CUTS International Washington DC Center
Monthly Brief #42, September 2021
‘Investing’ in the Indo-U.S. Bilateral Relationship through an Investment Agreement
 
After a successful summit-level interaction, India and the U.S. should give fresh impetus to a U.S.-India bilateral investment agreement. Such an agreement will be crucial for not just promoting bilateral investment and trade flows, but also for realising shared strategic objectives in areas such as defence and emerging technologies.
 
One of the highlights of Indian Prime Minister Modi’s recent U.S. visit was his interaction with CEOs of leading American corporations. With the goal of attracting greater inbound investment, the PM showcased India as a vibrant destination for investment opportunities in the telecommunications, electronics, infrastructure, defence, emerging technologies and renewable energy sectors.
 
In the U.S.-India Joint Leaders’ Statement, “developing a trade and investment partnership that increases prosperity for working families in both countries” was noted as a key component of the joint vision. However, there continue to be significant hurdles to moving forward on the trade front, with multiple outstanding issues (such as GSP renewal, digital trade issues, agricultural trade and market access issues) that will be difficult to resolve in the short-term. It is therefore an opportune moment to breathe new life into the U.S.-India investment partnership through a bilateral investment agreement.
 
A comprehensive bilateral investment treaty (BIT), which promotes and protects investments made in both countries, will require significant trade-offs. India may have to show flexibility regarding its 2015 Model BIT as a template, which has relatively shallower protection standards (such as stringent requirements for initiating Investor-State Dispute Settlement (ISDS) cases and absence of a MFN clause). The U.S. may have to show flexibility on IPR-related issues in the negotiations.
 
A zero sum approach to the trade and investment relationship is in neither country’s interest. A gradual, incremental approach with quicker movement on some issues (such as the contours of an investment agreement) and slower progress on others (such as digital trade and market access issues) may be the best way to proceed. The need for a mutually beneficial Indo-U.S. investment agreement is clear, and the two countries should catalyse discussions to negotiate the elements of such an agreement and the way forward.
                                        
Pradeep S. Mehta
Editor

P.S.: Will the new AUKUS trilateral coalition reshape the strategic landscape of the Indo-Pacific region?

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Free Trade Agreement is the next frontier in India-U.S. relationship: USIBC president
The time has come for us to get serious about where the next frontier is in U.S.-India ties. And neither for the United States, nor for India, is it tenable for two of the largest economies in the world to be outside of the TTP (Trans-Pacific Partnership) and to not have a trade architecture in place between the two of them, Nisha Desai Biswal, president of U.S.-India Business Council and a former U.S. diplomat said.

India, U.S. to reconvene Trade Policy before year-end: Report
India and the U.S. are looking "forward" to reconvening the India-U.S. Trade Policy Forum before the end of 2021 with an aim to enhance the bilateral relationship by addressing trade concerns, said an official joint statement. U.S. President Joseph R Biden welcomed India's Prime Minister Narendra Modi to the White House on Friday, September 22, for their first in-person Leaders' engagement, renewing their close relationship and charting a new course to advance the partnership between the world's largest democracies.
 
China officially applies to join mega regional trade pact
Beijing has applied to join an Asia-Pacific trade pact once pushed by the U.S. as a way to isolate China and solidify American dominance in the region. China submitted the formal application letter to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to New Zealand, according to a statement late on Thursday, September 16, in Beijing.
 
India, U.S. extend trade facilities to exporters
India's Central Board of Indirect Taxes and Customs (CBIC) and the U.S. Customs and Border Protection have agreed to extend greater facilities to exporters, from each other’s country, who meet certain compliance criteria. This was agreed upon as part of a mutual recognition agreement by the two agencies of the authorised economic operator (AEO) programme, a scheme that allows certain privileges to players in international trade that are accredited by authorities based on their track record.

