External Affairs

Beyond the Hype on Indo-US Relations, It’s Been a Year of Incrementalism

The Wire compares US-India joint statements from 2015 and 2016 to assess the progress made in implementing decisions and highlight changes in priorities.

PM Narendra Modi with US President Barack Obama. Credit: PTI

PM Narendra Modi with US President Barack Obama. Credit: PTI

New Delhi: Given that their meeting in the Oval office yesterday was probably the last time Prime Minister Narendra Modi and US President Barack Obama would get together in a bilateral summit-context, both sides had to make some announcements. The defence sector got the lion’s share of attention, with the US recognising India as a ‘major defence partner’ and both countries finalising the text of the Logistics Exchange Memorandum of Agreement (LEMOA), a controversial document that will allow the US easier access to Indian military facilities. While Obama had perhaps hoped to crown the visit with a commitment from India to bring into force the Paris climate change pact in 2016 – his last full year in office – India made it clear that the process was too complicated to be completed within this period. On terror, the US and India reiterated their commitments on countering terror organisations, but for the first time, mentioned justice for the Pathankot attack in a bilateral document. While India and the US could not finalise the text on a joint framework on cyber relations during this visit, officials have been given a deadline of two months to wrap up and sign this major bilateral document. The South China Sea is not named per se, but figures implicitly, with both countries underscoring the importance of the freedom of navigation and overflight – which can only point to one country.

The Wire has compared the highlights of the latest joint statement of 2016 to last year’s bilateral document in order to assess the progress made in implementing decisions.

Defence

January 2015

“The President also welcomed the Prime Minister’s initiatives to liberalize the Foreign Direct Investment Policy regime in the defence sector and the Leaders agreed to cooperate on India’s efforts to establish a defence industrial base in India, including through initiatives like ‘Make in India’.”

June 2016

“Noting that the U.S.-India defence relationship can be an anchor of stability, and given the increasingly strengthened cooperation in defense, the United States hereby recognizes India as a Major Defence Partner. As such:

  • The United States will continue to work toward facilitating technology sharing with India to a level commensurate with that of its closest allies and partners. The leaders reached an understanding under which India would receive license-free access to a wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.

  • In support of India’s Make In India initiative, and to support the development of robust defence industries and their integration into the global supply chain, the United States will continue to facilitate the export of goods and technologies, consistent with US law, for projects, programs and joint ventures in support of official US-India defence cooperation.”

This, perhaps, is one of the biggest takeaways from Modi’s visit. Foreign secretary S. Jaishankar said that the new concept of ‘major defence partner’ shows the US’s “willingness to approach India in a much more holistic way”, in line with the objectives of ‘Make in India’. Under the current system, he told reporters in Washington, it is hard to execute the kind of defence projects envisaged by Make in India. The new concept is expected to change that. However, as the joint statement indicates, there are also caveats – such as India’s ‘commitment’ to improve its export control mechanism which will dictate the pace of treating New Delhi as ‘major defence partner’.

January 2015

“Prime Minister Modi and President Obama welcomed the efforts made by both sides to expand bilateral defence cooperation in areas of mutual interest and reaffirmed their commitment to continue to work towards deepening the bilateral defence relationship. The Leaders acknowledged bilateral military ties as the foundation of the defense relationship and encouraged their respective militaries to pursue additional opportunities for engagement through exercises, military personnel exchanges, and defense dialogues”.

June 2016

“…They expressed their desire to explore agreements which would facilitate further expansion of bilateral defense cooperation in practical ways. In this regard, they welcomed the finalization of the text of the Logistics Exchange Memorandum of Agreement (LEMOA).”

During the visit of US defence secretary Ashton Carter, India and the US agreed for the first time to “conclude” talks on LEMOA, which will allow for a ‘barter-like’ use of military facilities. The UPA government had stayed away from signing the logistics agreement with the US for 10 years, worried about the optics. Carter had said last year in April that the text could be finalised “in a month”. The two countries have now officially “finalised” the text, which according to the foreign secretary happened only in the run-up to the prime ministerial trip and therefore could not have been signed earlier. It still awaits the final signature.

Nuclear and nonproliferation issues

January 2015

“Noting that the Contact Group set up in September 2014 to advance implementation of bilateral civil nuclear cooperation has met three times in December and January, the Leaders welcomed the understandings reached on the issues of civil nuclear liability and administrative arrangements for civil nuclear cooperation, and looked forward to U.S.-built nuclear reactors contributing to India’s energy security at the earliest.”

