India’s Prime Minister Narendra Modi and US President Trump are expected to meet on the sidelines of the fourteenth meeting of the G20 to be held from 28 to 29 June 2019 at Osaka, Japan. The meeting is crucial in a way that it comes at a time when US has created uncertainties and a disorderly atmosphere in the world by dumping multilateral agreements unilaterally, provoking and disrupting relations with its allies and applying unreasonable and aggravating economic pressures on countries that it calls ‘Rogue Nations’. US has also initiated a ‘Trade War’ with China which has the making of translating into a ‘Technology War’ with implications for the entire world. Escalation of trade war into a confrontation between US and China has the potentials of sucking India into the row.
The question is how is US likely to act in future in the light of its present attitude towards relationships in general, it’s likely comportment with India under conditions that affects its self interest or when India is threatened.
Though US has been calling India its ‘closest ally’ and a ‘major defence partner’, India has not been spared its share of unacceptable demands affecting its economy, relations with other countries and larger trade interests. US’ attitude towards India’s interests and concerns till now, the way it has dealt with its close allies and its commitment to international agreements do not inspire much confidence in its reliability. The question is how is US likely to act in future in the light of its present attitude towards relationships in general, it’s likely comportment with India under conditions that affects its self interest or when India is threatened. Is it worth getting closer to the country at the cost of our larger interests and our relationship with the others and to what extent?
In this article it is intended to bring out a few examples of US’ behaviour in dealing with countries to understand the possible situations in which India may be forced into and their implications for India’s larger interests.
US’ Attitude towards India
US has been pushing India for over a decade to sign the three ‘fundamental agreements’ which ostensibly promotes interoperability between militaries and guide sale of cutting-edge weapons and communication equipment. India signed the ‘Logistics Exchange Memorandum of Agreement (LEMOA)’on August 29, 2016 while the Communications Compatibility and Security Agreement (COMCASA) was signed during the Indo-US 2+2 dialogue on September 06, 2018. The third agreement, ‘Basic Exchange and Cooperation Agreement for Geo-spatial cooperation (BECA) is yet to be signed.
While linking sale of cutting edge weapons to India signing logistic arrangements is clearly illogical, the question of interoperability between militaries of India and US are farfetched unless India intends to become a front line state of the US, reminiscent of Pakistan in its war against the erstwhile Soviet Union in Afghanistan. The results of this arrangement and the damage it has done to Pakistan are there to see. As for LEMOA, it is the US military which is likely to access Indian facilities in the Indian Ocean for refueling and replenishment purposes in its operations against China. The circumstances that are likely to present themselves in a war situation in a future date and the desirability of providing logistic support to either militaries engaged in a war cannot be predicted or determined at this stage. The cost of providing logistic support to one of the two countries engaged in war has its implications for India.
…Communication interoperability between the militaries of India and US is redundant and undoubtedly compromises India’s communication security.
As for COMCASA, it purportedly allows India to procure specialised equipment for encrypted communication for US origin military platforms like C-17, C-130 and P-81s. The question is isn’t the vender expected to provide reliable communication equipment as per specifications if so demanded and contracted for? With India wanting to promote ‘Make in India’ and one of its major Public Sector Enterprise involved in manufacturing high technology communication equipment, what is wrong in procuring commercially available communication systems specially tailored to meet our requirements in these platforms? Communication interoperability between the militaries of India and US is redundant and undoubtedly compromises India’s communication security.
Despite these implications India signed these fundamental agreements signaling a very close partnership with the US startling the world. Has US shown any understanding of these compromises in its dealings with India?
Trade Issues
In a move which was nothing more than symbolism, US rechristened its ‘Pacific Command’, the ‘US Indo-Pacific Command’, underscoring the growing importance of India in US’ scheme of things but chose to repeatedly delay the much touted 2+2 dialogue. The meetings was scheduled for April 2018 between the Defence and the Foreign Ministers of India and US and address the growing differences over the Iran Nuclear Deal and the brewing tariff war between the two countries. The postponements were seen as a sign of growing attenuation of US’ interest in India relations and Trump’s move back to US’ erstwhile AfPak centric South Asia Policy resulting in US moving closer to Pakistan at the cost of India relations.
In March 2018, US announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum that hurt India. US granted exemption to Argentina, European Union, Australia, Brazil, Canada, Mexico and S Korea but chose not to accede to India’s request for relief.
After putting India on notice of its intent to terminate the country’s designation as a ‘beneficiary developing nation’ under the key Generalised System of Preference (GSP) trade programme on March 04 2019, US Administration withdrew GSP benefits to India with effect from June 05, 2019. During the meetings after India was put on notice, US had demanded that India allow imports of agriculture, milk, and poultry products from US. Obviously US chose to ignore India’s domestic interests and compulsions. With US remaining adamant, India has decided to impose retaliatory tariffs on import of 29 US products.
