CUTS International Washington DC Center
Monthly Brief #64, July 2023
Shaping a New Roadmap for 2047: PM Modi’s visit to France and UAE
 
In his quest to take India forward in the international arena Prime Minister Narendra Modi had a successful three-day hectic visit to France and United Arab Emirates (UAE) simultaneously in mid July.
 
To begin with he was the guest of honour to the Bastille Day parade and marking the 25th Anniversary of the India-France strategic partnership. Later on the third day of his tour, the PM visited Abu Dhabi, as UAE is the third member of the France-India-UAE trilateral cooperation.
 
This visit was an impeccable stride to plan the future course of their partnerships across wide-ranging strategic, economic, cultural, scientific sectors of mutual cooperation. It turned out to be a remarkable opportunity to identify the way forward in various domains such as energy, education, healthcare, food security, fintech, defence and culture.
 
To advance bilateral cooperation in defence and security sector a map for the next 25 years of the India-France ties was finalised. Additionally, the progress on the Indian Multi Role Helicopter (IMRH) programme, is reflective of the French commitment to maintain technology transfer and thus buttress the Make in India programme. In response, to facilitate the defence industrial collaboration between the two, India will set up a Technical Office of the DRDO at its Embassy in Paris.
 
Furthermore, India has announced to launch Unified Payment Interface (UPI) in France with an agreement signed between NPCI International Payments Limited (NIPL) and Lyra Collect of France. This is the first time that India has been successful in getting its UPI accepted in a developed country. On similar grounds of the Indo-French UPI convergence discussions, the Indian PM announced that India and UAE could start trade settlement in their respective local currencies. He further stated his ambition for the bilateral trade between the two countries to go beyond US$100 billion mark soon.
 
In one of his interview with the leading French newspaper “Les Echos”, PM Modi stated that he sees India as a strong shoulder for ‘Global South’. Having established its leadership India can be an effective bridge in voicing the needs of the Global South before the Global North.
 
He further enunciated the possibilities of co-development and disseminating the benefits of such partnerships to fulfil the requirements of other friendly countries thus instituting the true essence of “Vasudhaiva Kutumbakam” (World is one family). This visit is symbolic of India’s strengthening trilateral ties with both France and UAE weaving all the threads for a long and endearing partnership.
      
Pradeep S. Mehta
Editor

P.S.: In 2047 India is aiming to become a developed nation? What measures need to be taken in the short run, medium run and long term in order to achieve this milestone?
 
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India-U.S. FTA on the cards preceded by limited trade deal, informs Commerce Ministry
India and the U.S. are close to concluding an initial limited trade package (Paywall) followed by a possible bilateral Free Trade Agreement (FTA). “There was a desire expressed to conclude this initial limited trade package and recognising the complementarities of the India-U.S. bilateral trade, discussed the possibility of an FTA,” the Commerce and Industry Ministry said after an informal discussion between Commerce and Industry Minister Piyush Goyal and U.S. Secretary of Commerce Wilbur Ross.

India, U.S. mutually resolve all six trade disputes at WTO
India and the U.S. have mutually resolved all six trade disputes pending at the World Trade Organisation (WTO), in line with the commitment made by the two countries during the U.S. visit of Prime Minister Narendra Modi last month. Both countries have informed the WTO’s Dispute Settlement Body (DSB) about the resolution of all the pending disputes. The WTO has already issued a communication with regard to one of the disputes related to the imposition of additional customs duties by India on 28 U.S. products.

PHD Chamber: India-U.S. bilateral trade likely to touch US$300 billion in 2026-27
India-U.S. trade is likely to touch US$300 billion in 2026-27 from its current trade of US$188 billion in 2022-23, a report released by industry body PHD Chamber of Commerce and Industry (PHDCCI) on July 27, 2023 stated. The report “India-U.S. Bilateral Relations: Steady Strides into the Future” speaks about how India-U.S. bilateral relations have intensified beyond the domain of trade and investments over the years.

India-Australia trade gap narrows by 15 percent with FTA
The India-Australia interim Free Trade Agreement (FTA), in place for six months, has led to a 15 percent narrowing of India’s trade deficit with Australia on increased exports of drugs, electrical machinery, and iron and steel articles, along with a significant decline in coal imports due to a milder Indian summer. India’s exports to Australia fell by over 32 percent in the five months to May compared to the year-ago period, while imports shrank by 25 percent, resulting in a narrowed trade gap of US$3.87 billion, representing a 15 percent decline from the previous year, according to official data.