June 2016

“The steps that the two governments have taken in the last two years through the U.S.-India Contact Group, including by addressing the nuclear liability issue, inter alia, through India’s ratification of the Convention on Supplementary Compensation for Nuclear Damage, have laid a strong foundation for a long-term partnership between U.S. and Indian companies for building nuclear power plants in India. Culminating a decade of partnership on civil nuclear issues, the leaders welcomed the start of preparatory work on site in India for six AP 1000 reactors to be built by Westinghouse and noted the intention of India and the U.S. Export-Import Bank to work together toward a competitive financing package for the project. Once completed, the project would be among the largest of its kind, fulfilling the promise of the U.S.-India civil nuclear agreement and demonstrating a shared commitment to meet India’s growing energy needs while reducing reliance on fossil fuels. Both sides welcomed the announcement by the Nuclear Power Corporation of India Ltd, and Westinghouse that engineering and site design work will begin immediately and the two sides will work toward finalizing the contractual arrangements by June 2017.”

The rather contentious hearing of the Senate foreign relations committee was largely due to frustration from Congress lawmakers that a contract for a US firm had yet to materialise from the decade-old US-India civil nuclear deal. The concrete number of six reactors in the joint statement could help dissipate some of the pressure, but there is still some way to go. The US said that the liability issue has been satisfactorily addressed with the creation of the nuclear insurance pool. However, Westinghouse apparently still has concerns, evident from the year-long deadline.

January 2015

“In a further effort to strengthen global nonproliferation and export control regimes, the President and the Prime Minister committed to continue to work towards India’s phased entry into the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement, and the Australia Group. The President reaffirmed the United States’ position that India meets MTCR requirements and is ready for NSG membership and that it supports India’s early application and eventual membership in all four regimes.”

June 2016

“Recalling their shared commitment to preventing proliferation of weapons of mass destruction and their means of delivery, the leaders looked forward to India’s imminent entry into the Missile Technology Control Regime. President Obama welcomed India’s application to join the Nuclear Suppliers Group (NSG), and re-affirmed that India is ready for membership. The United States called on NSG Participating Governments to support India’s application when it comes up at the NSG Plenary later this month. The United States also re-affirmed its support for India’s early membership of the Australia Group and Wassenaar Arrangement.”

One year on, India is now finally on its way to get entry into the MTCR, after none of the 34 members objected to a circulated text. This would help India get access to critical components for its space program as well as to sensitive defence technology like drones. An ‘extraordinary’ NSG plenary will take place on June 9 this week in Vienna, followed by another one later this month on June 28. While some countries in the ‘reluctant’ camp may change their mind, China has only hardened its opposition to India’s entry, unless there is a mechanism to bring in Pakistan.

China and the Asia-Pacific

January 2015

“Recognizing the important role that both countries play in promoting peace, prosperity, stability and security in the Asia-Pacific and Indian Ocean Region, and noting that India’s ‘Act East Policy’ and the United States’ rebalance to Asia provide opportunities for India, the United States, and other Asia-Pacific countries to work closely to strengthen regional ties, the Leaders announced a Joint Strategic Vision to guide their engagement in the region.

…Prime Minister Modi and President Obama expressed satisfaction over the efforts made by both countries to deepen cooperation in the field of maritime security, as reflected in the 2015 Framework for the U.S.-India Defense Relationship. To this end, they agreed that the navies of both sides would continue discussions to identify specific areas for expanding maritime cooperation. They also reiterated their commitment to upgrading their bilateral naval exercise MALABAR…”

June 2016

“The leaders applauded the completion of a roadmap for cooperation under the 2015 U.S.-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region, which will serve as a guide for collaboration in the years to come. They resolved that the United States and India should look to each other as priority partners in the Asia Pacific and the Indian Ocean region.

The leaders affirmed their support for U.S.-India cooperation in promoting maritime security. They reiterated the importance they attach to ensuring freedom of navigation and overflight and exploitation of resources as per international law, including the United Nations Convention on the Law of the Sea, and settlement of territorial disputes by peaceful means.”

