CUTS International Washington DC Center
Monthly Brief #45, December 2021
New Year, Old Friends: A Wish List for Indo-U.S. Relations in 2022
2021 was a difficult year for India and the United States, with both countries being ravaged by the pandemic. Yet, 2021 was also a rewarding year for the bilateral relationship. There was deepening of the relationship on strategic fronts, forward movement on the climate partnership, and resumption of dialogue on the trade front. There were multiple high-level meetings between the two sides, including a visit by the Indian Prime Minister to the U.S. As we enter the new year, Indo-U.S. relations are poised to touch greater heights. What will be the elements of a 2022 wish list for further enhancing Indo-U.S. relations?

On the strategic front, India and the U.S. must closely coordinate with like-minded countries to contain China’s increasingly aggressive sabre-rattling in the Indo-Pacific and beyond. This could begin with arriving at a consensus on the geographic contours of the region, and synergy on flashpoints like the Indo-China border, Taiwan and the South China Sea.

Further, on the ambitious Quad and AUKUS initiatives that materialised this year, the focus in 2022 must be on delivery. For instance, the world will have its sights on the Quad promise to deliver a billion vaccines by the end of next year.

On trade, the resuscitation of the Trade Policy Forum (TPF) is a welcome development. Efforts must be made to ensure substantive progress on resolving outstanding bilateral trade frictions before an inter-sessional TPF meeting scheduled for mid-2022. Restoration of India’s status as a beneficiary of the U.S. GSP programme is low-hanging fruit which can set the stage for further talks. Multilaterally, the U.S. must recommit to meaningful engagement at the WTO.

The tracks under the U.S.-India Climate and Clean Energy Agenda 2030 Partnership, as well as closer co-operation under the aegis of the International Solar Alliance (which the U.S. has recently joined) must be pursued in a focused manner. These will be important pillars to meet India’s goal of 450 GW of renewable energy by 2030.

In his remarks at an event in New Delhi in July, Secretary Blinken had said, “I think it’s hard to find countries with more - who do more together in more different areas than with the United States and India.” It is this spirit which must guide Indo-U.S. cooperation in 2022.                                         
Pradeep S. Mehta

P.S.: Will the Omicron variant of the coronavirus derail the gradual economic revival that was underway globally? Will the public health advances made in the past two years prove resilient?

Wishing an exciting and productive new year to all our readers!

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Arriving at an equitable response to the pandemic
The Doha Declaration on TRIPS and public health clarified pre-existing flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It also waived those obligations that prevented the export of life-saving drugs produced under compulsory licenses to countries without adequate manufacturing capacity.

2022 could be the year of free trade pacts for India
Backed by this impressive export performance, a confident India is now seeking to forge several free trade agreements (FTAs). This is a complete turnaround from 2019 when India had walked out of the Regional Comprehensive Economic Partnership, the mega-regional trade agreement of East Asia.
India-U.S. Trade Policy Forum has key role in deepening understanding of each other's positions: Arun Kumar
The India-U.S. Trade Policy Forum has a key role to play in deepening the understanding of each other's positions in a non-negotiating, non-transaction-oriented setting, according to Arun Kumar, Chairman and CEO of KPMG India and former Assistant Secretary of Commerce for Global Markets and Director General of the U.S. and Foreign Commercial Service in the Obama administration.
India, U.S. make the right moves to improve trade ties
At a recent event held in New Delhi, minister of commerce and industry Piyush Goyal stated he was eyeing an ambitious bilateral, trade target of trillion dollars between India and the U.S. by 2030. Currently, that number is $150 billion. Goyal stated that “posterity would hold us responsible for not getting these two democracies together”, and that it behoved Washington and New Delhi with their shared democratic values, the diaspora connect, and synergy across technology and innovation to further this trade partnership, in order to benefit the global community at large.


Energy connectivity in the Bay of Bengal
The Bay of Bengal is a region with significant energy potential. Several Bay of Bengal countries - especially Myanmar, Nepal, and Bhutan - are rich in hydropower but do not have the resources to build dams or have the electricity demand to justify the expense. Bangladesh and most of India are net energy importers with large populations and growing demand, providing a ready market to make projects viable. What would seem a natural match remains unexplored? No projects in the region connect three or more countries - for instance, Nepal-India Bangladesh.

EU plans to finish green investment rules for gas and nuclear next year
The European Commission plans to finish next year its long-awaited rules on whether to label gas and nuclear energy as climate-friendly investments under EU green finance rules, its environment policy chief said on Monday, December 20. The European Union's executive Commission is considering whether to include nuclear and natural gas in its "sustainable finance taxonomy", a rulebook that will restrict which activities can be labelled as climate-friendly investments.
Mutual big investments will enable India and Russia to navigate geo-politics
Large investments in each other’s economies including in the energy sector will give both India and Russia an even bigger stake in each other’s long-term welfare. This will provide ballast if the two countries have to negotiate with each other over the complex geopolitical dynamic of the region, suggested Mumbai-based think-tank The Gateway House in its recent report titled, “India-Russia: Energy and economic security” published days after the 21st edition of India-Russia annual summit.

Local content requirements threaten renewable energy uptake
The world's ambitious plans to reduce reliance on fossil fuels are likely to be costly for consumers and governments in the short term even as the long-term benefits are clear. Yet, the United States and many other countries are adding needless costs by insisting on locally produced solar panels, wind turbines, photovoltaic (PV) cells, and other renewable energy products. Such requirements make renewables more expensive than necessary - thereby aggravating rather than mitigating climate change.


