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'''Indo-American relations''' refers to the [[Bilateralism|bilateral]] [[international relations|relations]] between the [[United States of America]] and the [[Republic of India]].
'''Indo-American relations''' refers to the [[Bilateralism|bilateral]] [[international relations|relations]] between the [[United States of America]] and the [[Republic of India]].


During the [[Cold War]], India, though being one of the pioneers and founding members of the [[Non-Aligned Movement]], developed a closer relationship with the [[Soviet Union]]. India's strong relations with Moscow and the growing closeness between the United States and [[Pakistan]], India's historic enemy, estranged bilateral diplomacy between India and the U.S. for many years. The [[collapse of the Soviet Union]] caused India to review its [[Foreign relations of India|foreign policy]] following which, it took steps to develop closer ties with the [[European Union]] and the United States.
During the [[Cold War]], India, though being one of the pioneers and founding members of the [[Non-Aligned Movement]], developed a closer relationship with the [[Soviet Union]]. India's strong relations with Moscow and the growing closeness between the United States and [[Pakistan]], India's historic enemy, estranged bilateral diplomacy between India and the U.S. for many years. The [[collapse of the Soviet Union]] caused India to review its [[Foreign relations of India|foreign policy]] following which, it took steps to develop closer ties with the [[European Union]] and the United States. Today, India and the U.S. share an extensive strategic and economic relationship.<ref>[http://www.fas.org/sgp/crs/row/RL34161.pdf India-U.S. Economic and Trade Relations]</ref><ref>[http://www.comw.org/pda/0603india.html The Evolving India-U.S. Strategic Relationship]</ref>


During the tenure of the [[Clinton administration|Clinton]] and [[George W. Bush administration|Bush administration]], relations between India and the United States blossomed primarily over common concerns regarding growing [[Islamic extremism]], energy security and climate change.<ref name=autogenerated1>[http://www.columbia.edu/cu/alliance/documents/Homepage/Paper-Jaffrelot.pdf]</ref> Following the election of [[Barack Obama]] as the U.S. President in 2009, there was a downturn in India-U.S. relations primarily due to [[Obama administration]]'s desire to increase relations with China,<ref>[http://www.atimes.com/atimes/South_Asia/KC14Df01.html India frets over Obama's Chinamania]</ref> and Barack Obama's [[protectionism|protectionist policies]] to deal with the [[Global financial crisis of 2008–2009|economic crisis]].<ref>[http://www.reuters.com/article/usDollarRpt/idUSDEL6434120090306 India renews criticism of "Buy American" drift]</ref> Today, India and the U.S. share an extensive strategic<ref>[http://www.comw.org/pda/0603india.html The Evolving India-U.S. Strategic Relationship]</ref> and economic<ref>[http://www.fas.org/sgp/crs/row/RL34161.pdf India-U.S. Economic and Trade Relations]</ref> relationship.
During the tenure of the [[Clinton administration|Clinton]] and [[George W. Bush administration|Bush administration]], relations between India and the United States blossomed primarily over common concerns regarding growing [[Islamic extremism]], energy security and climate change.<ref name=autogenerated1>[http://www.columbia.edu/cu/alliance/documents/Homepage/Paper-Jaffrelot.pdf]</ref> Following the election of [[Barack Obama]] as the U.S. President in 2009, there was a downturn in India-U.S. relations primarily due to [[Obama administration]]'s desire to increase relations with China,<ref>[http://www.atimes.com/atimes/South_Asia/KC14Df01.html India frets over Obama's Chinamania]</ref> and Barack Obama's [[protectionism|protectionist policies]] to deal with the [[Global financial crisis of 2008–2009|economic crisis]].<ref>[http://www.reuters.com/article/usDollarRpt/idUSDEL6434120090306 India renews criticism of "Buy American" drift]</ref>


==History==
==History==

Revision as of 12:18, 28 March 2009

Indo-American relations

India
United States

Indo-American relations refers to the bilateral relations between the United States of America and the Republic of India.