In the 2014 joint statement with the US, India had for the first time explicitly addressed the South China Sea issue. Four months later, India and the US released the Joint Strategic Vision on Asia-Pacific and IOR, which led analysts in China to conclude that New Delhi had gone over to the American camp. While the 2015 joint statement didn’t mention the South China Sea, the vision document left no doubt: “We affirm the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea”.This year, the South China Sea dispute features only implicitly, with references to freedom of navigation and overflight, the United Nations Convention on the Law of the Sea and settling territorial issues by peaceful means, with no mention of the region itself. All three are well known diplomatic phrases used mainly in connection with the South China Sea, much to Beijing’s annoyance.

“Priority partner” is a new term coined this year, which will certainly receive special attention in a certain east Asian capital. It is conceptually a step forward from merely agreeing to align India’s ‘Act East’ policy and the US’s rebalance to Asia, but its practical implications have not been spelled out.

While Modi and Obama held their meetings, the Indian, US and Japanese navies were gearing up for the Malabar naval exercise from June 10 to 17. The exercise will be held close to the waters of Senkaku/Diaoyutai islands, claimed by both Beijing and Tokyo.

Climate change

January 2015

“…They also stressed the importance of working together and with other countries to conclude an ambitious climate agreement in Paris in 2015. To this end, they plan to cooperate closely over the next year to achieve a successful agreement in Paris…”

June 2016

“…Leadership from both countries helped galvanize global action to combat climate change and culminated in the historic Paris Agreement reached last December…India and the United States recognize the urgency of climate change and share the goal of enabling entry into force of the Paris Agreement as early as possible. The United States reaffirms its commitment to join the Agreement as soon as possible this year. India similarly has begun its processes to work toward this shared objective…”

President Obama’s phone call to Modi in the last few days on the tense CoP21 negotiations was one of the reasons the deal was salvaged, with India agreeing to the changes which made emission cuts by rich countries non-binding. It is not surprising then that Obama, with an eye towards his legacy, has tried to make climate change a central theme for Modi’s visit to the US. Before yesterday’s meeting, there was a buzz in the US media that India would be making a major announcement. The White House even went ahead and said that India had committed to implementation within this year. Jaishankar then poured cold water over this excitement by referring to the wording of the joint statement. While the US had committed to join CoP21 “as soon as possible this year”, India only mentioned work towards a “shared objective”, with the objective being to enable entry “as early as possible”.

Jaishankar said that implementing India’s Intended Nationally Determined Contributions (INDC) was a “hugely complicated” endeavour, which required changes in legislation from electricity to motor vehicles and aviation. “It has cascading implications,” he said. While developed countries may have better capacity, India can only go at its own speed, he indicated. “In India, we have to look at a range of issues, some of them regulatory, some of them legal. The concerned ministries are examining that,” he concluded, summing up India’s approach as “work in progress”.

January 2015

“…The President and Prime Minister reaffirmed their prior understanding from September 2014 concerning the phase down of HFCs and agreed to cooperate on making concrete progress in the Montreal Protocol this year.”

June 2016

“…In addition, the two countries resolved to work to adopt an HFC amendment in 2016 with increased financial support from donor countries to the Multilateral Fund to help developing countries with implementation, and an ambitious phasedown schedule, under the Montreal Protocol pursuant to the Dubai Pathway…”

In April 2015, India made a U-turn on its previous stance and agreed to a time-bound complete phaseout of hydrochlorofluorocarbons under the Montreal Protocol on ozone layer protection. This was apparently because of sustained pressure from the US, which had earlier persuaded China to also agree to bring down HFCs under the Montreal Protocol. The latest joint statement puts in black and white that there would be “increased” funds from richer countries to developing nations to compensate for the cost of the technology transition, in line with an amendment initiated by India.

Terrorism and Pakistan

 

January 2015

“The Leaders committed to undertake efforts to make the U.S.-India partnership a defining counterterrorism relationship for the 21st Century by deepening collaboration to combat the full spectrum of terrorist threats and keep their respective homelands and citizens safe from attacks. The Leaders reiterated their strong condemnation of terrorism in all its forms and manifestations with ‘zero tolerance’ and reaffirmed their deep concern over the continued threat posed by transnational terrorism including by groups like Al Qaida and the ISIL, and called for eliminating terrorist safe havens and infrastructure, disrupting terrorist networks and their financing, and stopping cross-border movement of terrorists.

