-exports, and transfers under License Exception Strategic Trade Authorization (STA-1) and also committed to explore other means to support further expansion in two-way trade in defense items and defense manufacturing supply chain linkages.”

Convergence on Pakistan and terror

In keeping with a recent trend – and proving wrong sceptics who had predicted that the US may soften its stand on Pakistan in order to wring concessions on Afghanistan – the two countries mentioned Pakistan by name in the section on terror.

“Welcoming the expansion of bilateral counter-terrorism cooperation, the Ministers announced their intent to increase information-sharing efforts on known or suspected terrorists and to implement UN Security Council Resolution 2396 on returning foreign terrorist fighters… The Ministers denounced any use of terrorist proxies in the region, and in this context, they called on Pakistan to ensure that the territory under its control is not used to launch terrorist attacks on other countries.

“On the eve of the 10-year anniversary of the 26/11 Mumbai attack, they called on Pakistan to bring to justice expeditiously the perpetrators of the Mumbai, Pathankot, Uri, and other cross-border terrorist attacks. The Ministers welcomed the launch of a bilateral dialogue on designation of terrorists in 2017, which is strengthening cooperation and action against terrorist groups, including Al-Qa’ida, ISIS, Lashkar-e-Tayyiba, Jaish-e-Mohammad, Hizb-ul Mujahideen, the Haqqani Network, Tehrik-i-Taliban Pakistan, D-Company, and their affiliates…”

Closer strategic clinch

Arguably the most important news coming from the first 2+2 dialogue was on the signing of the Communications Compatibility and Security Agreement (COMCASA) that had been hanging fire for years.

This is particularly important for India as it gives New Delhi real time access to the US’s vast and global intelligence network. Additionally, it also provides India access to the intelligence gathered by US allies subject to India’s bilateral arrangement with that country permitting this.

According to media reports in India, US intelligence proved very important during the border crisis with China in Doklam at the tri-junction between India, Bhutan and China when People’s Liberations Army (PLA) troops infiltrated into Bhutanese territory and severely undermined Indian positions in the region. China withdrew to agreed positions at the end of the 73-day stand-off. The reported availability of US intelligence on troop movements within China and Tibet enabled New Delhi to calibrate its response in an appropriate manner.

Then, the two countries have agreed to start a new tri-services exercise in which the Army, Navy and Air Force of each country will participate in joint exercises. This will be the first such programme for India with any country and promises to increase inter-operababilty between the two forces.

Strategic autonomy intact

The Opposition, expectedly, has called the signing of COMCASA a sellout to the US and labelled it a signal that India has now become a junior partner to the US.

This is complete tosh. The joint statement very clearly says: “Recognising their two countries are strategic partners, major and independent stakeholders in world affairs, the Ministers committed to work together on regional and global issues, including in bilateral, trilateral, and quadrilateral formats…”

Apprehensions that this deal will undermine India’s traditional defence relationship with Russia are also misplaced.

The missing ministers

As this report points out earlier, the 2+2 dialogue does not have an economic component. This could prove problematic, especially as the US and India have widely differing position in several economic and commercial issues that are increasingly becoming pain points in the otherwise healthy relationship.

Another dialogue involving Indian Finance Minister Arun Jaitley and Commerce & Industries Minister Suresh Prabhu on the one side and their US counterparts on the other could help sort out some of these problem areas.

The trade surplus

Most senior Indian government officials admit privately that Trump’s “America First” makes them uncomfortable. They point out the sharp contrast with Indian Prime Minister Narendra Modi’s “India First” credo, which envisages an embrace of free trade and forming partnerships with the world’s leading industrial and technological countries to make Indian companies world class as opposed to the US version that is more narrowly focused on squeezing foreign suppliers and companies out of the American market.

Trump has problems with the $23-billion trade surplus that India enjoys with the US and wants New Delhi to take urgent steps to whittle this down to an unnamed lesser figure.

The US government may be jumping the gun. Bilateral trade between the two countries needs to be encouraged to achieve the goal that Prabhu has set at $500 billion, a four-fold jump from the current level of about $125 billion. To put the current figure in perspective, it is worth noting that US-Mexico trade volume is $600 billion and the US-South Korea trade figure is at $250 billion.

Then, Trump has threatened to cut what he called “subsidies” to growing nations such as India and China. He probably meant the Generalised System of Preferences (GSP), under which the US does not levy any import duty on thousands of produces it imports from about 120 countries.

Indian goods worth about $5 billion get the benefit of this exemption, making India the leading beneficiary of this programme. Cutting back on this programme could threaten thousands of jobs in India.

Again, just as the 2+2 dialogue offers a platform to discuss contentious issues such as arms purchases from Russia and oil imports from Iran, the parallel 2+2 dialogue by ministers in charge of the key financial and commercial portfolios will facilitate solutions for difficult trade-related issues.

A good beginning

The joint statement ended by saying that the next 2+2 dialogue will take place next year in the US.

This augurs well for the two nations and if it can build on the platform created by the positive outcomes of the first meeting, it can be a force multiplier for both countries.

But with Trump at the helm, everyone will be keeping their fingers crossed.

2018-09-21T14:29:50+00:00September 21st, 2018|2017/2018, UK Edition – September 2018|

About the Author: India Inc. Staff