CUTS International Washington DC Center
Monthly Brief #49, April 2022
Putting Two and Two Together: On India-US 2+2 Dialogue
 
The recently held Fourth India-US 2+2 Ministerial Dialogue was more than just a restatement of staid diplomatic lines between two countries which share a Comprehensive Global Strategic Partnership. There was a clear emphasis on deliverables, people-to-people ties and overall greater strategic congruence.
 
This was reflected in the agenda for the 2+2 meeting, covering the entire gamut of relations from defense and strategic affairs to health and education. The two countries signed a landmark Space Situational Awareness agreement, and are working on launching new defense base exchanges between the US Space Command and India’s Defense Space Agency. These are expected to be followed by pursuing dialogues and inking agreements on defense artificial intelligence.
 
2022 will see rejuvenated versions of the US-India Commercial Dialogue and the US-India CEO Forum. An inter-sessional meeting of the Trade Policy Forum (TPF) is expected soon, following the reconvening of the TPF late last year. The newly established Working Group on Education and Skill Training holds promise and can stimulate joint STEM research.
 
The months ahead will continue to see important bilateral engagements – meetings of the India-US Civil Space Joint Working Group, the first Defense Space Dialogue, the third Defense Cyber Dialogue, the US-India Counter Narcotics Working Group and the US-India Homeland Security Dialogue.
 
With market access and other core trade issues having receded into the background, the focus has shifted to infrastructure, digital trade, green technology and supply chain resilience. All of these are expected to be addressed in the proposed US Indo-Pacific Economic Framework (IPEF). India can be a key ally on these agendas, with the IPEF complementing pre-existing frameworks such as the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure.
 
Going forward, the two countries need to do more to jointly support efforts of the World Food Programme and the Food and Agriculture Organisation to prevent the escalating crisis in Ukraine from causing global food insecurity. As agricultural powerhouses, the US and India can together chart a course for funding mechanisms and global supply of foodgrain.
 
In an increasingly unsteady and uncertain world, the India-US relationship can be a pillar of stability supporting the remnants of the rules-based global order. It was not without reason that Secretary Blinken, in his visit to New Delhi last year, termed ties with India as “one of the most consequential relationships we have with any country on Earth.” External Affairs Minister Jaishankar clearly concurs, observing in his opening remarks at the 2+2 dialogue that the India-US relationship has "grown well beyond its bilateral scope”.
      
Pradeep S. Mehta
Editor

P.S. A group of G20 Finance Ministers boycotted Russia’s participation at a meeting in Washington recently, opting to walk out when the Russian Finance Minister began his virtual intervention. Are we on an irreversible path towards a complete fragmentation of the global economy?


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The new TRIPS “waiver” solution is misguided
As per a leaked draft, India, South Africa, the European Union (EU) and US have shaken hands on a World Trade Organisation (WTO) secretariat’s response to the pandemic (Draft). The Draft is a compromise on the countries’ original negotiating positions without any substantial shift, while the critical need to distribute vaccines to people in poor countries remains unmet.

US plans trade meetings with ASEAN leaders as it retools Indo-Pacific strategy
US President Joe Biden’s administration is renewing efforts with Southeast Asian countries to advance a new Indo-Pacific strategy, amid criticism that the plan falls short on trade. US deputy secretary of commerce Pamela Phan said the administration wanted to get a summit with ASEAN leaders (Paywall) on the calendar in the next couple of months, calling it a key piece to advancing that relationship.
 
After US, India 2nd country to launch Trade and Technology Council with EU
Welcoming PM Modi’s decision to launch the European Union (EU)-India Trade and Technology Council, the EU chief Ursula von der Leyen said the EU has only one trade and technology council in place and that is with the US. She said, therefore, it is time that it is so important for us to put up a second Trade and Technology Council in India. EU has India as a technological powerhouse.
 
Opportunity for India to expand trade amid Russia-Ukraine crisis: Manmohan Singh
With rising inflation, volatile crude oil prices, global uncertainty, weak domestic private investment and deteriorating fiscal situation, expanded external trade in the changed global situation presents the best opportunity to salvage India's economy and create large numbers of jobs for our youth and women.

 

Global meet on securing energy infrastructure to be hosted in Delhi
The Russia-Ukraine war has added significance to a global conference being hosted by New Delhi in partnership with the US to deliberate on securing energy infrastructure worldwide and risk financing in building disaster-resilient infrastructure. The three-day conference, beginning May 4, will be attended by senior ministers and officials from 36 countries and UN agencies, including multilateral organisations such as the World Bank and Asian Development Bank.

EU president highlights green energy cooperation to reduce dependence on Russian oil
Amidst India’s efforts to deflect criticism over buying oil from Russia by pointing fingers at Europe, European Union (EU) President Ursula Von der Leyen underlined the regional bloc’s increasing investment in renewable energy as a fallout of the Ukrainian war and asserted that cooperation in this field with the South Asian country would be “critical” to reduce Europe’s dependence on Russian energy.
 
Energy independence through hydrogen
In the long run, two envisioned prominent fuels are hydrogen and electricity. Though both are energy vectors, hydrogen can be stored on a large scale and for a longer duration explicitly affirming its huge potential (Paywall) to become a great balancer to the ever-increasing supply of variable renewable energy. It will complement and accelerate renewables into India’s clean energy transition, thereby supporting India’s ambitious plan to achieve 500 GW renewable capacity by 2030.

India to meet half of its energy needs from renewable by 2030: NITI member
India's non-fossil energy capacity will reach 500GW by 2030 and the country shall meet half of its energy requirements through renewable energy, reducing the carbon intensity of its economy by less than 45 per cent. India will also reduce the total projected carbon emissions by 1 billion tonnes from now onwards till 2030. By the year 2070, India will achieve the target of net zero, NITI Aayog member V K Saraswat said.