The Leaders reaffirmed the need for joint and concerted efforts to disrupt entities such as Lashkar-e-Tayyiba, Jaish-e-Mohammad, D Company and the Haqqani Network, and agreed to continue ongoing efforts through the Homeland Security Dialogue as well as the next round of the U.S.-India Joint Working Group on Counter Terrorism in late 2015 to develop actionable elements of bilateral engagement. The two sides noted the recent U.S. sanctions against three D Company affiliates. The President and the Prime Minister further agreed to continue to work toward an agreement to share information on known and suspected terrorists. They also agreed to enter discussions to deepen collaboration on UN terrorist designations, and reiterated their call for Pakistan to bring the perpetrators of the November 2008 terrorist attack in Mumbai to justice.”

June 2016

“The leaders acknowledged the continued threat posed to human civilization by terrorism and condemn the recent terrorist incidents from Paris to Pathankot, from Brussels to Kabul. They resolved to redouble their efforts, bilaterally and with other like-minded countries, to bring to justice the perpetrators of terrorism anywhere in the world and the infrastructure that supports them.

Building on the January 2015 U.S.-India Joint Statement commitment to make the U.S.-India partnership a defining counterterrorism relationship for the 21st Century, as well as the September 2015 U.S.-India Joint Declaration on Combatting Terrorism, the leaders announced further steps to deepen collaboration against the full spectrum of terrorist threats.

The leaders committed to strengthen cooperation against terrorist threats from extremist groups, such as Al-Qa’ida, Da’esh/ISIL, Jaish-e Mohammad, Lashkar-e-Tayyiba, D Company and their affiliates, including through deepened collaboration on UN terrorist designations. In this context, they directed their officials to identify specific new areas of collaboration at the next meeting of U.S.–India Counterterrorism Joint Working Group.

Recognizing an important milestone in the U.S.-India counterterrorism partnership, the leaders applauded the finalization of an arrangement to facilitate the sharing of terrorist screening information. They also called for Pakistan to bring the perpetrators of the 2008 Mumbai and 2016 Pathankot terrorist attacks to justice.

The leaders affirmed their support for a UN Comprehensive Convention on International Terrorism that advances and strengthens the framework for global cooperation and reinforces that no cause or grievance justifies terrorism.”

Indian officials have been quick to point out that the US has, for the first time, equated the search for justice for the Pathankot airbase attack with that of the 2008 Mumbai attacks. This will certainly cause some unhappiness in Islamabad. Currently, resumption of India-Pakistan dialogues is on pause till the joint investigation team – which had visited the Pathankot base – gives its final report. The outcome of the report will influence whether New Delhi will move forward and let the two foreign secretaries meet to draw up a schedule. Interestingly, Afghan Taliban’s Haqqani network was dropped from the list of terror entities in the statement. The other new insertion in the statement, compared to last year, was US support for the India-sponsored Comprehensive Convention on International Terrorism, for which Modi has been lobbying hard during all his meetings with world leaders.

Cyber issues

January 2015

“The two sides also noted the growing cooperation between their law enforcement agencies, particularly in the areas of extradition and mutual legal assistance, to counter transnational criminal threats such as terrorism, narcotics, trafficking, financial and economic fraud, cybercrime, and transnational organised crime and pledged to enhance such cooperation further. The President and the Prime Minister also noted the serious risks to national and economic security from malicious cyber activity and agreed to cooperate on enhancing operational sharing of cyber threat information, examining how international law applies in cyberspace, and working together to build agreement on norms of responsible state behaviour.”

June 2016

“The leaders emphasized that cyberspace enables economic growth and development, and reaffirmed their commitment to an open, interoperable, secure, and reliable Internet, underpinned by the multistakeholder model of Internet governance. They committed to deepen cooperation on cybersecurity and welcomed the understanding reached to finalize the Framework for the U.S.-India Cyber Relationship in the near term. They committed to enhance cyber collaboration on critical infrastructure, cybercrime, and malicious cyber activity by state and non-state actors, capacity building, and cybersecurity research and development, and to continue discussions on all aspects of trade in technology and related services, including market access. They have committed to continue dialogue and engagement in Internet governance fora, including in ICANN, IGF and other venues, and to support active participation by all stakeholders of the two countries in these fora. The leaders committed to promote stability in cyberspace based on the applicability of international law including the United Nations Charter, the promotion of voluntary norms of responsible state behavior during peacetime, and the development and implementation of practical confidence building measures between states.