During the Cold War, India, though being one of the pioneers and founding members of the Non-Aligned Movement, developed a closer relationship with the Soviet Union. India's strong relations with Moscow and the growing closeness between the United States and Pakistan, India's historic enemy, estranged bilateral diplomacy between India and the U.S. for many years. The collapse of the Soviet Union caused India to review its foreign policy following which, it took steps to develop closer ties with the European Union and the United States. Today, India and the U.S. share an extensive strategic and economic relationship.[1][2]

During the tenure of the Clinton and Bush administration, relations between India and the United States blossomed primarily over common concerns regarding growing Islamic extremism, energy security and climate change.[3] Following the election of Barack Obama as the U.S. President in 2009, there was a downturn in India-U.S. relations primarily due to Obama administration's desire to increase relations with China,[4] and Barack Obama's protectionist policies to deal with the economic crisis.[5]

History

Swami Vivekananda in Chicago, 1893.

The historic relationship between India and the United states was very strong. One event is the visit of Swami Vivekananda who introduced Yoga and Vedanta to America. Vivekananda was the first known Hindu Sage to come to the West, where he introduced Eastern thought at the World's Parliament of Religions, in connection with the World's Fair in Chicago, in 1893. Here, his first lecture, which started with this line "Sisters and Brothers of America," [2] made the audience clap for two minutes just to the address, for prior to this seminal speech, the audience was always used to this opening address: "Ladies and Gentlemen". It was this speech that catapulted him to fame by his wide audiences in Chicago and then later everywhere else in America, including far-flung places such as Memphis, Boston, San Francisco, New York, Los Angeles, and St. Louis.

After Indian independence until the end of the cold war, the relationship between the two nations has often been thorny. Dwight Eisenhower was the first US President to visit India in 1959. He was so supportive of India that the New York Times remarked "It did not seem to matter much whether Nehru had actually requested or been given a guarantee that the US would help India to meet further Chinese communist aggression. What mattered was the obvious strengthening of Indian-American friendship to a point where no such guarantee was necessary."

During John F. Kennedy's period as President, he saw India as a strategic partner against the rise of communist China. He said "Chinese Communists have been moving ahead the last 10 years. India has been making some progress, but if India does not succeed with her 450 million people, if she can't make freedom work, then people around the world are going to determine, particularly in the underdeveloped world, that the only way they can develop their resources is through the Communist system."

From 1961 to 1963 there was a promise to help set up a large steel mill in Bokaro that was withdrawn by the U.S. The 1965 and 1971 Indo-Pakistani wars did not help their relations. During the Cold War, the US asked for Pakistan's help because India was seen to lean towards the Soviet Union. Later, when India would not agree to support the anti-Soviet operation in Afghanistan, it was left with few allies. Not until 1997 was there any effort to improve relations with the United States.

Soon after Atal Bihari Vajpayee became Indian Prime Minister, he authorized a nuclear weapons test in Pokhran, which got the immediate attention of the US. The Clinton administration and Vajpayee exchanged representatives to help build relations. In March 2000, President Bill Clinton visited India. He had bilateral and economic discussions with Prime Minster Atal Bihari Vajpayee. Over the course of improved diplomatic relations with the Bush administration, India has agreed to allow close international monitoring of its nuclear weapons development while refusing to give up its current nuclear arsenal. India and the US have also greatly enhanced their economic ties.

During the 9/11 terrorist attacks on the U.S., President George W. Bush chose India as the country to control and police the Indian Ocean sea-lanes from the Suez to Singapore. The tsunami that occurred in December 2004 saw the U.S. and Indian navies to work together in search and rescue operations and to reconstruct the damaged lives and land. An Open Skies Agreement was made in April 2005. This helped enhance trade, tourism, and business by the increased number of flights. Air India purchased 68 US Boeing aircraft, which cost $8 billion.