US dumped its pet project Trans Pacific Partnership (TPP). Is there any guarantee it will stay put in its Indo-Pacific strategy?
While on a visit to India, US Commerce Secretary Wilbur Ross besides accusing India of imposing restrictive trade policies that burden foreign companies, warned that any retaliatory tariffs by India in response to US withdrawal of some trade privileges from India will not be appreciated. While US sees no problem in imposing tariffs on other countries unilaterally, it expects others to comply with its dictates without any retaliation.
India’s relations with Iran
US unilaterally pulled out of the July 2015 Joint Comprehensive Plan of Action (JCPOA) popularly called the Iran Nuclear Deal reached between Iran and the P5+1 and endorsed by the UN Security Council Resolution 2231. Consequently on November 05, 2018, US reimposed sanctions on Iran that had been lifted under the JCPOA.
The question is will US that unilaterally withdraws from an international agreement endorsed by the UN Security Council and brokered by seven countries remain committed to bilateral agreements with India? What if it abandons agreements at a crucial moment and remains a mute spectator as it did in the case of Philippines when in 2012 China effectively seized control of Scarborough Shoal and built artificial islands in the reef and militarised them despite US and the Philippines signing a mutual defense treaty in 1951 and written assurances? US dumped its pet project Trans Pacific Partnership (TPP). Is there any guarantee it will stay put in its Indo-Pacific strategy?
US sanctions re-imposed on August 7, 2018 is a part of a larger move to cut off the country from the international financial system. US sanctions are extra-territorial, implying that in addition to prohibiting US persons and entities from doing business with Iran, non-US firms and financial entities that do not comply with US sanctions could also be cut off from the American-controlled global financial system. With a view to choke Iran’s economy, import of oil from Iran was also made sanctionable from November 04, 2018.
Inflicting sanctions on third countries based on its domestic laws which are brought into play to impose sanctions on a country to which it is opposed, are illegal. There are no legal bases to justify such application. UN General Assembly resolutions here, here and here have condemned them as “coercive measures” and has called for the immediate repeal of unilateral extraterritorial laws that impose sanctions on companies and nationals of other States.
At a time when Iran is in dire need to sell its oil for survival, India ending oil purchases will have serious repercussions for India’s relations with the country and our ambitions of land connectivity to the North through Chabahar port.
US which granted temporary waiver to India and seven other countries to purchase Iranian oil was finally withdrawn in May 2019. India imports 10 percent of its oil from Iran which provides 60 days of credit for purchases, a facility not available from other suppliers such as Saudi Arabia, Kuwait, Iraq, Nigeria and the US. Iran also offers attractive insurance and shipping terms.
Should India accept such illegal actions at the cost of the country’s economy and energy security interests and still try to build closer relations with the US which amounts to the country becoming a ‘Junior Partner ‘of US?
At a time when Iran is in dire need to sell its oil for survival, India ending oil purchases will have serious repercussions for India’s relations with the country and our ambitions of land connectivity to the North through Chabahar port. To add fuel to fire US Ambassador to the UN Nikki Haley on a visit to India urged India to reconsider its ties to Iran.
India’s larger interest lies in maintaining cordial relationship with Iran at a time when it is under tremendous economic pressure due to sanctions. Being a peninsular country with road connectivity limited to the East, which also is yet to be fully developed and operationalised, speeding up the Chabahar Port project besides linking up with the International North South Trade Corridor (INSTC) to connect with Central Asian Countries, Russia, Europe and Afghanistan bypassing Pakistan will reduce travel time compared to the present shipping mode of transportation, spur India’s trade, and boost economy.
Iran’s Foreign Minister Javad Zarif during his visit to Islamabad in March 2018 is said to have welcomed Chinese and Pakistani investment in Chabahar. Under conditions of US sanctions, investment by China in Chabahar would be preferred by Iran as that would speed up the port project helping Iran overcome its present economic situation. Earlier in January 2016 Pakistan and Iran had also decided to lay railway track to connect Gwadar with the Iranian port city of Chabahar. Piqued by US Trade war, last week Chinese President Xi Jinping had stated in Bishkek that Beijing was ready to join efforts with Tehran in promoting a steady development of bilateral comprehensive strategic partnership. That could have implications for India-Iran relationship and our Chabahar ambitions.
India agreed to help Iran expand Chabahar port way back in 2003 to construct two terminals — a multipurpose cargo terminal and a container terminal. Progress slowed particularly as Western nations imposed sanctions on Iran and a dispute over payment of $30 million exercise duties on port equipment imported into Iran.