 

India-U.S. hold ministerial meet on Strategic Clean Energy Partnership
Minister of Petroleum and Natural Gas Hardeep Singh Puri on Thursday, September 09, co-chaired a virtual Ministerial meeting with U.S. Secretary of Energy Jennifer Granholm to launch the revamped India-U.S. Strategic Clean Energy Partnership (SCEP). The SCEP is launched in accordance with U.S.-India Climate and Clean Energy Agenda 2030 Partnership announced by Prime Minister Narendra Modi and President Joe Biden at the Leaders’ Summit on Climate held in April this year, the Ministry of Petroleum and Natural Gas informed in a statement.

Government constitutes task force, expert committee on coal-based hydrogen production
The Centre Government on Tuesday, September 07, said it has constituted a task force and expert committee to prepare a road map for coal-based hydrogen production. This is aimed at contributing to Prime Minister Narendra Modi's agenda of a hydrogen-based economy in a clean manner. The task force has been constituted under the chairmanship of Coal Additional Secretary Vinod Kumar Tiwari. Its broad terms of reference include monitoring of activities towards achieving coal-based hydrogen production and usage and coordination with Coal Gasification Mission and NITI Aayog.
 
Hardeep Singh Puri’s Vladivostok visit boosts Indo-Russian energy trade
India has expanded the energy bridge with Russia with oil majors signing fresh deals with their Russian counterparts to maintain stability in oil and gas supplies during the just concluded visit of Oil and Natural Gas Minister Hardeep Singh Puri to Vladivostok for the 2021 edition of the Eastern Economic Forum. After defence, energy is emerging as a major pillar of Indo-Russian ties. The two sides are working on a multi-pronged approach that involves energy sourcing and supplies.

Bhupender Yadav attends first India-Japan Dialogue on Environment
The First India–Japan High Level Policy Dialogue was held virtually on September 07. Bhupender Yadav, Union Minister of Environment, Forest and Climate Change of India and KOIZUMI Shinjiro, Minister of the Environment of Japan discussed issues on Air Pollution, Sustainable Technologies and Transports, Climate Change, Marine Litter, Fluorocarbons, COP 26, etc. In the meeting Mr. Yadav acknowledged the importance of India–Japan bilateral cooperation on environment and appreciated efforts made by Japan in bringing new technologies in India.

 

India’s Presidency of the United Nations Security Council (UNSC)
India’s first stint as the President of the UNSC since it became a non-permanent member of the Council for the 2021-22 term was most eventful. Under India’s Presidency, the UNSC held discussions on important global issues and passed resolutions relating to UN peacekeeping operations and the situations in Mali, the Middle East, Somalia and Afghanistan. The landmark Presidential statement on maritime safety and security as a key component of the maintenance of international peace and security was a major highlight. This CUTS Occasional News Wrap reflects on India’s month-long stewardship of the UNSC as President, covering diverse opinions from various experts.

Quad vs AUKUS: Anglos & Alliances – India, Japan don’t enjoy the cultural affinity shared by English-speaking Western countries
The debate on whether the creation of AUKUS, a defence partnership between Australia, the United Kingdom and the United States, strengthens or weakens Quad, the Quadrilateral Security Dialogue between Australia, India, Japan and the U.S., will rage on. Proof of the pudding, as the English are wont to remind, will lie in the eating. There is an aspect to the distinction (Paywall) between AUKUS and Quad that has not received adequate attention. It centres around the concept of an Anglosphere, a grouping of English-speaking countries.

Four plus two minus
The first in-person Quad summit in Washington DC marked the start of 21st-century foreign policy. India, the U.S., Japan and Australia took the high road to “recognise that our shared futures will be written in the Indo-Pacific.” Buried in the Quad joint statement, this acknowledgement effectively pivots the Quad towards the oceans, China, and a whole new set of challenges that will test (Paywall) these powers as never before.

