India-US Relations

 

Latest Context

To promote long-term supply chain stability and increase the security and defence cooperation between India and the United States, negotiations have been started for a 'Security of Supply' (SoS) arrangement and a 'Reciprocal Defence Procurement' (RDP) agreement Recently.

Key Facts:

• The objective of SoS agreement which is a bilateral or multilateral agreement between countries is to ensure the availability and stability of critical supplies, especially in the field of defence and security.
• India and the US also have an RDP agreement which is bilateral by nature in the field of defense procurement. Its objective is to promote reciprocal procurement of defense items in addition to promoting cooperation in research, development, and production of defense equipment.

Key Highlights of the Agreement

• Assembling Electric Jets in India: India and the US have discussed the deal for assembling General Electric GE-414 jets in India. It is yet to be finalized.
• Capacity Building and Infrastructure Development
• To build the capacity in addition to the Maritime Domain Awareness (MDA) and strategic infrastructure development.
• It also comprises the increased sourcing by US companies from India especially Boeing under the mega-civil aircraft deal with Air India. Furthermore, it also includes the establishment of Maintenance, Repair and Overhaul (MRO) facilities by US companies in India in order to cater to the equipment used by the Indian armed forces and the region.
• Defence Industrial Cooperation: India and the US concluded the roadmap for 'Defence Industrial Cooperation’ which will be the guiding principle for their policy orientation for the next few years. Under this mechanism, India and the US will identify opportunities for the co-development of new technologies and the co-production of existing and new systems in addition to promoting collaboration between defense start-up ecosystems.

US-India Defence Acceleration Ecosystem (INDUS-X): To advance cutting-edge technological cooperation between US and Indian companies, investors, start-up accelerators, and academic research institutions an initiative titled “INDUS-X” has been launched by the US-India Business Council.

The Trajectory of Indo-US Relations

• Introduction: The strategic partnership of U.S.-India is based on shared values comprising a commitment to democracy and upholding the rules-based world order. They share a common interest in promoting stability, global security, and economic prosperity by way of trade, investment, and connectivity.
• Economic Relations: The U.S. has become India's biggest trading partner in 2022-23 due to increasing economic ties which are growing day by day. The bilateral trade between India and the U.S. was USD 119.5 billion in 2021-22 which has increased by 7.65% to USD 128.55 in 2022-23. Exports to the U.S. was USD 76.18 billion in 2021-22 was increased by 2.81% to USD 78.31 billion in 2022-23.
• International Cooperations
• There is a very close cooperation between the US and India in various multilateral forums such as the United Nations, G-20, Association of Southeast Asian Nations (ASEAN) Regional Forum, International Monetary Fund, World Bank, and World Trade Organization.
• Furthermore, India joined the UN Security Council in 2021 for a two-year term which was welcomed by the US. In addition, the US also supports a reformed UN Security Council that includes India as a permanent member. Countries like Japan, the US, Australia and Japan, and India convened the QUAD in order to promote a free and open Indo-Pacific and provide tangible benefits to the region.
• India is also a very important member of the United States-led economic initiative Indo-Pacific Economic Framework for Prosperity (IPEF). In addition, India is also a member of the Indian Ocean Rim Association (IORA), at which the United States is a dialogue partner.

Way Forward

• In the forthcoming period, the partnership between India and the US is very critical to securing a free, open, and rules-bound Indo-Pacific region.
• Vast demographic dividend provides numerous occasions for the US and Indian firms for transfer of technology, manufacturing, trade and investment.
• Constantly growing stature of India as a leading player at the international level which is the result of unprecedented transformation at each level will proffer it numerous opportunities to advance its vital interests.