CUTS Washington Monthly Brief
#1, April 2018

Indo-US Ties Yet to Realise Full Potential  

So said Arvind Subramanian, Chief Economic Adviser, Govt of India at the launch of CUTS International Washington Center in DC on 19th April. “The launch of CUTS Washington Center is a historic moment in having an India-based organization opening a Center in the US to advance India’s emerging role in the Indo-Pacific Region”, added Ambassador Alice Wells, Principal Deputy Assistant Secretary for South and Central Asia, US State Department, Washington DC.

The Center will focus on Trade, Energy and Strategic Issues – three areas deemed most critical to growing US-India relations and the Indo-Pacific region. This event was also significant in the context of Indo-Pacific and the presence of dignitaries from Quad nations – Australia, India, Japan and US – underlined this significance. Two panel discussions were organised under the rubric ‘ Buttressing US-India Economic Relations’ to mark this launch and guide the Center’s activities. [ Event Report] CUTS International Launches Centre in US, Business Standard, April 20, 2018.

This is the first edition of the monthly brief from the Center, which carries select published news or comments on a relevant issue. There are equally important issues which may have been missed out to keep the Monthly Brief short and swiftly readable. Readers are encouraged to send their own views and suggestions at: cuts-washington@cuts.org.

Trump to Tap into US-India Trade Potential

From his first day in office, President Trump has jettisoned multilateral agreements, previously the hallmark of US global economic leadership, instead favoring bilateral agreements as his modus operandi. One of his first actions in office was to withdraw from the Trans-Pacific Partnership (TPP), which remaining 11 nations signed on March 08, 2018. [ Full Story]

Japan-Australia FTA brings New Tariff Cuts

The fifth round of tariff cuts under the Japan-Australia Economic Partnership Agreement (JAEPA) came into effect on the first day of April, delivering wide-ranging benefits for Australian businesses that will help drive exports and create new jobs. “The new tariff cuts will boost Australia’s already vibrant trade and investment relationship with Japan, our second-largest trading partner and the world’s third largest economy,” minister for trade, tourism and investment, Steven Ciobo announced. [ Full Story]

Working with US to Resolve Trade Issues
In the backdrop of the US putting India on its currency monitoring list and deciding to review India’s eligibility to enjoy duty-free access for certain products under a tax benefit scheme, the Union Commerce Minister of India Suresh Prabhu said that the Central Government is actively working with the US to resolve all trade issues. [ Full Story]
IMF’s Lagarde Warns China on Belt and Road
Christine Lagarde, International Monetary Fund’s (IMF) Managing Director, warned Chinese policymakers to beware of financing unneeded and unsustainable projects in countries with heavy debt burdens. She said that while China’s Belt and Road Initiative could provide much-needed infrastructure, ‘ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises, and creating balance of payments challenges’. [ Full Story]
India-US Strategic Energy Partnership
Modi Calls for Responsible Energy Pricing

The US may collaborate with India on its crude oil reserve programme as part of a strategic energy partnership that covers sectors such as oil and gas, power, renewable energy and coal. Currently, state-run Abu Dhabi National Oil Company (ADNOC) is the only one to partner with India to shore up its crude reserves and participate in India’s strategic petroleum reserves programme. [ Full Story]

India called for a global consensus on ‘responsible pricing’ in the backdrop of rising global oil prices after the Organisation of the Petroleum Exporting Countries (OPEC) and Russia cut supplies. Inaugurating the 16th International Energy Forum Ministerial (IEF-16), Indian Prime Minister Narendra Modi said, “We need more responsible pricing which balances interests of producers and consumers.” [ Full Story]
India at Centre Stage of Global Energy Affairs
Trump's Stance on Renewable Energy

The global energy landscape is fast changing to reflect the new reality, ranging from the US becoming an energy exporter to the West Asian economies turning into major energy consumers, and China moving towards clean energy. India is moving to the centre stage of global energy affairs, and the International Energy Agency (IEA) is keen that the world’s third-largest energy consumer becomes its full-time member, making the body stronger and more representative. [ Full Story]

President Donald Trump has courted coal miners and cast doubt on whether fossils fuel contribute to climate change, but that has not translated into hostility for renewable energy – particularly offshore wind. Using federal offshore leases, wind power projects along the East Coast, including off the shores of Massachusetts, New Jersey, Connecticut, Virginia and New York, are pressing ahead with the goal of transforming the electric grid and providing energy to power millions of homes. [ Full Story]
Lockheed Martin Offers F-35 JSF to India
A New High: India-Japan Defense Links

Lockheed Martin will provide latest combat jet technologies including a target tracking device aboard the F-16 aircraft that it plans to offer to India in its bid for the world's largest order from the Indian Air Force. The global defence giant will offer jets equipped with the advanced radar which is fitted on its fifth-generation combat jet, the F-35, as well as a helmet-mounted tracking system... [ Full Story]

An unexpected partnership was forged at India’s defense exhibition, DefExpo 2018, in Chennai. For some time, India has been in negotiations with Japan to purchase more than a dozen US-2 amphibious aircraft for the Indian Navy and Coast Guard. Considered the world’s best amphibious aircraft for short take-off and landing, with a range of up to 4500 kms, these flying boats are used for surveillance... [ Full Story]

Substance and optics of the Wuhan summit
Imposing Sanctions on India will Hit US

The recently concluded ‘informal’ summit meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping in Wuhan was more about optics than substance. That doesn’t take away from the fact that the summit was a much-needed one and has added to the ongoing attempts to bring the bilateral relations between the two Asian giants back on track.  [ Full Story]

US Defense Secretary Jim Mattis appealed to the Congress to urgently provide India national security waiver, saying imposing sanctions on it under the newly-enacted Countering America's Adversaries Through Sanctions Act (CAATSA) law for buying the S-400 air defence missile system from Russia would only hit the US. India is currently in an advance stage of negotiations with Russia on this deal, which is worth an estimate US$4.5bn. [ Full Story]

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