Can Trump-era turbulence in the U.S.-India relationship be effectively managed?

by Harsh V Pant

In the end it was much ado about nothing, really. All the recent hyperventilation of the Indian strategic community was really an exercise in vanity. Grand deductions were being made about why the United States cancelled the much anticipated “2+2 talks” with India, set for July 6. It turned out that it was indeed a scheduling problem with U.S. Secretary of State Mike Pompeo actually having to go to North Korea to salvage that diplomatic process, which is seemingly on the verge of collapse. Trump’s outreach to North Korea is his signature foreign policy achievement so far and he would want to preserve at the least the appearance that it retains some traction. It’s not surprising, therefore, that India would be asked to wait. Nikki Haley’s visit to India last week is no coincidence either. It was meant to convey that even as the 2+2 was postponed, India will remain an important focus area for the United States.

India shares an interesting relationship with the United States. While many in India would like to pretend that New Delhi couldn’t care less about Washington, every sign emanating from Washington is also being overanalyzed. If a U.S. president doesn’t mention India or if an official meeting had to be postponed or canceled, it is read as a sign in New Delhi that the India-U.S. relationship is heading off a cliff. The reality is that India’s relations with the United States have today matured enough that underlying structural and institutional variables can propel the bilateral relationship in a positive direction for quite some time. Both in India and the United States, top political leaders, cutting across party lines, are invested in making this relationship work.

Even a U.S. administration as transactional as Donald Trump’s has largely made all the right noises about India. If Prime Minister Narendra Modi could argue that India and the United States have overcome “the hesitations of history” under the Obama administration, he wooed the Trump administration during his initial outreach when he suggested that “the convergence of my vision for ‘New India’ and President Trump’s vision for making America great again will add new dimensions to our cooperation.” He managed to steer Trump toward the larger structural realities that have driven the India-U.S. relationship since George W. Bush declared that America would help India emerge as a global power. Trump’s South Asia strategy has also taken Indian concerns into account and his emphasis on the “Indo-Pacific” is in tune with Indian thinking.

There are indeed problems and in a relationship as broad and deep as the one between India and the United States today, that should be par for the course. There’s the persistent Iran question, for example, which has come to the fore with the United States asking all countries, including India, to reduce oil imports from Iran to zero by November 4. Indian companies will face sanctions if India fails to comply. The Trump administration has taken a maximalist position on Iran and is willing to brook no dissent in the matter.

India’s defense ties with Russia are another point of contention as India is in the process of purchasing S-400 surface-to-air missile systems from Russia. As per the U.S. Countering America’s Adversaries Through Sanctions Act (CAATSA), sanctions can be imposed on countries that engage in “significant transactions” with any of the listed 39 Russian companies. India has close defense ties with Russia and the Indian armed forces remain highly dependent on Russian from cooperation on strategic technologies to supply of spares, maintenance, repair, and overhaul.

Trade is the third leg of this triad that is generating tension, with the Trump administration pushing New Delhi to lower its trade barriers. Trump has accused New Delhi (along with other major economies) of charging 100 percent tariffs on some U.S. goods, and threatened to cut trade ties with them. India has announced its retaliatory tariffs on 29 U.S. products worth some $235 million to come into effect on August 4, in response to the U.S. move to unilaterally raise import duties on Indian steel and aluminum.

Together these issues have raised the specter of India-U.S. ties once again going back to the good old days of recriminations and wrangling. Some in New Delhi have even welcomed this, gleefully underlining their own dire warnings about the dangers of relying on the United States as a partner. But there have always been issues on which the United States and India had been on the opposite sides. Even when the U.S.-India civil nuclear pact was being negotiated in the early 2000s, India’s ties with Iran were brought up by interested parties to derail the process. Today when Iran has bounced back, India is not the only nation being targeted by Washington. On all the three issues of contention, the United States is challenging the rest of the world and, in all the three cases, India is not really the central player.

India is trying to seek exemptions from the sanctions and is also working on alternate payment mechanisms so as to continue to make purchases from Iran. But the private sector will not stick to Iran even if the Indian government may so desire. They are most likely to pull out of Iran, making the hue and cry in Indian largely redundant. The Russia case is different and the Trump administration has also defended India before the U.S. Congress, calling for an exemption for India. It recognizes the setback to India-U.S. defense engagement if the CAATSA sanctions are to be implemented. It has also indicated that India may receive a waiver for the development of Chabahar port in Iran.

While the Trump administration’s transactional approach is generating some turbulence in the India-U.S. relationship, New Delhi retains the ability to confidently to bear this out as the fundamentals of the relationship remain as strong ever. As a self-confident emerging power, India should take the lead in shaping the terms of engagement of its partnership with the United States, rather than getting carried away by the surrounding noise.