Thursday, November 08, 2018

India-US 2+2 Talks: In India, US Sees a Strong, Stable Friend

The 2+2 ministerial India-US meeting that concluded in New Delhi on Thursday has been anticipated for a while, and its outcome, at least, at the public level has held no surprises.
Given the vast Indo-American agenda covering political ties, trade, defence, immigration, terrorism and regional issues, there was bound to be extensive discussion, and even decisions on a range of subjects. But the focus has been on defence cooperation and the issue of sanctions in relation to Iran and Russia.

Defence Deals
Not surprisingly, none of the four ministers mentioned either Russia or Iran in their official closing remarks after the talks. But some details on these two issues have emerged through subsequent press conference and briefings.
Defence cooperation is perhaps the most happening area in India-US relations and it would be safe to agree with Defence Minister Nirmala Sitharaman that it is “a key driver” of the relationship.
So it is not surprising that the two major announcements emerged in this area. The first was the decision by India to sign up to the US Communications Security Memorandum of Agreement (COMCASA) and the second was that of a major tri-service exercise in India’s east coast in 2019.
We should be clear, however, that COMCASA is an enabling agreement. It eases India’s ability to get high-grade US communications equipment. But that does not mean that the US will a) provide that equipment on demand, and b) that we will automatically have access to the high-quality information that the US possesses through its global network. Information exchanges are decided separately, what COMCASA will do is to ease the flow.
As for the tri-service exercise, it is a significant development, but part of a continuity of developments ever since India and the US embarked on the current phase of their relations in the mid-1990s. What is important, however, is that the exercise is in the east coast. It excludes what the Indians see as their most important external areas which extends from the western coast to the Saudi peninsula. The token decision here has been that the two sides will work towards having an Indian liaison officer at the US Central Command’s naval centre in Bahrain.

Damocles’ Sword Over India’s Head

Speaking at a press conference in the US Embassy in New Delhi after the meet, US Secretary of State Mike Pompeo said that no decision has been taken by the US in relation to the Indian plans to acquire the S-400 missiles from Russia. Though he did promise that through discussions with India, there could be “an outcome that makes sense for each of our two countries.” He added that the effort was “not to penalize great strategic partners like India.”
Even if President Trump issues a waiver on the application of the Countering America’s Adversaries Through Sanctions Act (CAATSA) in relation to the S-400 system, it will remain a Sword of Damocles over India’s head.
More than 60 percent of India’s defence equipment comes from Russia and this proportion will only go down marginally in the coming decades, even if India decides not to make major Russian purchases. The Act is draconian: its Section 231 demands sanctions on any “significant transaction” with the defence and intelligence sectors of Russia. This presumably covers not just acquisition of new equipment, but also spares and components relating to existing holdings. Section 235, which describes the sanctions, indicates that they are capable of completely gutting the Indo-Russian relationship. It targets dealings and payments that are linked to the US financial systems, and this more or less covers almost all dollar transactions.
A Harbinger of Strong Indo-US Ties
The second issue relates to Iran which provides a significant proportion of India’s oil requirements, which are almost completely made up of imports. Iran’s great advantage is its proximity to India, which reduces the cost of transporting the oil. There has been no talk of any waiver here and India is confronted with a major challenge in dealing with the sanctions.
Relations with Iran are not only about oil, but India’s strategic posture in the region. The Chah Bahar project is aimed at bypassing Pakistan’s blockade preventing over-land communications between India and Afghanistan, Iran and Central Asia.
At the press conference at the US Embassy, Pompeo made it clear that they see 4 November as the deadline in enforcing the sanctions on countries that continue to import Iranian oil. He provided little comfort in relation to India, but he did say “we will find an outcome that makes sense.”
The 2+2 meeting is a signal that India’s ties with the US are doing very well.
Prime Minister Modi may have had significant meetings with President Xi Jinping and Putin this year, but those are more by way of tactical adjustments to Indian policy whose basic thrust towards closer ties with the US has not changed. This is brought out by the fact that unlike the run-ins with other close allies and partners Trump has ensured that the Indian ties retain a certain primacy in his calculation. The US National Security Strategy issued last December has placed the Indo-Pacific region above Europe and Middle East in terms of American strategic priorities. The designation of India as a “major defence partner” in 2016 had underscored this, as has the more recent decision to put India in a list of countries eligible for Strategic Trade Authorisation Tier -1 licensee exemption.

Grey Areas

Despite the problems with H1B visas, Indian students are still flooding American universities in large numbers. US companies are doing good business in India and companies like Walmart and Amazon have major plans for India. There are trade issues lurking in the background, primarily related to the USD 23 billion surplus in favour of India. But, as Secretary Pompeo noted, India will attempt to make this up by importing aircraft and energy products from the US.
India has been one of the countries affected by the Trump Administration’s steel and aluminum tariff because it was exporting some USD 1.5 billion worth of steel and aluminum to the US annually.
New Delhi has threatened to retaliate, but deferred the implementation of counter-tariffs on a number of US products. Besides Harley Davidson motorcycles, India’s price caps on medical devices has also angered the Americans. It’s not clear whether the 2+2 dialogue took up these issues and found a way out.

India, Still a Key Anchor

Notwithstanding all the talk on shared values, democracy and so on, the US has no illusions about India emerging as any kind of a military ally in the region. The time for such alliances has long passed. What it is seeking is a strong and stable country which, in the words of US Defense Secretary James Mattis, will play a role “as a stabilizing force on the region’s geographic front lines.”
By simply being what it is, a large and economically dynamic entity, a significant military power, which broadly shares a world view with the US, India is seen as a key anchor of the western portion of the Indo-Pacific region ranging from South-east Asia to Eastern Africa.
The Quint September 7, 2018

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