Threat of Chinese BRI demolishing India’s hopes for Road Connectivity to the North
The Iranian government has supported the Belt and Road Initiative and has been in discussion with the Chinese government on the issue. Speaker of the Iranian Parliament Ali Larijani during a visit to China with a parliamentary delegation, in an address to a gathering of professors and students of Renmin University of China in February 2019 had conveyed the Iranian Parliament’s readiness for using the parliamentary potential of Iran to take forward mutual cooperation in the One Belt, One Road project.
Even under sanctions Chinese investments made its way to Iran, strengthening Sino-Iran relationship.
Iran’s geographical location which acts as a link between Chinese Western provinces and Europe with access to Persian Gulf makes it an important element in the China-Central-West-Asian Economic Corridor (CCWAEC) of the Chinese BRI project. Railway connections from Turkey westwards and ground transportation network connecting Tehran to Central Asian countries, Afghanistan and China makes it a desirable candidate for China’s BRI.
There is already a direct freight train between China and Iran. The rail route, also known as the New Silk Road, stretches 2,300 kilometers from Urumqi in western China’s Xinjiang Uygur autonomous region to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, cutting transportation to 14 to 15 days, compared with 45 to 50 days by sea.
The almost complete absence of American influence and the availability of cheap crude oil in Iran, draws China into a closer relationship with Iran, as a strategic partner. Even under sanctions Chinese investments made its way to Iran, strengthening Sino-Iran relationship.
Considering these possibilities, by demanding that India end import of oil from Iran and reconsider its relations with Iran, US has shown utter lack of understanding of India’s interests and concerns. It is more than obvious that US’ actions are exclusively self interest oriented. Can India depend on US?
Please wait...
Extremely well written detailed article. It’s an eye opener. Our policy maker should give a thinking on all the aspects so we’ll explained and decide prudently.
Extremely well written and thought provoking Article
India isn’t a small fry.
US is the First Nation to recognise that India is prosperous now and has taken us off the list of GSP.
On Arms exporting nations, any Indian political party which can whip the “Desh khatre mein hai “ in perfect Bollywood style, will be given max financial support for funding for its elections via pathbreaking initiative of India , the “ ELECTORAL BONDS “ .
Such a political party can nevertheless lose.
In addition, I am of the opinion that the meteoric rise of China had overwhelmed . With Russia yet to find its feet, we got scared of being totally sidelined/ undermined in Asia by the Chinese might.
Therefore we , though China being w largest trading partner, largest neighbor etc , decided to join the US bandwagon to counter China.
And are now caught in the vicious trap of Arms imports to counter China.
For that matter, none of the UNSC permanent members woukd want Indi- Pak enimity to die down.
Keeping alive Raging animosity between these two nations makes good business sense for them.
A well researched and interesting article which covers the pros and cons of the present state of Indo -US relations and its future implications on our security, economy and relations with other countries including Iran, China,Russia and Gulf states. It may not happen that we are exploited by the slippery Trump politics and at the time of need are left to fend for ourselves.
India is at the top of the Global Arms Importers list and accounts for 13% of world’s total Arms imports. 65% of the Arms inventory of India is made up imported equipment with Russia and Israel topping as list of suppliers .Between 2011 -16, Arms imports have increased by 43%.
Being one of the best performing economies of the world, India ‘s Defence Budget allocations will increase , as a fast developing India faces new challenges to its Security.
I am of the opinion that the warming up of ties from US which started from Civil Nuclear Deal followed by being member of QUAD, 2+2 Agreement, increase in Joint Exercises, supporting India in getting JeM chief declared a Global Terrorist etc, are all US efforts to woo India with a view to become its major Arms supplier .
After all its a known fact that US Arms lobby is the strongest body that influences US policy making and guides the Foreign relations , all with a view to sell more Arms.
Towards this end it won’t be out of place to mention that it is unlikely that it will ensure peace between India and Pakistan also , as peaceful borders in this region means less spending on Arms import .
The question is are we in the US camp now.
By demanding that India end import of oil from Iran and reconsider its relations with Iran, US has shown utter lack of understanding of India’s interests and concerns. It is more than obvious that US’ actions are exclusively self (Russian) interest oriented.
Just think of Trump as someone who takes care of Russian interest, to weaken America, even at the cost of strengthening china.
Punishing INDIA for reducing dependence on russian arms and increasing US arm share.
Weakening of NATO- Breaking tukey out and weakening other members.
Weakening EU by breaking UK out.
The list is Long.
With the above assumptions all pieces fit well to clear the fog.
Trump may not go down in the history as biggest ally/spy but surely he is under enough cloud. Republicans may or May not agree because their survival will be at stake with this kind of admittance.
A very balanced and well researched article… Time for India to weigh all options and pursue own interests.