India-US: One step forward, half a step back

2017 will be remembered as the year in which India and the US came closer on a number of issues, yet it will also mark the year when the Trump administration frittered away some goodwill by blocking India's attempt at ensuring food security for millions. The WTO negotiations in Buenos Aires were dead almost before they began. The main point of contention: US opposition to finding a permanent solution to the issue of India (and some other countries) holding large food stocks in order to ensure food security for millions of hungry people. “India is surprised and deeply disappointed that despite an overwhelming majority of members reiterating it, a major member country has reneged on a commitment made two years ago to deliver a solution of critical importance for addressing hunger in some of the poorest countries of the world,” a statement issued by Indian government said, adding that this posed “a severe threat to a successful conclusion of the conference as there was a ministerial for mandate for a permanent solution by the MC11”. Indian has been leading the campaign to find a permanent solution to the food security issue, which is crucial for lives of 800 million people across the world - many of them in India. Media reports quoted Assistant US Trade Representative Sharon Bomer Lauritsen as saying that a permanent solution to the food stockholding issue - critical for millions of Indian farmers and other poor Indians in particular -- was not acceptable to America. Yet, India is a “major defence ally” of the US, the overall economic relationship is vibrant, at least on the face of it, Washington has reiterated its support for India to be admitted into the Nuclear Suppliers' Group as a full member and public statements by senior government officials on both sides continue to exude warmth. As we had said in an issue earlier this year, If India and the US were Facebook friends, then many in the Indian establishment would be justified in describing the relationship as “It's complicated.” Combating terrorism together A meeting in New Delhi on December 12 between senior officials of the Ministry of External Affairs and the US State Department held preliminary talks on working out the modalities of designating organisations and individuals as terrorists and coordinating the positions of the two countries on this issue. This meeting was important because such designations lead to an immediate ban on the travel of such individuals or representatives of organisation to most countries as well as a severe squeeze on their financial activities through denial of access to formal banking channels. The talks followed discussions the Indian Prime Minister Narendra Modi had with President Donald Trump during his visit to the US in June this year on setting up such a consultative mechanism. Some experts have questioned the usefulness of such a mechanism as most terror organisations and their masterminds as well as operatives rarely travel abroad and almost never use formal banking channels, preferring instead the utilise hawala channels - illegal, informal money transfer conduits - to finance their nefarious activities. Despite this, the setting up of this Indo-US mechanism adds depth to the growing bilateral relationship and displays the rapidly growing convergence of interests between New Delhi and Washington. Signals to China, Pakistan The setting up of this mechanism also signals to China, which has been shielding Pakistani support for terrorist activities by blocking a UN resolution to designate Jaish-e-Mohammad Chief Azhar Masood as a global terrorist on flimsy technical grounds, that the US and India are serious about combatting terror, regardless of where it originates. And coming, as it did, just weeks after the first meeting of the Quadrilateral - comprising India, Japan, the US and Australia - at the East Asia Summit, the meeting also sent important geo-strategic signals to China. Geo-strategic concerns India faces an increasingly assertive and often bellicose China, which has single-mindedly pursued a policy of keeping India pinned to the sub-continent in order to prevent it from playing a larger strategic role in Asia and the wider region. The Modi government has tried to circumvent this seeking increased strategic congruence with Japan and the US. Previous US President Barrack Obama's Pivot to the East aligned very well with Modi's Act East policy, which envisages closer cooperation with countries in South East Asia, East Asia and Australia on a range of issues, including strategic, security and defence relations. All these moves aimed at countering China in the region rests on a basic assumption - unstinted support from the US. Convergence of interests The US, for its part, has elevated its engagement with India as part of its policy to maintain peace and tranquillity in the Indo-Pacific - a new designation for what was, till recently, referred to as Asia Pacific - and ensure free navigability through the South China Sea, which China claims in its entirety. “As part of the free and open Indo-Pacific, we have elevated our engagement with India,” US Secretary of State Rex Tillerson said recently. “We've long had a trilateral relationship in the Indo-Pacific between Japan, Australia, and the US, and we're now working towards whether this will become a quad relationship to include India because of the importance of India's rising economy as well and I think shared national security concerns that we have with India,” he added. “And we have differences, such as the South China Sea and China's building of structures, militarisation of these structures, and how that affects our allies in the region as well in terms of free and open trade. As we've said to the Chinese, we hope we can find a way to freeze this particular activity. Whether we can reverse, it remains to seen. But it is not acceptable to us that these islands continue to be developed, and certainly not for military purposes,” he said. Still wary India conducts more military drills with the US than with any other country. And Tillerson's words should