Hydrocarbon rich Mozambique a future military base for China?
Beijing looking for more naval bases in Africa shows its attempt to expand its strategic reach in the Indian Ocean and the African continent. By having a second naval base in Africa, China can be prepared for any contingencies in the Suez canal and can have a prescription for the 'Malacca Dilemma' phrased by Hu Jintao. African countries should note that such bases can pose big risks for them like grass getting crushed when two elephants fight.

 

India has collaborated with several nations across sectors to become a global leader in innovation: NITI Aayog CEO Amitabh Kant
India has collaborated with several nations across sectors like electronics and semiconductors, the blue economy, clean energy, health tech, and deep space research as it aims to become a global leader in innovation, NITI Aayog CEO Amitabh Kant said. Technology and innovation are among the primary engines of a nation’s growth and economic development. Many of the significant innovations during the pandemic were led by digitisation of businesses, Kant said at the Global Innovation Conclave organised by the Confederation of Indian Industry on Tuesday, September 21.

MeitY Startup Hub and AWS collaborate to support startup growth in India
The MeitY Startup Hub, an initiative of the ministry of electronics and IT (MeitY) has entered into a memorandum of understanding (MoU) with Amazon Internet Services Pvt. Ltd (AISPL), which undertakes the resale and marketing of Amazon Web Services (AWS) cloud services in India, to promote technology innovation and the sustainable growth of startups in India.

Startups playing key role in enhancing India-U.S. ties: Ambassador Sandhu
India has a unique startup ecosystem and there has been a significant push from the current government under Prime Minister Narendra Modi to encourage entrepreneurship through initiatives like Startup India and Digital India. Startups are playing an important role in enhancing the India-U.S. partnership, the country's Ambassador to the United States Taranjit Singh Sandhu has said. He was delivering a keynote address to a webinar on Opportunities in the Indian Startup Ecosystem and the deepening of India-U.S. partnership.
 
Nasscom CoE-IoT partners Taiwan-India AI Technology Innovation Research Centre
Nasscom Centre of Excellence for Internet of Things (CoE-IoT) said on Thursday, September 02, it has signed (Paywall) an intent of cooperation with Taiwan-India Artificial Intelligence Technology Innovation Research Centre, Taiwan’s largest university and incubator of startups under the National Chung Cheng University.

 

The Return of Taliban in Afghanistan
In mid-August, the democratically elected government in Afghanistan fell to the Taliban. By month end, the last of the U.S. troops stationed in Afghanistan had left, leaving Afghan civilians to a life under Taliban rule. The events in Afghanistan have led to geopolitical turmoil on a scale unseen in years. Regional stakeholders (China, India, Iran, Pakistan, Central Asia) and global powers (EU, Russia, UK, U.S.) are all scrambling to secure their vital interests. This edition of CUTS Occasional News Wrap considers the Taliban‘s march to power in Kabul, reflecting diverse opinions from various experts.

China’s debt-trap diplomacy? BRI participant countries owe over 385 billion USD to China in hidden debt, study reveals
The report published by AidData, an international development research lab based at the College of William & Mary in Virginia, USA, says that score of countries underreported their financial liabilities linked to China for many years now, resulting in mounting “hidden debts”, or confidential liabilities that the countries might be obligated to pay.

WHO, WTO and now World Bank, China Controlling Global Institutions is Disastrous for the World
It is time to accept that ceding Beijing the control of the levers of global power leads to disastrous consequences. Liberal democracies such as India and those that designed the post-War multilateral structure understand the need for independent institutions. They may chafe at the pressure such independence brings to bear on their own domestic and geopolitical actions, but appreciation of the importance of institutional strength and independence is in their DNA.
 
U.S. will look at Pakistan's role in last 20 years, Antony Blinken tells angry lawmakers
The U.S. will look at the role Pakistan played in the last 20 years, Secretary of State Antony Blinken told angry lawmakers who expressed outrage over Pakistan's "duplicitous" part in Afghanistan post 9/11 and demanded that Washington reassess its relationship with Islamabad. The U.S. lawmakers also urged the Biden administration to reassess Pakistan's status as a major non-NATO ally.