India-US Dialogue Deepens its Reach, With an Eye on OBOR and South China Sea

The US sees the relationship in the context of India’s larger role in Asia, first as a counter-weight to China, and then as a partner in the US-led order. India, unsure of its future role in the region, is mainly looking for transactional benefits.

Last Friday, the United States government signed the Logistics Exchange Memorandum of Agreement (LEMOA) and sent it to the Indian Embassy in Washington D.C., setting the stage for what is expected to be a significant week for India-US relations.

The India-US strategic and commercial dialogue (SCD) begins on Tuesday with Secretary of State John Kerry and commerce secretary Penny Pritzker representing the US and Sushma Swaraj and commerce minister Nirmala Sitharaman representing India. The assumption that the dialogue would be a listless affair given the imminent US presidential elections has been belied by the range of topics on the table. There is still no clarity at the time of writing that the LEMOA will be signed during defence minister Manohar Parikkar’s visit to Washington. The United States is keen to see the agreement through, but India may insist that the terms of the bilateral strategic relationship be well defined before the agreement is signed. The SCD joint statement, which Indian and US negotiators were poring over until late Monday evening, is likely to provide the first signs.

The base document for the strategic and commercial dialogue is the joint statement signed by Prime Minister Narendra Modi and President Barack Obama during Modi’s June visit to Washington. To begin with, New Delhi has sought clarity on the term ‘major defence partner’ – that appeared in the June declaration. The US may provide an explanation to include in the joint statement, but it appears India is using the SCD’s political mandate to limit the role of the LEMOA, which has been sold as a “foundational agreement”. This is a welcome move from New Delhi, and a course correction due after the LEMOA was dusted off and put back on track without any real thought given by the Indian side to the strategy that would underpin it.

Lingering smog from Modi’s last visit

On climate change and clean energy, similarly, the Indian side is reportedly keen not to repeat the June statement’s language on hydrofluoro carbons (HFCs). During Modi’s visit, India had spoken of “its resolve to work to adopt an HFC amendment in 2016 […] under the Montreal Protocol pursuant to the Dubai Pathway.” India also indicated its willingness to engage the “International Civil Aviation Organisation Assembly to reach a successful outcome to address greenhouse gas emissions from international aviation”. Both these statements were interpreted as India’s agreeing to move away from the UN Framework Convention on Climate Change (UNFCC) and work through bilateral and plurilateral arrangements to mitigate greenhouse gas emissions. New Delhi is now rightly seeking to secure the terms for financial assistance and technology transfer before committing to a mitigation document that will affect its own heavy industry and consumables sectors. Given that the Obama administration has invested significant political capital in this issue, and the fact that the June statement makes references to HFCs, it will be interesting to see if Washington concedes to India’s request.

The India-US framework agreement on cyber cooperation, an identical text of the “fact sheet” signed in June, is expected to be signed this week. But the SCD is also expected to move beyond issues addressed during the PM’s visit. The most politically sensitive lines of discussion this week will unmistakably revolve around China. For the first time, the US-India strategic dialogue is likely to venture into the subject of “regional connectivity” (read: One Belt, One Road).

Dragon in the room

Even if the subject of connectivity does not appear in the joint statement, it may feature during remarks made publicly by Kerry and Swaraj on the concluding day of the dialogue. For India, the issue of connectivity, with all the political implications it casts on China’s regional ambitions, is a tightrope walk. The foreign ministry’s line, articulated by foreign secretary S. Jaishankar as early as 2015, has been clear: unlike the Asian Infrastructure Investment Bank, India has not been consulted on OBOR, and therefore the question of joining this “unilateral” project does not arise. This line leaves room for Indian involvement in OBOR projects on a case-to-case basis, where the material benefits are substantial. On the other hand, the foreign secretary has also expressed his concern at OBOR “hard wiring” or locking the region into Chinese projects or China-friendly norms of engagement. It is this normative aspect that the Strategic and Commercial Dialogue will presumably address, although New Delhi should be sensitive to the optics of inviting the United States to weigh in on this issue prematurely.

The United States is also nudging India towards its own stand on the recent arbitral award issued by the Permanent Court of Arbitration in the South China Sea dispute between China and the Philippines.

India has taken “note” of the award, but unlike the US, New Delhi has not expressly asked the disputing parties to respect its “final and legally binding character”. In response to considering the US’s language on the South China Sea, India has asked that similarly strong language be introduced on Pakistan vis-a-vis terrorism. Even if these trade-offs were to happen, India would be getting apples for oranges. If the SCD were to invoke Pakistan’s responsibility to tackle cross-border terrorism, as the June statement did, it will be received well in New Delhi. But this is not comparable to the costs or benefits of escalating the South China Sea dispute – which is a function of India’s own perception of China’s role in the region.

The Strategic and Commercial Dialogue this week will raise the stakes for the bilateral relationship, making it necessary for both sides to lay their cards on the table on all the major issues confronting Asia, from the Middle East and Central Asia to the Pacific. The United States sees the bilateral relationship in the context of India’s larger role in Asia, first as a counter-weight to China, and then as a normative partner in the US-led order. India, yet unsure of its future role in the region, has sought limited and more transactional benefits from the relationship. The extent to which Beijing is implicated in this US-India discussion will be closely analysed in capitals across Asia, whether through the dialogue on regional connectivity or the South China Sea dispute. The prospect of scoring a political point over China or Pakistan may appeal to both sides. But it should not come at the cost of hard-earned progress made over difficult conversations on cyber, trade and climate – which are areas that will ultimately determine the trajectory of India-US relations.

Arun Mohan Sukumar heads the Cyber Initiative at the Observer Research Foundation

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