Former U.S. Secretary of Defense Donald Rumsfeld and U.S. Secretary of State Condoleezza Rice have made recent visits to India as well. After Hurricane Katrina, India donated $5 million to the American Red Cross and sent 2 plane loads of relief supplies and materials to help. And on 1 March 2006, President Bush made another diplomatic visit to expand relations between India and the United States.

Ties under Obama administration

Despite much gains in Indo-American relations during the tenure of the Bush administration, India was not one of the Asian countries U.S. Secretary of State Hillary Clinton visited in February 2009. The Foreign Policy magazine reported that even though Foreign Policy Staff of the previous administration had recommended India as a "key stop" during any such official tour of Asia, Hillary Clinton will not be making a visit to New Delhi.[6] The exclusion of India from the Asian tour was regarded as a "mistake" by some analysts.[7] India was not even mentioned once in the Obama administration's official foreign policy agenda.[8] The Forbes magazine alerted U.S. President Barack Obama on the need to prevent United States' new-found alliance with India from erosion.[9]

In an editorial, the National Interest suggested that the Obama administration could possibly damage "the foundations underlying the geostrategic partnership" between India and the United States.[10] Another editorial published by the Taipei Times highlighted the importance of India-U.S. relations and urged Barack Obama to give "India the attention it deserves".[11] Terming India to be United States' "indispensable ally", the Christian Science Monitor argued that the Obama administration needs India's cooperation on several issues, including climate change, Afghanistan war and energy security and therefore, Obama cannot risk putting ties with India on "back-burner".[12]

However, there were signs of new coldness in India-U.S. relations. India's National Security Adviser, M.K. Narayanan, criticized the Obama administration for linking the Kashmir dispute to the instability in Pakistan and Afghanistan and said that by doing so, President Obama was "barking up the wrong tree".[13] The Foreign Policy too criticized Obama's approach towards South Asia saying that "India can be a part of the solution rather than part of the problem" in South Asia and suggested India to take a more proactive role in rebuilding Afghanistan irrespective of the attitude of the Obama administration.[14] In a clear indication of growing rift between India and the U.S., the former decided not to accept a U.S. invitation to attend a conference on Afghanistan.[15] Bloomberg reported that since 2008 Mumbai attacks, the public mood in India has been to pressurize Pakistan more aggressively to take actions against the culprits behind the terrorist attack and this might reflect on the upcoming general elections in May 2009. Consequently, the Obama administration may find itself at odds with India's rigid stance against terrorism.[16]

India strongly criticized Obama administration's decision to limit H-1B visas and India's External Affairs Minister, Pranab Mukherjee, said that his country would argue against U.S. "protectionism" at various international forums.[17] The Vishwa Hindu Parishad, a close aide of India's main opposition party the BJP, said that if the United States continues with its anti-outsourcing policies, then India will "have to take steps to hurt American companies in India."[18] India's Commerce Minister, Kamal Nath, said that India may move against Obama's outsourcing policies at the World Trade Organization.[19] However, the outsourcing advisory head of KPMG said that India had no reason to worry since Obama's statements were directed against "outsourcing being carried out by manufacturing companies" and not outsourcing of IT-related services.[20]

Military relations

Naval ships from India, the U.S., Japan, Australia, and Singapore during a naval exercise in Malabar 2007.

The U.S.-India defense relationship derives from a common belief in freedom, democracy, and the rule of law, and seeks to advance shared security interests. These interests include maintaining security and stability, defeating terrorism and violent religious extremism, preventing the spread of weapons of mass destruction and associated materials, data, and technologies and protecting the free flow of commerce via land, air and sea lanes.

In recent years India has conducted joint military exercises with the U.S. in the Indian Ocean. Despite this the Indian government sees the sole U.S. base in the Indian Ocean, Diego Garcia, and the permanent presence of the U.S. military there, as a potential escalation point in a future war, especially because of the current U.S. operations in Iraq and Afghanistan.

