Speaking in New Delhi recently, Nikki Haley, U.S. ambassador to the United Nations, characterized the U.S.-India relationship as a high priority one saying, “Perhaps no other partnership has as much potential for global peace and prosperity over the next 10, 20, or 50 years.”
In reality, despite being a high priority, significant challenges remain for the relationship that require both sides to address, and recent developments have only compounded some of these. That was most recently demonstrated by the fact that even a supposedly regular mechanism such as the U.S.-India inaugural “2+2 dialogue” was postponed.
The U.S. Embassy in India issued a short statement saying that the dialogue postponement was “prompted by reasons entirely unrelated to the bilateral relationship.” As this article went to publication, reports indicate that Secretary of State Mike Pompeo will be travelling to North Korea next week, which suggests a possible reason for the postponement.
Irrespective of the details, the big picture is clear: even as Trump administration officials have reiterated that India is a priority country and high on the agenda, this is the second time that this new dialogue has been postponed within a year of its formulation.
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This new dialogue initiative between India and the United States was agreed upon by the two sides during the visit of Prime Minister Narendra Modi to the United States in June 2017. Before the postponement, India’s Foreign Minister Sushma Swaraj and Defense Minister Nirmala Sitharaman were to travel to Washington, D.C. for this inaugural dialogue, where a number of tricky but significant issues were to be taken up.
The dialogue was meant to re-energize the relationship against the backdrop of a possible downward trend in trade and economic ties. It was also critical in the context of possible strains over the CAATSA (Countering America’s Adversaries Through Sanctions Act) issue – a law passed by the United States in August 2017 and which came into effect in January this year. CAATSA penalizes entities that undertake significant transactions with Russia in the intelligence or defense sectors. New Delhi engages Moscow on both these fronts, with the defense sector being more critical.
While U.S.-India relations have broadly been on the right track, there are clearly some troubles ahead. The postponement will add one more issue to the mix, particularly with respect to the ever-lingering perception that the United States is not giving sufficient importance to India. It will also add to the existing issues that were already slated to be discussed. Rescheduling the dialogue is not an insignificant task because a number of bilateral issues need attention now and could exacerbate if they are not addressed soon.
As an example, on the economic front, India announced last week that it will impose retaliatory tariff on 29 U.S. products that will take effect on August 4, in response to unilateral U.S. imposition of higher import duties on steel and aluminum from India. India had earlier asked the U.S. government to make an exemption for India but Washington did not heed the request.
The U.S. duties will increase the cost of steel exports to the United States by $198.6 million and aluminum exports by $42.4 million. India in this regard is also reported to be taking the United States to the World Trade Organization (WTO) dispute settlement mechanism. This could galvanize support from other countries as well, including the European Union (EU) and China. After a month of verbal retaliation, the EU has also begun taking more concrete steps. Japan, Mexico, Canada, and other countries are also considering similar responses to the U.S. imposition of duties. China has already imposed a series of measures targeting the United States, to which President Donald Trump has already threatened to retaliate.
The overall impact of these measures is unpredictable but potentially quite dangerous. More worryingly, the trade war is also bringing China and U.S. allies and partners together, thus strengthening Beijing and weakening efforts to counter its other more aggressive political and military tendencies.
Another reason for a quick rescheduling of the 2+2 dialogue is because of the CAATSA headache. Though New Delhi has diversified its defense trade partners, Moscow continues to dominate the Indian defense inventory to the tune of about 70 percent. Further, India’s plans to acquire important platforms including the S-400 air defense systems could run into serious problems.
Even as the CAATSA sanctions are not aimed at India, its security implications for India will be significant given the continuing Indian dependence on Russia for defense equipment. Congressman Joe Crowley, the House Democratic Caucus chairman recently ousted in a primary, while speaking at a U.S.-India Friendship event stated that CAATSA “is a serious issue that needs to be dealt [with]. There needs to be a dialogue between the U.S. and India. Our goal is not to sanction India.” He added that “understanding the needs that India has as a nation for self-defense as well … has to be taken into consideration.”
Given that the S-400 deal with Russia is an important one for New Delhi from a national security perspective, this is likely to be an issue at the 2+2 dialogue. Acknowledging this, Nisha Desai Biswal, the former assistant secretary of state for South and Central Asia and the current president of the U.S.-India Business Council said, “It is something that we are all mindful of and looking at very very carefully. But I do think that we need to acknowledge and address the continuing importance for India of its relationship with Russia and how we how we manage the way forward on that issue.”
If the United States wants a strong India as its partner, Washington cannot come up with such blanket sanctions that might hamper its defense capacity-building. This could also increase some of the fears that the United States is not a credible and secure defense partner.
A third issue that needs attention is the Communications, Compatibility, Security Agreement (COMCASA), an agreement that will offer a legal framework for India to obtain more secure, encrypted, and advanced communication equipment from the United States. This would in turn create better interoperability between the two militaries as also with other militaries that use U.S.-origin platforms with similar communication links.
The framework agreement, originally called the Communication and Information on Security Memorandum of Agreement (CISMOA) was changed to COMCASA to suit India-specific requirements. This is part of the three foundational agreements that the United States has sought with India in order to further the India-U.S. defense partnership. India in August 2016 signed the Logistics Exchange Memorandum of Agreement (LEMOA), which was earlier called the Logistics Services Agreement (LSA).
Looking at the slow pace with which India approached the LEMOA and the negotiations underway for signing the COMCASA, the third agreement, Basic Exchange and Cooperation Agreement for Geospatial Cooperation (BECA) will be a long off. Reports indicate that India and the United States are closer to signing the COMCASA, and officials familiar with the negotiations say that it only needs the political will to sign. A lot of ground was believed to be covered during the visit of Foreign Secretary Vijay Gokhale and Defense Secretary Sanjay Mitra to the United States earlier in April.
These agreements are significant because they are critical for aspects of cooperation to go forward. As an example, India’s plans to buy Guardian Avenger armed drones from the United States cannot be expected to progress if COMCASA is not signed.
It is unclear if there are technical glitches to India signing the agreement. Some reports indicate that India is concerned about possible “intrusive American access to Indian military communication systems, and about the violation of Indian sovereignty due to visits by U.S. inspectors to Indian bases to inspect the COMCASA-safeguarded equipment.” It is also argued that India’s Russian dominant defense inventory “may not be compatible” with COMCASA. But like LEMOA, the Indian opposition is almost entirely political in nature.
While each of these issues can be problematic, both New Delhi and Washington need to be mindful of the larger Asian strategic issues that have brought the two closer in the first place. If the United States wants to see a capable India that is able to balance China in an effective manner, Washington has to become more understanding of some of India’s choices. Equally, New Delhi needs to be more pragmatic about which fights it wants to pick with the United States on what issue and what it stands to lose.
Whether the two sides can accomplish this is the question. Postponing the dialogue may have been unavoidable, but it does not help either India or the United States in working out a path forward.
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