New Delhi: In his outreach to the Indian-American community, US president-elect Joe Biden had boasted of his support for the India-US partnership under the Barack Obama administration – as well as being a key Democratic senator who pushed for the landmark India-US nuclear deal. His familiarity with India is given – but the changed international environment in which he will assume the presidency and the difficult economic conditions which prevail at home and abroad will more likely be the driver for his foreign policy priorities.
Regardless of who has been in power in Washington or Delhi, India’s relations with the US over the past two decades have largely remained politically smooth – with the only wrinkle being in trade and immigration issues. While market access has traditionally been a problematic area in the relationship, immigration issues flared up mainly during the Donald Trump administration.
Here is a quick primer on where things stand – and what could be the future moves – in three key aspects of the India-US relationship.
The US is India’s top trading partner with bilateral trade of $88.75 billion recorded in 2019-20, as per Indian government data. According to USTR data (which is calculated differently), total trade in goods and services for 2019 was over $146 billion.
In these four years, President Trump and Prime Minister Narendra Modi, despite their professed closeness, were not able to conclude a deal on trade – a development that both governments would see as a failure.
With a “big deal” remaining elusive, leaders in New Delhi and Washington have hinted a ‘mini’ trade deal was “almost there” to be clinched, for the past one year. But that never materialised. On September 27, commerce minister Piyush Goyal claimed that India was ready to seal the deal “tomorrow”, but the US government had gone into a slow mode due to COVID-19.
From June 2019, President Trump removed India from countries eligible for the Generalized System of Preferences (GSP), thus reinstating tariffs on certain Indian imports. The GSP exception was triggered by US industry complaints about India’s cap on the pricing of certain medical devices and strict rules for imported dairy products. It was after India lost its GSP preferential treatment that New Delhi retaliated to the import tariffs on steel and aluminium announced by US in 2018.
At the ministerial ‘2+2’ summit on October 30, the joint statement noted that there were “ongoing discussions” between India’s Ministry of Commerce and Industry on market access, removing trade barriers and ease of business.
What is Biden’s campaign position on foreign trade?
Biden published a ‘Made in America’ plan which proposes to restrict buying of steel, cement, concrete, building materials, and equipment from abroad.
A Wall Street Journal report notes that the biggest difference between the Biden and Trump administrations would be on trade relations with allies. With his self-declared focus on rebuilding the COVID-19 hit economy, Biden’s focus will certainly be on shoring up American firms.
There is also suspicion in foreign capitals that the Biden administration could continue many of Trump’s policies, The Economist pointed out, with Biden having remained silent on two matters – the WTO and tariffs imposed by the US. “Strategy might play a role: a Biden administration may want to dangle tariff reductions in return for concessions abroad. To America’s trading partners, that would feel rather familiar,” it wrote.
What could happen
India’s key ask from the incoming Biden administration would be the restoration of GSP benefits, as well as the removal of tariffs on steel and aluminium. However, there is very little likelihood of even a limited trade deal between India and the US happening in the near future. With a new United States Trade Representative (USTR) set to take charge, all talks with foreign governments will be reviewed first. According to well-informed observers of India-US ties, the main difference in the trade negotiating position would be the addition of issues like human rights and climate change, which New Delhi usually bats away as “extraneous matters”.
What has happened
In the run-up to the 2016 US presidential elections, Donald Trump’s views on the H-1B visa programme became a key plank of his divisive immigration agenda. During the campaign, Trump pledged to “end” the skilled visa programme, calling it “very, very bad” for American workers.
The ‘Buy American, Hire American’ order in April 2017 was the first salvo, which restricted the manner in which government bodies could hire foreign contractors. This was followed by significant tweaks to the H-1B visa policy that prevented entry-level Indian techies from acquiring the much-sought-after visa.
India’s IT industry, often criticised as an abuser of the US’s H-1B visa policy, bore the brunt of the Trump administration’s crackdown. The rejection rate, as documented by data put out by the US Citizenship and Immigration Services, has risen to record levels due to many of Trump’s changes. According to the USCIS, 24% of first-time H-1B applications were denied in Q3 2019 as compared to 6% in 2015.
In 2020, Trump raised the stakes dramatically by issuing a temporary ban on a range of worker visas (including H-1B) that are used by Indian IT and American technology companies. Many experts viewed this as a precursor to eliminating the lottery system that underpins the H-1B programme.
What is Biden’s campaign position on Immigration?
Two weeks after Trump imposed the ban on worker visas, Biden promised at a campaign rally that he will lift all of Trump’s restrictions if he was elected. His campaign website promises to expand the number of high-skilled visas and eliminate the country-based quotas “which create unacceptably long backlogs”. He had also assured that foreign students getting a doctorate in fields of Science, Technology, Engineering and Maths (STEM) will be exempted from any visa cap. “Biden believes that foreign graduates of a US doctoral program should be given a green card with their degree and that losing these highly trained workers to foreign economies is a disservice to our own economic competitiveness,” the president-elect’s campaign had pledged.