Recognizing India as a key to strategic U.S. interests, the United States has sought to strengthen its relationship with India. The two countries are the world's largest democracies, both committed to political freedom protected by representative government. India is also moving gradually toward greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources, including through the vital sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a strategically stable Asia.

There were some differences, however, including over India's nuclear weapons programs and the pace of India's economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.

In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India's nuclear tests in May 1998. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. In a meeting between President Bush and Prime Minister Vajpayee in November 2001, the two leaders expressed a strong interest in transforming the U.S.-India bilateral relationship. High-level meetings and concrete cooperation between the two countries increased during 2002 and 2003. In January 2004, the U.S. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone in the transformation of the bilateral relationship and a blueprint for its further progress.

In July 2005, President Bush hosted Prime Minister Singh in Washington, DC. The two leaders announced the successful completion of the NSSP, as well as other agreements which further enhance cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives announced at this meeting include: an U.S.-India Economic Dialogue, Fight Against HIV/AIDS, Disaster Relief, Technology Cooperation, Democracy Initiative, an Agriculture Knowledge Initiative, a Trade Policy Forum, Energy Dialogue and CEO Forum. President Bush made a reciprocal visit to India in March 2006, during which the progress of these initiatives were reviewed, and new initiatives were launched.

In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India for the first time in 30 years. U.S. policy had opposed nuclear cooperation with India because the country had developed nuclear weapons in contravention of international conventions and never signed the Nuclear Non-Proliferation Treaty. The legislation clears the way for India to buy U.S. nuclear reactors and fuel for civilian use. In July 2007, the United States and India reached a historic milestone in their strategic partnership by completing negotiations on the bilateral agreement for peaceful nuclear cooperation, also known as the "123 agreement." This agreement, signed by Secretary of State Rice and External Affairs Minister Mukherjee on October 10, 2008, governs civil nuclear trade between the two countries and opens the door for American and Indian firms to participate in each other's civil nuclear energy sector. The U.S. and India seek to elevate the strategic partnership further to include cooperation in counter-terrorism, defense cooperation, education, and joint democracy promotion.

In March 2008, the Obama administration cleared the US$2.1 billion sale of eight P-8 Poseidons to India, the largest military deal between the two countries.[21] However, in a major blow to U.S.-India ties, the Obama administration blocked the sale of General Electric LM2500 gas turbine engines which were to be fitted to Indian Navy's Shivalik class frigates.[22]

Economic relations

The United States is also one of India's largest direct investors. From the year 1991 to 2004, the stock of FDI inflow has increased from USD $11.3 million to $344.4 million, totaling $4.13 billion. This is a compound rate increase of 57.5% annually. Indian direct investments abroad were started in 1992. Indian corporations and registered partnership firms are allowed to invest in businesses up to 100% of their net worth. India's largest outgoing investments are manufacturing, which account for 54.8% of the country's foreign investments. The second largest are non-financial services (software development), which accounts for 35.4% of investments.

Trade relations

File:20060302-10 d-0401-515h.jpg
U.S. President George W. Bush and Indian Prime Minister Manmohan Singh during a meeting with Indian and American business leaders in New Delhi.

The United States is India's largest trading partner. In 2007, the United States exported $17.24 billion worth goods to India and imported $24.02 billion worth of Indian goods.[23] Major items exported by India to the U.S. include Information Technology Services, textiles, machinery, ITeS, gems and diamonds, chemicals, iron and steel products, coffee, tea, and other edible food products. Major American items imported by India include aircraft, fertilizers, computer hardware, scrap metal and medical equipment.[24][25]

The United States is also India's largest investment partner, with American direct investment of $9 billion accounting for 9% of total foreign investment into India. Americans have made notable foreign investment in India's power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining industries.[25]

In July 2005, President George W. Bush and Indian Prime Minister Dr. Manmohan Singh created a new program called the Trade Policy Forum. It is run by a representative from each nation. The United States Trade Representative is Rob Portman and the Indian Commerce Secretary is Minister of Commerce Kamal Nath. The goal of the program is to increase bilateral trade which is a two-way trade deal and the flow of investments.

