US-India relations come under strain
Posted on May 3rd, 2021

By P.K. Balachandran Courtesy Ceylon Today

India and the US have designated themselves as ‘strategic partners’ with political, economic and military dimensions to the relationship. But the partnership has kept coming under strain.

The reasons are two-fold: Firstly, its contours are not defined. Secondly, Washington’s ‘America First’ policy and its tendency to pursue a foreign policy almost exclusively in its own immediate interest, clashes with India’s penchant for maintaining ‘strategic autonomy’ despite its increasing economic and military dependence on the US.

Vaccine Raw Material Controversy

The latest irritant was the US refusal to supply raw materials to India for the manufacture COVID-19 vaccines. The US said that it needs the raw materials for its own manufacturing programme. The Biden Administration quoted a law under which an item could not be exported if the US need for it was not met first. A US spokesman even went to the extent of saying: It is not only in the US interest to see Americans vaccinated; but it is in the interests of the rest of the world to see Americans vaccinated.”

It was only when India argued its case at the highest level amidst an uproar in India that the US relented. In Indian eyes, the strategic partnership seemed to be lacking in moral content. It was not even transactional because India had gone out of the way to help America when the pandemic was doing its worst in the US.

Violation of Exclusive Economic Zone    

Earlier, the irritant was the intrusion of a US naval vessel into India’s Exclusive Economic Zone (EEZ) off the Lakshadweep islands in the Arabian Sea. The US 7th Fleet Commander announced that on 7th April 2021, the USS John Paul Jones (DDG53) (a guided-missile destroyer) asserted navigational rights and freedoms approximately 130 nautical miles west of the Lakshadweep Islands, inside India’s exclusive economic zone, without requesting India’s prior consent”.

The 7th Fleet further said this act was consistent with international law”. The statement added that India’s requirement of prior consent for military exercises or manoeuvres in its exclusive economic zone or continental shelf, was inconsistent with international law”. The US Navy asserted that the Freedom of Navigation Operation (FONOP) conducted by USS John Paul Jones upheld the rights, freedoms, and lawful uses of the sea recognized in international law by challenging India’s excessive maritime claims”.

For India, it was no consolation to be told that the US had conducted FONOP in the EEZs of its other allies like Japan, Thailand and South Korea. Ironically, India and Japan are part of the US-led Quad which is meant to safeguard lawful navigation (presumably as per the UN Law of the Sea) against any bid to bulldoze by any country (as China is allegedly doing in the South China Sea).

India countered the US position by stating that its stated position on the United Nations Convention on the Law of the Sea (UNCLOS) is that the convention does not authorize other states to carry out in the Exclusive Economic Zone and on the continental shelf, military exercises or manoeuvres, in particular, those involving the use of weapons or explosives, without the consent of the coastal State”. One of the reasons for the conflict is that while India has signed and ratified the UN Law of the Sea, the US has ratified it.

Apart from UNCLOS, there is the Indian Territorial Waters, Continental Shelf, Exclusive Economic Zone and others under Maritime Zones Act, 1976. Section 4(2) of this act allows foreign warships including submarines and other underwater vehicles to enter or pass through the territorial waters after giving prior notice to the Central Government.” These vessels are also required to navigate on the surface and show their flags.

According to a briefing paper of June 2017 by the Harvard Kennedy School, entitled: Freedom of Navigation in South China Sea: A Practical Guide”, over 40 states impose restrictions on the innocent passage of military ships, including requiring permission or notice prior to transit under innocent passage.

Strategic Partner 

India did not expect such an arrogant behaviour from a strategic partner. In 2016, the US had designated India as a Major Defence Partner. In 2018, India was elevated to Strategic Trade Authorization Tier 1” status, which allows India to receive license-free access to a wide range of military and dual-use technologies regulated by the US Department of Commerce. India and US have concluded the four defence and security related foundational agreements”, namely, the Logistics Exchange Memorandum of Agreement (LEMOA), the Communications, Compatibility and Security Agreement (COMCASA), the Industrial Security Agreement (ISA) and the Basic Exchange and Communication Agreement (BECA).

The US’ sale of weapons to India has gone up from near zero in 2008 to over US$ 20 billion in 2020. Therefore, as the seller, the US too has gained enormously from the partnership.

Foreign Currency Manipulator

In December 2020, the United States once again placed India in its monitoring list of countries with potentially questionable foreign exchange policies” and currency manipulation”. The term ‘currency manipulator’ is used against a country which the US feels is engaging in unfair currency practices” by deliberately devaluing its currency against the US dollar. Devaluation means that the country in question is artificially lowering the value of its currency to gain an unfair advantage over others. Devaluation would reduce the cost of exports from that country. The US Monitoring List also includes countries which account for a ‘large and disproportionate’ share of the overall US trade deficit. The US has a trade deficit of US$ 25 billion with India, which it is trying to narrow.

In 2019, the US withdrew the Trade Preference Programme from India and raised import tariffs to serve local interests as per President Trump’s ‘America First’ project. Trump’s plea was that the US had lost 4.2 million manufacturing jobs and created US$ 15 trillion in trade deficits over the last quarter century.

India lost by the withdrawal of the concession considerably. Over 12 percent (worth US$5.58 billion) of all Indian exports to the US in 2017 had benefitted under the GSP scheme. Hurt by the US step, India hiked its tariffs by 10 to 25% affecting about US$ 1.32 billion of US exports. The Modi government also imposed a 100% tax on Harley Davidson motorcycles, angering Trump. On his appeal, Modi reduced it to 50%. But this did not satisfy Trump.

India’s bid to maintain strategic balance

India has considerably reduced its traditional dependence on Russian weaponry, and has gone in for purchases from the US in a massive way. But it would not want to put all its eggs in the US basket. It is therefore maintaining military ties with Russia. In recent years, India and Russia have signed a number of additional defence deals across domains, including guided missile frigates, T-90 battle tanks, and lease of a nuclear-powered attack submarine.

India is keen on buying the S-400 missiles from Russia because it is considered the best for its needs. But the US has been sanctioning countries buying weapons from Russia as Russia is considered an enemy. President Biden has dubbed Russian President Vladimir Putin as a killer”. As a warning to India, sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA) were slapped on Turkey for the procurement of the S-400.

On April 27, Indian Prime Minister Narendra Modi spoke to President Putin, to thank him for Russia’s help and support in India’s fight against COVID-19 and also to discuss the establishment of a “2+2 ministerial dialogue” between the Foreign and Defence Ministers of India and Russia to add further momentum to the bilateral strategic partnership.

While arming itself with US weapons to face China and Pakistan, India is also negotiating with China on the border issue and is holding talks with Pakistan through the good offices of the United Arab Emirates.

One Response to “US-India relations come under strain”

  1. Nimal Says:

    India and Sri lanka must be neutral with respect to geopolitics. Don’t be favouring only one power, buy from everyone and sell to everyone, be like Singapore.

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