In this context, they affirmed their commitment to the voluntary norms that no country should conduct or knowingly support online activity that intentionally damages critical infrastructure or otherwise impairs the use of it to provide services to the public; that no country should conduct or knowingly support activity intended to prevent national computer security incident response teams from responding to cyber incidents, or use its own teams to enable online activity that is intended to do harm; that every country should cooperate, consistent with its domestic law and international obligations, with requests for assistance from other states in mitigating malicious cyber activity emanating from its territory; and that no country should conduct or knowingly support ICT-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to its companies or commercial sectors.”

Two substantive paragraphs devoted to cybersecurity in the India-US joint statement is a reflection of the push both sides have given to the sector. As The Wire had reported, officials from both sides have been working on a joint framework document, but last minute differences led to it not being signed during this trip. Instead, both sides agreed to finalise the framework document within two months. A factsheet, issued along with the joint statement, provided the “shared principles” for this framework. Among the top areas of cooperation to advance this “shared principle” is the sharing of information on a real time basis “when practical and consistent with existing bilateral arrangements, about malicious cybersecurity threats, attacks and activities, and establishing appropriate mechanisms to improve such information sharing”.

Economy and trade

January 2015

“The President and the Prime Minister affirmed their shared commitment to facilitating increased bilateral investment flows and fostering an open and predictable climate for investment. To this end, the Leaders instructed their officials to assess the prospects for moving forward with high-standard bilateral investment treaty discussions given their respective approaches.”

June 2016

There is no mention of the Bilateral Investment Treaty (BIT).

The complete lack of mention of the BIT is perhaps an indication that both sides recognise that the gap between the two model treaties is a bit too wide for a public commitment. This is despite the fact that the US-India Business Council had called on the US to relaunch negotiations for concluding a “high quality” BIT in the run-up to Modi’s visit.

January 2015

“The two sides agreed to hold a discussion on the elements required in both countries to pursue an India-US Totalisation Agreement.”

June 2016

“The leaders recognized the fruitful exchanges in August 2015 and June 2016 on the elements required in both countries to pursue a U.S.-India Totalization Agreement and resolved to continue discussions later this year.”

The first round of talks for finalising the totalisation agreement were held in August 2015, but the talks highlighted the gap between opinions of the two sides. According to media reports, the US was concerned that India did not qualify for the totalisation pact, as less than half of the population is covered by the social security system. However, the US is apparently keeping “talks alive on the issue to discuss new social security schemes that India may launch that could make it eligible for the agreement”.

January 2015

“Acknowledging the potential for technological cooperation in the rail sector in augmenting and optimizing India’s rail infrastructure, the Leaders agreed to facilitate U.S. Trade and Development Agency and Indian Railways technical cooperation that will assist Indian Railways’ efforts to modify its leasing and public-private partnership frameworks to attract private sector funding.”

June 2016

No mention in the joint statement.

While the joint statement did not talk of investment for upgrading railway infrastructure, a White House factsheet noted that the Indian railways awarded a contract of $2.6 billion to General Electric for locomotive engines. This was the largest ever order for the US firm in its 100 year history in the subcontinent.

January 2015

“Reaffirming their commitment to safety and security of civil aviation, the United States and India will continue consultations between the Federal Aviation Administration (FAA) and the India Directorate General of Civil Aviation (DGCA) to ensure international safety standards set by the International Civil Aviation Organisation (ICAO), with the aim of restoring Category I status at the earliest possible time.”

June 2016

No mention in the joint statement.

India’s Category-1 status was restored by the US aviation watchdog in April 2015. In February this year, the DGCA and the United States Trade and Development Agency signed an agreement for partial grant assistance to cover costs of the second phase of the programme and sustain aviation safety standards.

January 2015

 “The Leaders emphasised the importance of strengthening international financial institutions, including the International Monetary Fund. The President also affirmed his commitment to enhancing India’s voice and vote in international Financial Institutions and ensuring that resources are made available and used creatively through multilateral development banks for infrastructure financing.”

June 2016

No mention in the joint statement.

In January, IMF finally introduced long-pending quota reforms which increased voting shares of emerging countries and brought China, India, Brazil and Russia into the top ten largest countries. But the implementation of reforms agreed to in 2010 came very late. The tardiness in increasing the role of emerging countries was a key reason for the formation of the China-led Asian Infrastructure Investment Bank and BRICS’s New Development Bank. India became a founder-member of the AIIB, whose runaway success has left the US confused.