 

Green energy transition: U.S., India forge a game-changing partnership
As the world grapples with the impact of climate change, national governments are embracing green energy initiatives and carbon reduction strategies. India, too, has been making remarkable progress in green energy transition. Recognising India’s efforts towards decarbonising its economy, the U.S. has stepped in to help its ally speed up its energy transition. U.S. Treasury Secretary Janet Yellen announced a collaboration aimed at developing an investment platform that will bolster India’s renewable energy drive.

India, U.S. to work for global hydrogen ecosystem
India and the U.S. are committed to develop and support the global hydrogen ecosystem to make affordable, low-carbon hydrogen globally by 2030, New and Renewable Energy Secretary Bhupinder Singh Bhalla said on July 13, 2023. “Recognising the importance of diversified and resilient clean energy supply chains for the energy transition we are working together to eliminate exposures to disruption,” he said addressing the ‘U.S.-India Energy Summit - Partnership for a sustainable future’.
 
India, U.S. to explore alternate mechanism to fund renewable energy
India and the U.S. on July 17, 2023 committed to further improving bilateral ties, exploring alternate mechanisms for funding renewable energy and actively pursuing the G20 agenda which includes strengthening Multilateral Development Banks (MDBs) and taking coordinated action to deal with climate change. Several issues, including climate action, rising indebtedness in low and middle income countries and digital public infrastructure, figured during a bilateral meeting between Finance Minister Nirmala Sitharaman and U.S. Treasury Secretary Janet Yellen held on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors.

For emerging climate tech startups, the U.S. heat wave could be a learning curve
July is set to be the hottest month on record, and over half of the U.S. has been under excessive heat warnings and advisories. And with the climate crisis set to turn the heat up even further in the coming years, the need to keep people cool has never been more pressing, doubly so for doing it without emitting more greenhouse gases. Heat pumps have gotten a lot of the limelight, but a number of emerging climate tech startups are developing the next wave of technology that will keep us cool without frying the planet or overtaxing the grid.

 

U.S., Australia to cooperate with India to ensure security and stability of Indo-Pacific
U.S. and Australia on July 29, 2023 agreed to further cooperate with India, Japan, Indonesia, the Philippines and Korea to ensure the security and stability of the Indo-Pacific at the 33rd Australia-U.S. Ministerial Consultations (AUSMIN). Officials from the two countries on July 29, 2023 met in Brisbane. The U.S. delegation was led by Secretary of Defence, Lloyd J Austin, and Secretary of State, Antony Blinken. The Australian delegation included Deputy Prime Minister Richard Marles and Minister of Foreign Affairs and Trade Penny Wong.

Understanding Biden's Big Bet on India
The unprecedented lovefest between the U.S. and India has been striking and, frankly, puzzling. Following the pageantry of U.S. President Joe Biden hosting a state dinner for Indian Prime Minister Narendra Modi, and of U.S. Speaker of the House Kevin McCarthy inviting Modi to address a joint session of Congress for a second time, one wonders if America is giving away the store and getting very little in return.

U.S. plans naval logistics hubs in India to counter China
The U.S. seeks to transform India into a center for resupplying and maintenance of naval vessels in the South Asia region, where it has been stretched thin with such capabilities. The U.S. will provide India with support to develop infrastructure that will be used to resupply, repair and maintain ships and aircraft. The U.S. military looks to build readiness for quickly handling resupply activities and repairs in the Indo-Pacific region. If the navy has access to more hubs in the region, then vessels and aircraft will waste less time pausing operations for both. The time savings can be allocated to joint exercises with other countries.

True balance is imbalance: our relations with U.S. and China
Evolving world order is facing challenges where emerging powers, mainly China, is discontented with the space the incumbent superpower, the U.S., is willing to cede. U.S. National Defence Strategy of 2022 declared China as ‘Consequential Strategic Competitor’ and ‘Pacing Challenge’, rather an adversary. The U.S. continues to confront China through its own set of policies and collaboration with the countries that share American ambition of limiting China’s influence.

