CUTS Washington Monthly Brief
#5, August 2018

From the Editor’s Desk 


2+2 Dialogue – Importance & Implications for India

On 6th September 2018, India and the United States will hold the first edition of 2+2 dialogue on Foreign and Defence affairs. The dialogue format was agreed between the two sides during visit of Prime Minister Narendra Modi to Washington D.C. in June 2017. The two sides are expected to share perspectives on strengthening their strategic and security ties and exchange views on a range of bilateral, regional and global issues of mutual and strategic interest.

The dialogue assumes special significance in the backdrop of continued trade wars and US withdrawal from the Iran nuclear agreement, which have resulted in some tensions between India and the United States, even though relations between the two countries were on the right track. The highly contested Indo-Pacific region and India-US relationship in that context is also expected to influence the dialogue.

Already twice cancelled, the outcome of 2+2 dialogue is expected to be analysed in great detail. For that matter, India's preference for strategic autonomy and strategic alignment holds great significance in steering the dialogue's agenda.

                                                Pradeep S. Mehta


P. S. Trump has once again threatened walking out of the WTO, a body which was created by many rich countries lead by the USA. If this did happen, it would be a disaster.

Message for our Readers
This is the fifth 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.
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Easing tensions: on U.S.-Mexico trade deal

Amid rising global trade tensions, there are some signs to hope that all is not lost. The United States and Mexico reached a breakthrough bilateral trade agreement replacing the decades-old North American Free Trade Agreement (NAFTA) after Mexico agreed to concessions demanded by the Donald Trump administration.


Countering the looming shadow of China

As the US-China ‘trade war’ continues, India should find opportunities in this impending realignment in global trade. Now is the time to strengthen ties with the US and to beware of deeper economic engagement with China. Importantly, India is working to build its industrial base, strengthen manufacturing, and develop home-grown companies that can compete in global markets. America can be an important long-term partner in fulfilling these objectives.


US tariffs see small businesses plead for mercy as trade war bites

One by one, they paraded before a panel of US administration officials this week to plead for mercy in the escalating trade war with Beijing, at a public hearing on the $200bn in new tariffs threatened by Donald Trump against imports from China.

Commentary: Accepting US tariff exemptions a betrayal to countries facing a trade war

US tariffs on steel and aluminium imports to protect American steelmakers and, putatively, to reduce trade deficits, as well as other protectionist measures now aimed at China, may not have large, immediate economic effects but they pose a bigger and long-term threat to the entire global rules-based system. Some countries, including Australia, have received exemptions from the US steel and aluminium tariffs. By accepting those exemptions, they have failed their obligations to the rules-based order.


Amid sanctions, India’s crude oil imports from Iran jump 41 per cent in July

India’s crude oil imports from Iran jumped a whopping 41 per cent to 3.1 million tonne last month. India is among the largest importers of Iranian oil and the jump in imports comes amid increasing US pressure on Iran’s oil customers to cut purchases.  

Cross border power trade to double at 5 GW by 2020 in South Asia: Juster

US Ambassador to India Kenneth Juster said cross border electricity in South Asia is expected to be doubled to 5,000 Mw in view of rising demand. "Presently, approximately 2,500 Mw of electricity is traded in the region, a figure expected to double by the end of 2020," Juster said.

US federal agency to work with Indian co on carbon capture storage and utilization tech

Through its partnership with MN Dastur & Co, a premier consulting firm in the metals, mining and energy sector, the US Department of Energy and its National Carbon Capture Center (NCCC) envisions to accelerate the participation of government of India institutions and the Indian private and state enterprises in the development and commercialisation of technologies to reduce greenhouse gas emissions.

Trade Fears Throw Future of U.S. Natural Gas Into Question

U.S.-China trade tensions threaten a promising area of growth in U.S. energy: natural-gas exports. While the trade dispute hasn’t impacted near-term prices, some analysts believe it could disrupt exports and slow new infrastructure expansions.

Dharmendra Pradhan blames "isolated" American policies for fuel price rise

Union Minister for Petroleum and Natural Gas Dharmendra Pradhan blamed the "isolated" policies of the US for the "abnormally" rising fuel prices in the international markets. He said the Centre is concerned about the spiralling prices of petrol and diesel and is taking all measures to check them.



2+2 to establish India as major defence partner of United States 

The maiden India-US 2+2 Dialogue in Delhi on September 6 will see deliberations on operationalisation of India’s status as major defence partner of the US in wideranging areas, from defence acquisition to communication arrangement to Indo-Pacific partnership. 


India and the U.S. — it’s complicated 

The first round of the India-U.S. 2+2 talks at the level of External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman and their counterparts Secretary of State Mike Pompeo and Defence Secretary James Mattis is scheduled for September 6 in Delhi. It is a significant development but one that appears perfectly logical when seen against the two-decade-old trend line of India-U.S. relations.


India, Russia defence trade tries to beat US sanctions amid hurdles

India and Russia are finding ways to work around US imposed financial sanctions on Moscow but challenges remain on big defence contracts, including the `39,000 crore deal for S-400 air defence system that is expected to be inked later this year.


India, Japan resolve to deepen maritime cooperation

India and Japan decided to expand their maritime cooperation and work together to ensure peace and stability in the Indo-Pacific region, which is witnessing growing Chinese assertiveness, officials said. The two countries also decided to hold the first-ever joint Army exercise later this year besides deepening cooperation in co-development of military hardware and weapons.

India-Indonesia Relations and Indo-Pacific Security

Though India and Indonesia do have long historical and cultural linkages, strategic partnership has been a recent development. The two share multiple common concerns, one of which pertains to China’s rapid rise and its intentions in the maritime theatre.


Opinion | Don’t strangle Indian e-commerce

E-commerce in India is facing huge buoyancy, both in terms of the market and policy space. In terms of the market, the majority investment in Flipkart by US retail giant Walmart, and a substantial proposed investment by Alibaba in Reliance Retail recently made news. Some pundits say that some of these moves may result in market distortions. Apparently, vested interests are muddying the waters.


BIMSTEC eyes higher profile, visibility in Indo-Pacific region

Ahead of the fourth summit of a regional economic grouping straddling South Asia and South-East Asia, member nations are seeking a higher profile for the body and its revitalization through concrete steps like a free trade pact and improved connectivity.


H1B Is a Gamble, So We’re Coming Home: Young Indians in America

US President Donald Trump has been changing the H1B visa policies – instrumental for the young Indian student or professional looking to work in America – at a rapid pace since his election, leaving many of these dreamers with little option but to force-exit the country and come back to their homeland.


China is building a new Silk Road, and this one is digital

The Silk Road calls to mind an image of the distant past, where traders traversed the vast expanse of Eurasia in pursuit of silk, spices and various other commodities. Today, China is attempting to revive these once forgotten routes as part of Xi Jinping’s signature Belt and Road Initiative.