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Indo-American Relations

For many years now, even long after the end of the Cold War, India has had a love-hate relationship with the United States. Or rather a relationship based on mutual suspicion.

by Dr. Sudipta Narayan Roy  


Over the last decade however, that element of suspicion seems to have evaporated a bit as the US moves to contain the rising economic superiority of China and looks to India as a counter-balancing power in the region.
President Barack Obama’s visit to India in January 2015 and Prime Minister Narendra Modi’s visit to the United States in 2014 helped sort out many of the rough edges in the relationship.
The first big thaw in the relationship came with the Manmohan Singh government driven nuclear deal. The Indo-US nuclear deal signed in 2005 coming with a Nuclear Suppliers Group Waiver in 2008 has been one abiding bond between the two countries. Though there are still issues on the compensation that US or any foreign uranium or nuclear reactor suppliers will have to pay in case of an accident, the deal has created a long-term interest in each other.
According to the Ministry of External Affairs, “India-US bilateral relations have developed into a ‘global strategic partnership’, based on shared democratic values and increasing convergence of interests on bilateral, regional and global issues. The emphasis placed by the new government in India on development and good governance has created new opportunity to reinvigorate bilateral ties and enhance cooperation under the new motto ‘Chalein Saath Saath: Forward Together We Go’ , which was adopted following Prime Minister Modi’s first summit with President Obama on September 30, 2014, in Washington DC.”
However, the future strengthening of relationship will depend entirely on how business and commercial relations develop. Friction in the long-term relationship is likely to emerge if Donald Trump becomes the US President and cuts down totally on job outsourcing to IT companies based in India. Obama had also expressed concern on this and taxed American companies which are outsourcing jobs to India. Indian IT companies have no doubt taken away thousands of jobs in the US over the last decade. Also Indian engineers are finding jobs in Silicon Valley at lower salaries and there too the threat is real. But the big US companies do not really bother because the big technology of the present and future is with them.
At another level Indian IT companies are buying into US campanies thus pumping money into the Silicon Valley economy. In April 2016 itself, for instance, Infosys bought into Silcon Valley-based start-up Trifacta which will provide “data wrangling” solutions.

Over the past year-and-a-half, Infosys itself has invested in a bunch of early-stage US start-ups such as Waterline Data, WHOOP, CloudEndure, ANSR Consulting and Airviz Speck and spent at least $39 million from its $500-million venture fund in making these investments.
Other Indian companies like Wipro too have invested heavily in Silicon Valley technology showing that in this sector it is a mutually beneficial relationship which should not be rated on the basis of outsourcing and jobs alone. Also Indian engineering talent working in the US has made stellar contribution to the sector itself and many have risen to the top of the big companies.
Many US companies are also bullish about India and are investing big. Apart from Amazon which has budgeted about $2 billion into its e-commerce venture in India which is likely to score over Flipkart by this year end, other companies too are betting heavily on India.
One example is that of US major Cisco’s Executive Chairman John Chambers already committing $100 million into India. He feels that in the next ten years there is a $19 trillion possibility in India, according to a report in Forbes.
The US-India Business Council is focused on forging public and private partnerships between US businesses and companies and government groups in India according to one industry estimate. The idea is that big corporate investors in India like Google and Microsoft can reap financial benefits as the country adopts more technology.
These companies, in addition to other giants like Qualcomm and Cisco, have promised to help with upgrading the country’s Internet infrastructure and invest in Indian start-ups, according to Forbes report.


Strategic Front
Indo-US business relationship will only gather strength considering the huge investments that each country has made in the other. On the strategic front India has to contain China’s growth and also see that it doesn’t get too cosy with Pakistan. Despite being a terrorism factory, Pakistan has managed well in terms of international diplomacy in keeping China and US within hand-holding distance.
“China’s move to block sanctions on Pakistan for harbouring the notorious terrorist mastermind Zaki-ur-Rehman Lakhvi is the latest manifestation of the growing strength of the Beijing-Islamabad axis.
Prime Minister Nawaz Sharif has made efforts to strengthen Pakistan’s 60-year-old alliance with China a top priority. India needs a subtle response. The Chinese used their veto authority to block India’s attempt to pressure Pakistan for releasing Lakhvi from jail seven years after the Lashkar-e-Toiba attack on Mumbai in 2008,” according to analyst Bruce Riedel in Economic Times.
Beijing provides diplomatic support, economic investment and arms and technology for Pakistan. China’s support was essential to the development of the Pakistani nuclear arsenal. The centrepiece of the China connection now is the Chinese commitment to invest $46 billion in the construction of the China-Pakistan Economic Corridor (CPEC) to connect Kashgar in Xinjiang to Gwadar on the Arabian Sea.

India and US are big partners in the war against worldwide terrorism. This alone forms a substantial bond between the two countries.

So India is left with no option but to try to bring in the US pressure to work in the region. China getting closer to Pakistan is a good reason for the US to back India in the effort to stem the rising tide of terrorism in Pakistan and Afghanistan. Unfortunately for India, Afghanistan too seems to be slipping out of its hands.
But US too cannot be depended on eternally to bail out India at the UN and to occasionally cock a snook at Pakistan and China. India like many other countries has become dependent on China for many things. Most of the mobile phones marketed by upcoming companies like Micromax are made in China and the pricing advantage that such phones hold has helped make them top players in the market posing a challenge to even iPhone and Samsung. The US offers us no such advantage. Also the US economy will soon be in big trouble as some economists have predicted. The reason is that its debt has ballooned to $13 trillion almost parallel to its GDP of $14 trillion.
In the near to mid future the Indo-US relations looks like going stronger. There are no major irritants either at the political or business level. Also India and US are big partners in the war against worldwide terrorism. This alone forms a substantial bond between the two countries.

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