What could happen
Among all the priority areas for India, the issue of mobility for Indian workers may finally get some traction in the Biden administration. This had been a topic which was raised by India at various levels, but there the US government did not soften its stance in the last four years. Since the COVID-19 pandemic will continue to restrict movement of people, the removal of these quotas may not have an immediate impact – but could certainly be a ‘big ticket’ item to boast when President Biden and Prime Minister Narendra Modi have their first formal meeting.
India’s Strategic Environment
India’s biggest concern is the military stand-off with China which has continued for the past six months in the icy heights of eastern Himalayas – and is showing no signs of thawing. While the actual reason for the Chinese to transgress the Line of Actual Control is still not clear, there has been informed speculation that Beijing had been “unhappy” at New Delhi’s convergence with the US strategic goals in Asia and the Indo-Pacific.
The US’s worsening relations with China is therefore of utmost importance to New Delhi. It would also have a domino effect in the extended neighbourhood, where the dominance of China has led India to partner with the US to increase its presence through capacity building and infrastructure development.
In the immediate region, the US’s continued presence in Afghanistan – and the fate of the peace talks, is not only crucial for regional security but also would determine Washington’s relation with Pakistan.
Washington’s withdrawal from the six-nation nuclear deal and the imposition of oil sanctions on Iran negatively impacted India’s energy security, as well as the country’s strategic connectivity project of Chabahar port.
What is Biden’s position on India’s key strategic issues?
In a reply to a questionnaire to the Council of Foreign Relations, Biden had criticised Trump for “erratic” tariffs and praising President Xi Jinping’s handling of the coronavirus pandemic. His pitch was that he would be more effective against China as he would take along US allies to push back against Beijing on its human rights record and “high tech authoritarianism”.
In a likely reference to the situation to Ladakh, his campaign stated, “A Biden Administration will also work with India to support a rules-based and stable Indo-Pacific region in which no country, including China, is able to threaten its neighbors with impunity”
While Biden had also talked about the withdrawal of US troops from the “forever wars”, he had also stated that the US should end the war in Afghanistan “responsibly in a manner that ensures we both guard against threats to our homeland and never have to go back”. While there is no mention of Pakistan, Biden’s campaign promises include a statement that the incoming president “believes there can be no tolerance for terrorism in South Asia – cross-border or otherwise”.
Describing Trump’s policy on Iran as a “dangerous failure”, Biden has vowed to take steps to reverse it.
What could happen
The outgoing Trump administration had painted relations with China in stark good-evil terms. The Trumpian rhetorical flourish may disappear, but there is largely a bipartisan consensus in Washington that the time for a confrontation with China is right now. Therefore, there is not likely to be a major change in substance in Washington’s relations with Beijing, with the Biden administration also likely to be concerned about the spread of Chinese influence in critical advanced technologies. If China looks at relations with India through a US prism, then the Biden administration’s line and tone with Beijing could be the determining factor in the length of the stand-off at Ladakh.
During the Obama administration, Prime Minister Narendra Modi had taken a number of steps to reach out to Pakistan, including the visit to Lahore in 2015. It is likely that a Democratic administration may put pressure on New Delhi and Islamabad to bring down their mutual rhetoric and open channels for communications.
Any attempt to negotiate with Iran would depend not only on the mood in Tehran, but would again lead to loud protests from Saudi Arabia, UAE and Israel. Of course, UAE and Israel had signalled that they were putting all their eggs in the Trump basket when they signed the agreement to open diplomatic relations, just two months before the US presidential elections.
Biden’s foreign policy adviser Anthony Blinken said during an interaction with the Hudson Institute that from “Vice president Biden’s perspective, strengthening and deepening the relationship with India is going to be a very high priority”. He said in August, “It’s usually important to the future of the Indo-Pacific and the kind of order that we all want; it’s fair, stable, and hopefully increasingly democratic and it’s vital to being able to tackle some of these big global challenges.”
Blinken, a former deputy secretary of state, also added that the Biden administration is likely to have “real concerns” about some developments in India. He cited the “cracking down on freedom of movement and freedom of speech in Kashmir, some of the laws on citizenship”.
Indian observers expect that unlike the Trump administration – which had been relatively muted over Kashmir, the Citizenship (Amendment) Act and National Register of Citizens, President Biden is likely to be more vocal. President Trump had shrugged off a question about the Delhi riots that took place on the day of his visit to India in February this year. It is difficult to imagine that Biden would have made the same choice.
The last paragraph of Biden’s assurances to the Indian-American community dwelt on the core values of India and the US, which were identified as democracy, fair and free elections, equality under law and freedom of religion and expression. “These core principles have endured throughout each of our nations’ histories and will continue to be the source of our strength in the future”.
In his first year of presidency, Biden has stated that he will organise a summit of democracies, where countries will have to announce commitments in areas of anti-corruption, defending against authoritarianism and “advancing human rights in their own nations and abroad”.
With the Modi government increasingly seen in India and around the world as having made a clear authoritarian turn, navigating through any spotlight a new administration in Washington shines on human rights and the role of civil society in a democracy may become a challenge for New Delhi. However, the issue is unlikely to rock the basic strategic convergence between the two countries.
With inputs from Anuj Srivas.