Why in the
News?
Prime Minister Narendra Modi visit to
the USA has helped India showcase its Cultural heritage, Diplomatic prowess and
its growing influence on the world stage.
Key outcomes of
the Diplomatic visit:
1) Access to
critical technologies in several areas - Semiconductors, next- generation
telecommunications, space and defence innovation.
● This is a
development on India-US Initiative on Critical and Emerging technology (iCET),
2022 agreement.
2) Major push to
Indian startups via Semiconductor Supply Chain and Innovation Partnership.
● Policy
coherence of India & US will enable building of semiconductor Assembly and
test facilities operating with fiscal support in Indian land.
● This has the
potential to create 5000 direct jobs in India.
● Following this,
in the Semicon Conclave 2023: the American firm AMD has announced to invest
$400billion in setting up a Semiconductor hub in India over a period of 5
years.
3) Access to Green
technologies for climate mitigation and adaptation programmes.
● This is a step
forward in the US-India Climate and Clean Energy Agenda Partnership, 2030.
● US-India New
and Renewable Energy Technologies Action Platform has been launched - cooperation
in Green hydrogen, offshore & onshore winds among others.
4) Agreement on
enhanced trade relations through mutual consultations.
● The two
countries decided to terminate six outstanding disputes at the WTO.
5) Defence
Partnership with the US to enhance India’s security infrastructure and foster
stronger military ties with the US.
6) Stepping up of
Defence cooperation by involving industries in the sector for co-production,
co-development and maintaining supply chain.
· $500-million military equipment and technology package that includes jet engines, critical minerals technology and tech transfers.
Defence cooperation deals signed so far:
1. Logistics Exchange Memorandum of Agreement (2016)- mutual access to each other's military facilities 2. Communications Compatibility and Security Agreement (2018)- facilitates secure communication and transfer of high-end technology 3. Basic Exchange and Cooperation Agreement (2020)- allows sharing of geospatial data and intelligence |
7) US Senate has passed a resolution recognizing Arunachal Pradesh as part of India, shortly after the visit.
Frictional areas such as
implementation of Digital Public Infrastructure, patent laws have to be
resolved to collaborate more effectively as strategic partners.
Why USA needs
India?
1. The China factor
at the Indo-Pacific:
a. China’s assertiveness in the South China Sea making attempts for territorial gains.
b. Cheque-book
diplomacy and Debt-trap diplomacy of China to bait Countries to gain dominance
in the Indian
Ocean Region (IOR) through its ambitious projects of
i.
Belt-and-Road Initiative
ii. String of Pearl hypothesis - developing ports all across the Indian Ocean nations for trade facilitation and maintaining a presence in the region.
2. India has turned to be an economic bright spot with a huge market (world’s second-largest by volume and the third-largest by value), skilled workforce and favouring Geopolitical situation – China+1 strategy.
|
China+1 strategy: ·
A strategy in which the
companies avoid investing only in India and decide to diversify their business
to alternative destinations. ·
Investments in China was
attracted by its o Low labour and production costs o Growing size of its domestic consumer market o Favourable policies like Special Economic Zones(SEZs) ·
Reasons for pulling away of
investments: o Zero-Covid policy restrictions o Ageing workforce o China’s diminishing cost advantage o Geopolitical mistrust between China and the West o New export controls. o Stringent laws in China- for instance the Strict Privacy law of China. o Financial defaults by the real estate sector, which accounts for over
25 per cent of China’s GDP ·
A grouping of 18 economies,
including India, the US, and the European Union, have laid a roadmap to
establish long-term collective supply chains to counter supply chain
dependencies and vulnerabilities. This has also served as a factor for
the rethinking. |
3. Indian Diaspora
turning to be an asset of the US.
a. Huge number of
Indian students studying in American Universities will form a backbone of
American Tech
companies in the future.
4. India’s rising
military capability to police the Indo-Pacific and IOR in conjunction with the
Quad’s US, Australia and Japan and middle naval powers like Britain and France
make India a pivotal power in the arc from the Gulf of Aden to the Malacca
Strait
5. Shared
commitment to a free, open, and democratic world order.
India is also a prominent voice for
the Global South, championing the causes of justice, equity, and
sustainability for the developing world
