“India-US relations will not be at the expense of Russia-India relations as long as they are not at the expense of the US.”
New Delhi: The annual India-Russia Summit in New Delhi on December 6 culminated in new defense treaties and more than two dozen pacts in various areas. On the sidelines, Russian Foreign Minister Sergei Lavrov welcomed the S-400 anti-aircraft missile system deal with India and openly accused the United States of undermining Indo-Russian cooperation and trying to get India to “obey American orders”. The Delhi-Moscow bonhomie was closely watched in Washington, with a distinct unease about the impact the S-400 deal could have on India-US relations. In this far-reaching interview, Dr. Mukesh Aghi, President & Chief Executive Officer of the US-India Strategic Partnership Forum, stated that the US will not impose any sanctions on India under the CAATSA for S-400s, as India can and will take such a step – US partnership has been around for decades only benefit the US’s main adversaries, China and Russia. Mr. Aghi also spoke about the prospective agenda for the 2 + 2 dialogue between the foreign and defense partners of India and the US and the future path of the India-US economic partnership. Excerpts:
Q: From an India and US economic perspective, there is some good news. The meeting between Secretary of Commerce and Industry Piyush Goyal and US Trade Representative Katherine Tai revitalized the India-US Trade Policy Forum. How much do you think this revitalization will help revitalize the larger economic ties?
A: Well I think you now have a platform, a platform where you can bring up the issues and have an open discussion. There is a process now. If you have lawyers and bureaucrats who focus on commas and semicolons in an agreement, you won’t be entering into a commercial contract. We have spoken between the US and India for over 20 years and the same problems persist. And we are constantly adding more topics such as the APS withdrawal. We have to think outside the box in order to take the economic partnership between India and the US to a higher plateau.
Q: What is the prospect of more American FDI coming to India? Do you think American companies are now reacting better to India’s investment climate?
A: There are three factors at play here. First, China has become a risk factor. Companies are wondering where is my China plus one strategy? Second, India has gone to great lengths to make it easier to do business and make India itself a better investment destination. Programs such as Production-linked Incentive (PLI) encourage US companies to look at India from scratch. Third, there is an abundance of capital in the US. The cost of capital in the US is now almost zero. The combination of all three things is driving more FDI to India. If you talk to investors in America, the interest in India is extremely high. The Indian economy is growing. They want to be part of this resurgent economy.
Q: What is the status of negotiations on a free trade agreement between India and the US? Do you think this is going on?
A: We started the process. But the question is, are we going to try and make the ocean boil? Or shall we say – do we take small bites, leave them chewable and move on to the next bite and the next bite? For me, this could be a better approach than trying to bring the ocean to a boil.
Q: India and the US planned a 2 + 2 dialogue between their foreign and defense ministers. It seems that it has now been postponed to January next year. What will be the main topics on the agenda?
A: The 2 + 2 will focus more on geopolitical issues. It’s getting strategic. The two sides will definitely talk about China, Afghanistan, terrorism, cybersecurity and defense cooperation between the two countries.
Q: Do you have a wish list for the 2 + 2 dialogue?
A: Our wish-list is that we should take a closer look at the quad. Let’s look at how we are basically driving an economic agenda under the umbrella of Quad. If you look at the combined GDP of the four quad countries, it’s over $ 32 trillion. India needs infrastructure investments worth at least one and a half trillion dollars. There are many synergies between the two countries. Japan has the funding and the expertise. Australia is a high-tech environment. If the quad is focused on its economic agenda, it will bring tremendous benefits to the world.
Q: You are here in India at a time when we were just having the India-Russia Annual Summit where India and Russia signed some defense deals, including a $ 700 million deal to make assault rifles together. Russian Foreign Minister Sergei Lavrov attacked the US, accusing it of undermining the S-400 deal. Do you see the S-400 deal resulting in US sanctions under CAATSA?
A: I think it is in Russia’s best interest that the Anti-American Adversaries Through Sanctions Act (CAATSA) be imposed on India. It is in China’s interest that CAATSA is imposed on India. For (Russian Foreign Minister Sergei) Lavrov it was undiplomatic to proactively harass the United States at a summit with India. India-US relations will not be at the expense of Russia-India relations as long as they are not at the expense of the US. It is important to understand that India retains its strategic independence here. If CAATSA is imposed, my position is that India is a sovereign nation. It has the right to decide which devices to buy and from whom. And at the same time, if we look at the S-400, which is more China-centric than anyone else, then it is only serving the US interest. From that perspective, I don’t think Joe Biden’s government will impose CAATSA sanctions on India for purchasing S-400. If sanctions are imposed at all, it will cement the relationship between the US and India by several decades.
Q: So it is in the greater interests of the US, and given the broad bipartisan consensus on maintaining the momentum in the relationship, it is extremely unlikely they would consider taking such a move.
Q: In ten months time, how do you rate the quality of relations between India and the US under President Biden? In Donald Trump, we had a whimsy politician who was prone to all sorts of theatrics. Do you think the partnership is more stable now?
A: Relations between India and the US are more mature; there is more predictability and there is a feeling of a consultation process between the two countries. Above all, it is accepted that the two sides may have different points of view in some areas, and that is respected. Now we don’t have any transaction issues like Harley Davidson in the way.
By and large, the Biden administration takes a much more structured approach to dealing with India than the Trump administration, which has been very transaction-oriented. Now they are putting all the building blocks together in areas that range from healthcare to technology. I am very optimistic and see that India-US relations go further, higher and deeper in every way.
Manish Chand is the Founding CEO of India Writes Network, India and the World Magazine, and Center for Global India Insights, a think tank focused on global affairs.