have reassured the Indian establishment. But New Delhi is worried that the very transactional US President Trump may turn his back on his “major defence ally” if President Xi Jinping offers him a deal to cut China's massive trade surplus and add a few hundred thousand jobs in the US. Ambiguity remains That's because a year into the Donald Trump presidency, there is still a certain ambiguity on where New Delhi stands in the US President's scheme of things. On the campaign trail, Trump did promise that if he were elected to the highest US office, India would have a true friend in the White House. He reiterated his statement and promised to redeem his pledge when Indian Prime Minister Modi visited Washington earlier this year. But concerns remain. Angst over trade surplus India enjoys a $20-billion trade surplus with the US and the Trump administration is keen on reducing this to a more manageable figure. “It is important that barriers be removed for the export of US goods into your markets and that we reduce our trade deficit with your country,” Trump had told Modi during their meeting. “The United States and India plan to undertake a comprehensive review of trade relations with the goal of expediting regulatory processes; ensuring that technology and innovation are appropriately fostered, valued, and protected; and increasing market access in areas such as agriculture, information technology, and manufactured goods and services,” the joint statement issued after Modi's meeting with the US President had said. The US has complained that India is not complying with World Trade Organisation rules on issues such as prescribing a mandatory domestic content on solar panels and allowing the import of US poultry products. Besides, it has also reiterated its long standing grouse against what it calls restrictive trade practices and patent infringement on pharmaceuticals, IT and intellectual property rights. But Indian policy makers feel any unilateral concession by India on trade with the US will be extremely difficult without a reciprocal gesture from the White House on Indian concerns over the grant of visas to its professionals. Entry for Indian professionals Arguably the biggest irritant in Indo-US relations - at least from the Indian viewpoint - is the squeeze on H1B visas that are used by Indian IT majors to send many professionals to live and work in the US. The two governments are in close touch on the issue of Indian professionals being able to work in the US. Gen (Retd) V.K. Singh, Minister of State for External Affairs, had told the Rajya Sabha in a written reply that there are six bills relating to the issue pending in the US. “The bills seek to amend the various provisions related to the grant of H1 and L1 visas. However, so far, none of these bills have been passed and no comprehensive policy changes have been made,” he had said. The Indian IT sector is worried that new entry norms will adversely impact their business. Merit-based system Trump has recently announced his support for a merit-based visa system that favours English speakers. The problem: the legislation behind this system proposes to cut the number of such visas by 50 per cent. Experts in India said the new law, called Reforming American Immigration for Strong Employment (RAISE) may, in fact, help India as it proposes to limit immigration to only highly educated professionals taking up highly paid jobs. “The RAISE Act will reduce poverty, increase wages, and save taxpayers billions and billions of dollars. It will do this by changing the way the US issues Green Cards to nationals from other countries. Green Cards provide permanent residency, work authorisation, and fast track to citizenship," Trump had said. In addition, the new highly competitive application process will prevents immigrants from getting US welfare benefits and protects US workers from job losses. "That′s a very big thing. They′re not going to come in and just immediately go and collect welfare. That doesn′t happen under the RAISE Act. They can′t do that. Crucially, the Green Card reforms in the RAISE Act will give American workers a pay raise by reducing unskilled immigration,” the US President had added. If RAISE is passed into law, it will make it easier for highly qualified and senior Indian personnel to get US visas but effectively close the doors for junior professionals who currently constitute the bulk of H1B visa applicants. The US Citizenship and Immigration Services (USCIS) agency has recently said “an entry-level computer programmer position would not generally qualify as a position in a specialty occupation”. This means Indian IT companies can no longer send personnel from India to fill up such positions in the US. Pending defence projects Meanwhile, on the military front, US defence major Lockheed Martin has offered to transfer the entire production line of its fabled but ageing F-16 fighter jet production line to India if the Modi government selects the plane for the Indian Air Force and places a minimum order of 100 planes. This has received support from the Trump administration even though it means moving an important and strategic factory from the US to another country - precisely what the President had campaigned against. There are also agreements on helping India build an aircraft carrier and an indigenous jet engine but these are moving slowly. Inflexion point It will be fair to say that Indo-US relations are at an inflexion point. But where will it go from here Though one year is usually considered sufficient time for a new administration to settle down, that is clearly not the case with the Trump presidency. He is still grappling with unfilled positions, resignations, sackings and controversies that have taken precedence over policy formulations. On India, in particular, Trump has not yet revealed his mind except for a reiteration of his campaign trail statement on being India's best friend. Till he clearly articulates his foreign policy and economic vision and India's place within it, a question mark will continue to hang over the otherwise warm and growing ties between the two countries.