China: Contextualising the duality in actions
In the recent past, the Chinese offensive has taken new shapes and attitudes towards India and the world. China is employing both offensive and defensive postures to build up as a dominant power in the world. This is particularly so in Asia as it does not want to share political space with India.

Russia and China won't be 'best friends forever'
It would be unreasonable to think China and Russia are complicit in making provocations over Ukraine and Taiwan. Their mutual trust is not deep enough for such a maneuver. Even so, the Chinese and Russian militaries have been teaming up for a wave of provocative moves in Asia and Europe. In late October, 10 vessels from the two navies passed through the Tsugaru and Osumi straits, almost circumnavigating the Japanese archipelago. Military experts believe the Chinese military invited its Russian counterpart for the operation.

Third India-Central Asia dialogue: Shifting gears of India’s Central Asia policy
The third India-Central Asia Dialogue held in Delhi on December 19, has exhibited an exalted mutual trust and cooperation between India and Central Asia. Indeed there is a huge potential between the two regions. Consistent mutual contacts at multiple levels are the key to the success of bilateral and regional cooperation. Indian External Affairs Minister S Jaishankar met all five of his counterparts bilaterally and jointly and highlighted the need to work on 4cs- commerce, capacity enhancement, connectivity, and contact.

India is vital strategic partner, plays role in maintaining free open Indo-Pacific: U.S. Senate Committee
With more than 1.3 billion people and the sixth-largest economy in the world, India is a vital strategic partner for the United States. As a member of the Quad - alongside the U.S., Japan, and Australia - India is playing a greater role in helping maintain a free and open Indo-Pacific said Bob Menendez, Chairman U.S. Senate Foreign Relations Committee on Tuesday, December 14, during the Committee hearing to consider the nomination of Eric M Garcetti to be Ambassador of the U.S. to India.


Covid-19 Impacts on Adoption of Artificial Intelligence
Global Trade & Innovation Policy Alliance (GTIPA) released its crowd-sourced report for 2021 “GTIPA Perspectives: Covid-19 Impacts on Adoption of Artificial Intelligence”. This report provides GTIPA members’ perspectives on how the Covid-19 pandemic has inspired AI-driven innovations in their countries. The report consists of informative vignettes on how new start-ups, existing companies, and government agencies have leveraged AI or machine learning to develop products or solutions that have helped usher global society through the pandemic.

How foreign policy will decide where India gets its semiconductor chips from
This year, car buyers and salesmen found themselves discussing geopolitics as automobile inventories shrunk and delivery timelines got extended. Moreover, global car production is set to shrink by one million due to Covid-19 related chip shortages (Paywall). While this “shortage economy” might be an unplanned simulation of future supply chain wars, the weaponisation of supply chains is inevitable when they extend across geopolitical rivals.

India, United States, Israel should pursue a defense innovation triad
Rapid technological advancements today will ensure that those nations which harness and adapt them will be ahead of their competitors. Hence, the United States, India and Israel need to join hands to expand their advantage. The logic of undertaking such an effort becomes even more apparent in the face of the challenge of a once-in-a-century pandemic of Covid-19, which has strained economies and resource mobilization and distracted many countries from their strategic goals.
India plans a Rs 76,000 crore ($10.25 billion) red carpet for semiconductor companies
The government is planning to provide incentives worth Rs 76,000 crore ($10.25 billion) towards setting up over 20 semiconductor design, components manufacturing and display fabrication (fab) units over the next six years, in a bid to make India a hub for electronics.


U.S. plans diplomatic boycott of Beijing Winter Olympics
The U.S. will stage a diplomatic boycott of the upcoming Winter Olympics in Beijing to protest Chinese human rights abuses. ‘U.S. diplomatic or official representation would treat these games as business as usual in the face of the PRC’s egregious human rights abuses and atrocities in Xinjiang, and we simply can't do that,’ White House press secretary Jen Psaki told reporters.

Vaccine delivery under Quad framework to commence in early 2022: Shringla
During an interaction with U.S.-India Strategic Partnership Forum (USISPF) on 'Looking Ahead: The U.S.-India Strategic and Commercial Partnership in 2022', Foreign Secretary Harsh Vardhan Shringla said as the two countries close the chapter on 2021 and usher in 2022, they are also looking at continuing their engagement under the Quad framework. With two-leader level summits this year and several working groups set up to address contemporary priorities, we have our task cut out to implement the vision of our leaders for a peaceful, prosperous and stable Indo-Pacific.

India situated in 'tough neighbourhood' says Biden's pick for U.S. envoy to India
Observing that India is situated in a “tough neighbourhood”, U.S. President Joe Biden’s nominee for next envoy to New Delhi on Tuesday, December 14, told lawmakers that he will double-down on America’s efforts to strengthen India’s capacity to "secure its borders, defend its sovereignty and deter aggression".
‘An urgent matter’: Biden warns democracy is under threat at summit
During the virtual Summit for Democracy, U.S. president Joe Biden said “This is an urgent matter on all our parts, in my view, because the data we’re seeing is largely pointing in the wrong direction.” He cited studies that found that global freedom has now been in retreat for 15 consecutive years and that more than half of all democracies experienced a decline in the past decade.