 

India-Australia Bilateral Relations
India-Australia share a “Comprehensive Strategic Partnership” and recently the two erstwhile commonwealth nations have entered into a new era of friendship. Prime Ministers of both the nations met virtually on March 21, 2022 and have entered into economic and trade agreements to bolster geoeconomics partnership. Focus area of the talks: - clean technology, critical minerals, job creation, security of Indo-Pacific region and rule of law to be respected on land and water. This edition of CUTS Occasional News Wrap collates news reports and diverse opinions from various experts.

India-Japan Bilateral Relation
The India-Japan bilateral relationship has recently been under the spotlight. The 14th India-Japan Annual Summit took place at a significant time as the two countries were celebrating the 70th anniversary of establishment of diplomatic relations. Reaffirming the Special Strategic and Global Partnership between the two, Japan has offered to invest US$42 billion in India over a period of five years. This would be in the areas of health and medical care, electrical vehicles, power and energy, urban environment management, agriculture and rural development among others. This edition of CUTS Occasional News Wrap covers the developments during the visit of Prime Minister Fumio Kishida’s two-day visit to India on March 19-20, 2022.

The third way for the Indo-Pacific
Power dynamics in Asia have been in flux for over a decade. Gradually the older term – ‘Asia-Pacific’ – has been replaced by the 21st century phrase – ‘Indo-Pacific’. States in the region and beyond have been concerned about ensuring its security and economic development. In pursuing this goal, different approaches have been visible; for example, those followed by China and the US, respectively the No.2 and No.1 powers in the world. The Sino-US contestation is a central tenet of the Indo-Pacific. In this power tussle, the European Union (EU) strategy for the region provides a new way to engage with partners in the "Third Space" for a free, open, and inclusive Indo-Pacific.

US to help India project force to counter China’s naval activity: US official
The United States will work closely with India in the Indian Ocean region to ensure a free and open Indo-Pacific and to bolster Indian abilities to project force in the face of increased activity by the Chinese navy. The US is focused on helping India modernise its military and supporting the country’s defence indigenisation agenda as it fits in with American plans to help India’s armed forces move away from dependence on Russian-origin equipment and platforms.

 

The semiconductor decade: A trillion-dollar industry
The semiconductor industry, which makes vital components for the technologies we all depend on, hit the headlines over the past year. And it wasn’t all good news. Supply shortages led to bottlenecks in the production of everything from cars to computers and highlighted how tiny chips are critical to the smooth functioning of the global economy. In many ways, our world is “built” on semiconductors. With chip demand set to rise over the coming decade, semiconductor manufacturing and design companies would benefit now from a deep analysis of where the market is headed and what will drive demand over the long term.

Top US trade body to help India become global chip manufacturing hub
As India doubles down on local semiconductor manufacturing, the Semiconductor Industry Association (SIA), which is the top trade association representing the US semiconductor industry, on Tuesday, April 12, 2022 joined hands with the India Electronics and Semiconductor Association (IESA). The collaboration will help foster collaboration and identify potential opportunities between the two countries in the semiconductor sector.

India-Australia calibrate cyber cooperation
New global economic, military and political alliances are taking shape, and call for like-minded nations to calibrate their strategic, long-term interests. The new India-Australia economic trade agreement is reflective of this. It also folds in a critical element: wide cooperation in cyber security, which now impacts the economy, democratic institutions and warfare. India has much to learn from Australia’s low key but smart cyber expertise.
 
Rethinking innovation in defence
A recent Parliamentary Standing Committee report says India spends too little on defence research and development (R&D), and draws comparison with the US and other countries. Is that right? And if so, what should we do? Start with absolute spending on defence. The US at around US$780 billion is 40 percent of world spending on defence, more than the next 10 countries combined. China (US$250 billion) is 13 percent, followed by India (US$72 billion) at 4 percent.

 

India working towards mitigating global volatility, unpredictability: Jaishankar
The discussions during the India-US 2+2 ministerial helped the two countries to strategise on mitigating the volatility and unpredictability that the world is currently experiencing. The big concerns that India and the world has is of energy security, of rising prices, of increasing premiums, of limited supplies. But an equally big worry, which is emerging, is of food security. There are concerns across geographies of societies who are importing wheat or sugar or other foodstuff out of the conflict region.

Diaspora body urges Sitharaman to allow NRIs, OCI card holders to invest in Indian stock market
A prominent Indian Diaspora body, Foundation for India and Indian Diaspora Studies (FIIDS), urged Finance Minister Nirmala Sitharaman to allow non-resident Indians and overseas citizens of India (OCI) card holders to invest in the Indian stock market. Such a move would boost the Indian economy further by attracting investment from the global Indian community. FIIDS also urged the Finance Minister to expand the Double Tax Avoidance Agreement (DTAA) to avoid filing of the taxes in the US on the income (with some restrictions) taxed (filled) in India.

Continuing military engagement, India, Australia hold Navy to Navy talks
Continuing the high tempo of military engagement, India and Australia held the 14th Navy to Navy staff talks. Major issues discussed included maritime operations, information exchange and training. Both sides also acknowledged the growing cooperation between the two Navies amid the emerging challenges on the maritime front, and agreed to enhance collaboration and interoperability towards ensuring maritime security in Indian Ocean Region (IOR).
 
US reaffirms its continued support for India’s permanent membership in reformed UNSC, NSG
The Biden administration has reaffirmed its commitment to support India’s permanent membership in a reformed UN Security Council (UNSC) and New Delhi’s entry to the Nuclear Suppliers’ Group (NSG). The US also praised India for its significant contributions as a member of the 15-membered apex decision making body of the UN.