There are five main sub-divisions of the Trade Policy Forum which include: Agricultural Trade group- This group has three main objectives: agreeing on terms that will allow India to export mangoes to the United States, permitting India's APEDA (Agricultural and Process Food Products Export Development Authority) to certify Indian products to the standards of the USDA, and executing regulation procedures for approving edible wax on fruit. Tariff and Non-Tariff Barriers group- Goals of the group include: agreeing that insecticides that are manufactures by United States companies can be sold throughout India. India had agreed to cut special regulations on trading carbonated drinks, many medicinal drugs, and lowering regulations on many imports that are not of agricultural nature. Both nations have agreed to discuss improved facets on the trade of Indian regulation requirements, jewelry, computer parts, motorcycles, fertilizer, and those tariffs that affect the American process of exporting boric acid.

The two nations have discussed matters such as those who wish to break into the accounting market, Indian companies gaining licenses for the telecommunications industry, and setting polices by the interaction of companies from both countries regarding new policies related to Indian media and broadcasting. This group has strived to exchange valuable information on recognizing different professional services offered by the two countries, discussing the movement and positioning of people in developing industries and assigning jobs to those people, continuation of talks in how India's citizens can gain access into the market for financial servicing, and discussing the limitation of equities.

The two countries have had talks about the restriction of investments in industries such as financial services, insurance, and retail. Also, to take advantage of any initiatives in joint investments such as agricultural processing and the transportation industries. Both countries have decided to promote small business initiatives in both countries by allowing trade between them.

The majority of exports from the United States to India include: aviation equipment, engineering materials and machinery, instruments used in optical and medical sectors, fertilizers, and stones and metals.

Below are the percentages of traded items India to US increased by 21.12% to $6.94 billion.

  1. Diamonds & precious stones (25%)
  2. Textiles (29.01%)
  3. Iron & Steel (5.81%)
  4. Organic chemicals (4.3%)
  5. Machinery (4.6%)
  6. Electrical Machinery (4.28%)

Major items of export from U.S. to India: For the year 2006, figures are available up to the month of April. Merchandise exports from US to India increased by 20.09.26% to US $2.95 billion. Select major items with their percentage shares are given below

  1. Engineering goods & machinery (including electrical) (31.2%)
  2. Precious stones & metals (8.01%)
  3. Organic chemicals (4.98%)
  4. Optical instruments & equipment (7.33%)
  5. Aviation & aircraft ( 16.8%)

See also

Notes

  1. ^ India-U.S. Economic and Trade Relations
  2. ^ The Evolving India-U.S. Strategic Relationship
  3. ^ [1]
  4. ^ India frets over Obama's Chinamania
  5. ^ India renews criticism of "Buy American" drift
  6. ^ A U.S. Asia strategy for Hillary Clinton's trip
  7. ^ Mrs. Clinton Goes To China
  8. ^ THE AGENDA • FOREIGN POLICY
  9. ^ Obama Should Visit India--Soon
  10. ^ Ignoring India
  11. ^ The US and India can’t put off a strategic partnership any longer
  12. ^ India: America's indispensable ally
  13. ^ Obama should not link Kashmir with Pak's problems: NSA
  14. ^ India needs a lot more love from Obama
  15. ^ India not to attend conference on Afghanistan with Pakistan, U.S.
  16. ^ India’s Terror Stance Vexes Obama Amid Voter Ire at Pakistan
  17. ^ India says it will oppose U.S. 'protectionism'
  18. ^ Anger Grows in India over U.S. Visa Rules
  19. ^ India may contest Obama's move against outsourcing in WTO
  20. ^ ‘Obama on outsourcing is no reason to panic’
  21. ^ U.S. OKs record $2.1 billion arms sale to India
  22. ^ US freezes engine supply, Navy in a fix
  23. ^ Foreign Trade Census
  24. ^ India - US Trade and Economic Relations
  25. ^ a b India (10/07)

Sources

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