As India and the US prepare to hold their first “2+2” talks in Washington on 6 July, both sides are expected to look at ways to insulate their strategic partnership from recent irritants over trade protectionism, and the new sanctions on Russia that could imperil an Indian missile deal with Moscow.
The inaugural “2+2” dialogue, which was to be held in April, is a new format to sort out differences between India and the US. The event will see US secretary of state Mike Pompeo and defence secretary James Mattis sitting down with their Indian counterparts Sushma Swaraj and Nirmala Sitharaman, to focus on the strategic partnership. The talks are being seen as an outcome of the 26 June 2017 meet between Prime Minister Narendra Modi and US President Donald Trump in Washington —the first since Trump took office in January 2017.
With India mulling retaliatory measures following the US decision to impose tariffs on Indian steel and aluminium, trade disputes seem to be the most contentious issue at present. However, it could also cast a shadow on the larger India-US strategic relationship, said two Indian officials, requesting anonymity.
Trump’s public criticism of New Delhi’s tariffs on the iconic Harley-Davidson motorcycles has not gone down well in India. In February, at a gathering of governors of all states at the White House, Trump had slammed the high import duty on Harley-Davidson motorcycles by India. And he did it again last week on the sidelines of the G-7 summit in Canada. To add to this, the proposed cuts by the US in H-1B professional visas and cancellation of H4 spouse visas, besides India cutting prices on medical devices manufactured by US companies, have also contributed to the tensions between the two countries. In fact, the list of irritants seem to be steadily growing.
Indian trade minister Suresh Prabhu, who was in the US last week, said Friday that his talks with his counterparts were “positive.” Assistant US trade representative Mark Linscott is expected in India later this month to negotiate a “trade package”, which could include granting an extension to India on generalized system of preferences (GSP) that the US is currently reviewing.
India exports about 3,500 items worth $5.6 billion to the US at zero or low duties. In exchange, India may facilitate more US imports such as dairy products and Harley-Davidson motorcycles. “The India-US relationship is a high-maintenance relationship. One has to keep working on it,” said one of the two officials cited above. “We are hopeful that the US will review its position on India vis-…-vis trade.” The official added that so far, the strategic side of the relationship—views on Afghanistan and terrorism for example—seemed to be on firmer ground.
Another issue that is expected to figure in the “2+2” dialogue is the imposition of the new US law, Countering America’s Adversaries Through Sanctions Act, or CAATSA, which was passed last year. It includes sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors. India is keen on purchasing five S-400 Triumf air defence systems for around $4.5 billion from Russia, which US officials say could be considered as a significant military purchase and, hence, attract sanctions under CAATSA. “This is one of the issues that could come up, given that we would have the two defence ministers across the table,” said the second official cited above.
Though India has diversified its defence hardware purchases in recent times—buying equipment from the US, Israel and France, for example —a significant portion of its military uses armaments of Russian origin, which requires supplies of spares from Russia. “We have explained to the US that what we source from Russia is not used against US interests,” the second official added.
A third issue that is expected to be taken up at the “2+2” dialogue is the possible implications for India developing the Chabahar port in Iran after the US announced it was withdrawing from the 2015 Iran nuclear deal. “We would, I think, highlight that there is a congruity of interests here—stabilising Afghanistan,” said the second official. “If India is to assist Afghanistan economically, then Chabahar port development is a key part of that goal that India and the US share.”
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© 2018 the Mint (New Delhi)
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