 

India-U.S. initiative on critical and emerging technology to ensure no abuse of supply chains
The India-U.S. Initiative on Critical & Emerging Technology (iCET) precisely ensures that there is no such control or abuse of supply chains. This India-U.S. Initiative on Critical & Emerging Technology also covers materials, said Rajeev Chandrasekhar, Minister of State, Ministry of Electronics and IT. To expand strategic technology partnership and defence industrial cooperation between the governments, businesses, and academic institutions of the U.S. and India, in May last year, President Joe Biden and Prime Minister Narendra Modi had announced the U.S.-India initiative on Critical and Emerging Technology.

Project Kaveri and India’s indigenous jet engine ambitions may remain in the cupboard
General Electric (GE) and (Hindustan Aeronautics Limited) HAL have signed an Memorandum of Understanding (MoU) for co-producing of jet engines in India (Paywall). This can also serve as a model for future co-production, as India has been cautious about the 'Make in India' initiative. However, no country is likely to hand over technology in a gift wrap form. It is likely that some percentage of the technology will be transferred. Initially, the engineering aspect will be provided by the U.S. and the assembling will be in India. While certain smaller components are likely to be manufactured domestically. This aligns with India's agenda of co-production," stated Purushendra Singh, Senior Research Associate at CUTS International.

India-U.S. tech ties can reshape global affairs
Prime Minister Narendra Modi’s first State Visit to the U.S. will be remembered as a pivotal moment as it yielded agreements in the high technology sector (Paywall) that have the potential to shape the course of global affairs for years to come. Till date, pre-eminence in cutting-edge technologies has consistently served the U.S. as a cornerstone of its global primacy. Washington DC would have suffered a jolt to see a recent study by the Australian Strategic Policy Institute, sponsored by the U.S. State Department, that China now leads the U.S. in research in 37 of the 44 critical and emerging technologies.
 
India-Japan forge strategic ties to strengthen semiconductor manufacturing, supply chains
Indian and Japanese officials held discussions in New Delhi, exploring potential collaboration in crucial areas such as semiconductors and establishing robust supply chains. The talks aimed at achieving a target of US$35.9 billion Japanese investment in India by 2027. During the meeting, the Foreign Ministers of both countries, S. Jaishankar and Yoshimasa Hayashi, also deliberated on enhancing cooperation in defence equipment and technology.

 

Modi's U.S. visit: From handshakes to outcomes
India and the U.S. having the strength to find solutions to the global geopolitical challenges, have put behind the hesitations of the past and are moving towards a period of trusted partnership. This was reflected during the visit of the Prime Minister of India to the U.S. on June 21-22, 2023. This visit to the U.S., which is only the fifth State Visit by an Indian Prime Minister, has been significant in many ways.

India hosts a virtual SCO summit
At the 23rd Leaders’ Summit of the Shanghai Cooperation Organisation (SCO) hosted by India, Prime Minister Narendra Modi laid out five pillars of the SCO’s vision: security, economic development and connectivity, unity, respect for sovereignty and territorial integrity, and environmental protection. This Summit was held virtually on July 04, 2023. Apart from leaders of this eight-member organisation, the President of Turkmenistan was the Guest of the Chair, and the Presidents of Belarus, Iran and Mongolia, who are observers, also participated. In this edition of CUTS ONW, news of significant importance and expert analysis on this Summit are highlighted.

Celebrating 25 Years of Indo-French Strategic Partnership
Established in 1998, France and India are celebrating 25 years of their strategic partnership. This was marked by the Indian Prime Minister’s visit to France from July 13-14, 2023. He was invited as a chief guest to the French National Day (Bastille Day) in Paris. It was an opportunity to take forward 25 years of highly trusted and fruitful partnership. Among other developments, they released India-France Indo-Pacific Roadmap. This edition of CUTS Occasional News Wrap (ONW) reflects on this visit with compilation of articles highlighting the talks and developments covered in print and electronic media.
 
How India's Economy will overtake the U.S.'s
The brilliant and late economic historian Angus Maddison estimated that India was the world's largest economy for a staggering one and a half millennia. China surpassed India by 1820 but they remained the world’s two largest economies until 1870, when the twin effects of the Industrial Revolution in the West and European colonisation were more fully felt. Britain then emerged as the world’s foremost economic power; that economic title passed to the U.S. by 1900. Yet amid increasing talk of Asia’s rise, is the world economy now poised to return to its old normal?