CUTS International Washington DC Center
Monthly Brief #44, November 2021
Two to Tango: Realising the Unmet Potential of Indo-U.S. Trade
The recent visit of the U.S. Trade Representative, Katherine Tai, along with the reconvening of the India-U.S. Trade Policy Forum (TPF) after four years, harkens to a revitalisation of Indo-U.S. trade relations. The American attempt to “course-correct” and propose “trade policies [in the Asia-Pacific] that will enjoy a broad base of support politically” provides much-needed impetus for collaboration on legacy and emerging trade issues between the two countries.
India had been keen on an interim ‘mini trade deal’ but the Biden administration desires to take incremental steps through routes other than trade agreements. While it is better to grow slowly than stand still, we should not lose sight of the immense benefits that a trade deal can offer. After all, the depth of the Indo-U.S. strategic partnership hinges upon an equal focus on positive economic engagement. Both democracies want to ensure a rules-based international order that can withstand increasing global techno-political bipolarity and weaponisation of trade instruments. In this context, two very important components necessitate prioritisation.
First, India and the U.S. have agreed to explore the role of critical and emerging technologies in increasing mutual prosperity and achieving strategic priorities within the Quad. This is an excellent development for collaboration on pressing issues of standard setting, transfer of technologies, data governance, and digital economy. Second, the decision to create regional as well as global supply chains that are resilient and inclusive is of significant import, especially in the context of securing pharmaceutical supply chains amid an uncertain pandemic.
Even as Working Groups in the TPF have been formed to resolve legacy trade issues (like agriculture and services); letting go of ‘past baggage’ requires that both parties move beyond a transactional, quid pro quo approach to trade negotiations. India’s acceptance of the OECD-G20 Framework on taxation and its recent openness towards discussion on issues of labour and environment are signals of her readiness to make significant trade commitments and look at the larger picture.
The U.S. too must keep India’s complex geopolitical and socio-economic compulsions in mind. Bipartisan consensus in favour of a waiver on CAATSA sanctions along with the re-authorisation of the GSP programme is required to propel the partnership forward. In the interim, to complement the TPF while the U.S. mulls over the feasibility of a trade deal, India should initiate talks on a standalone Bilateral Investment Treaty between the two countries to attract and align investments with shared objectives.
Pradeep S. Mehta

P.S.: U.S. invites Taiwan for its 'Summit for Democracy' – does it signal greater push for containment over cooperation with China?

Message for our Readers
This is the forty-fourth 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.
This newsletter contains copyrighted material whose use has not been specifically authorised by the copyright owners. Consumer Unity & Trust Society (CUTS) is making these articles available in our efforts to advance understanding of bilateral trade and economic issues. We believe that this constitutes a ‘fair use’ of the copyrighted material as provided for in Article 10 of the Berne Convention for the Protection of Literary and Artistic Works (Paris Text 1971) and in section 107 of the U.S. Copyright Law. If anybody wishes to use materials from this publication for purposes that go beyond ‘fair use’, s/he must obtain permission from the copyright owner. CUTS will not draw any profit from this publication, since it is solely for informative and educational purposes.
Readers are encouraged to send their own views and suggestions at:


Regular India-U.S. engagements under Trade Policy Forum will help removing barriers to trade: USIBC
In a statement, the U.S. India Business Council (USIBC) congratulated Commerce Minister Piyush Goyal and U.S. Trade Representative (USTR) Katherine Tai for a successful reconvening of the U.S.-India Trade Policy Forum and said that they are glad to see the robust agenda set forth by the leaders. "We’re encouraged with positive statements coming from both sides and are certain regular engagements under the Forum will help removing barriers to trade, facilitate higher levels of investment and increase two-way trade in goods and services," the USIBC said.

Deeper trade ties will benefit both India and U.S.
Over the past two decades, the partnership between the world’s two largest democracies and free-market societies has strengthened tremendously. From strategic cooperation to our deepening people-to-people ties, the gains have been impressive. In that time, trade and investment volumes between the United States and India have also experienced enormous growth but still lag behind our deepening strategic and cultural alignment. As the U.S.-India Trade Policy Forum begins, it is critical to address this shortfall.
Indo-U.S. trade partnership: Different approach, brighter prospects
Trade has been an area of divergence between both countries. Notwithstanding robust engagement in other spheres of global and regional geopolitics and geo-economics, trade has been a rare sore spot. The Trump Presidency complicated matters in this regard. During the Trump period, India and the U.S. actively discussed the prospects of a bilateral free trade agreement (FTA). India did, however, stay engaged with the U.S. on a bilateral trade deal. That the deal eventually couldn’t be pulled off has much to do with the insufficiency of trust and comfort between negotiators.
Biden admin settles for automatic job authorisation for spouses of H-1B visa holders
In yet another immigration-friendly move, the Biden administration has agreed to provide automatic work authorisation permits to spouses of H-1B visas holders, a step that would benefit thousands of Indian-American women. The settlement in this regard was reached by the Department of Homeland Security in a class-action lawsuit, which was filed by the American Immigration Lawyers Association (AILA) on behalf of immigrant spouses this summer.


Post-Glasgow, India should become a leader in the green energy drive
India should join with the United States and move to the front on the low-carbon transition drive. Not doing so would mean continued environmental degradation and would also result in missing out on the enormous economic opportunities presented by going green. As in most fields, early investors reap the most benefits. By becoming a leader in the green energy movement now, India can reap economic and climate change benefits for the nation and its citizens in the future.

The USA becomes the 101st member country of the International Solar Alliance
In a big boost to accelerate global adoption of solar energy, John Kerry, U.S. Special Presidential Envoy for Climate announced at the UNFCCC COP26 on November 10 that the United States of America has joined the International Solar Alliance (ISA) as a member country. U.S. becomes the 101st country to sign the framework agreement of the ISA to catalyse global energy transition through a solar-led approach. Welcoming the United States of America as the 101st member of the ISA, Union Minister for Environment, Forest and Climate Change, Bhupender Yadav said, that this move will strengthen the ISA and propel future action on providing a clean source of energy to the world.
U.S. set to release oil from reserve, will partner with India and others
President Joe Biden is preparing to announce a release of oil from the nation’s Strategic Petroleum Reserve in concert with several other countries, according to people familiar with the plan. The move, likely in conjunction with India, Japan and South Korea, would be an unprecedented effort by major oil consumers to tame prices after OPEC+ countries rebuffed U.S. calls to significantly boost production. China said it’s working to release some oil from its strategic reserves, days after the U.S. invited it to participate in a joint sale.

IMF welcomes India's announcement at COP26
We welcome India's announcement at the COP26 of new targets to increase reliance on renewables and reduce the carbon intensity of its economy, including to adopt net zero target by 2070, Gerry Rice, Director, Communication Department, International Monetary Fund (IMF), told reporters at a news conference. We are heartened by India's focus on achieving progress in the current decade given the urgent need for global mitigation action. And as with other countries, it will be important to follow through with specific actions to contain emissions over the current decade, he added.


The Putin Visit: Balancing Russia and the United States
Given India's geographical location, economic capabilities, defence and energy requirements and the long-term goal of ensuring sustained economic development, India is required to maintain good relations with both the U.S. and Russia. However, given poor U.S.-Russia relations India is often in a quandary in comprehensively addressing her national security challenges. What India therefore needs is a trilateral dialogue with the U.S. and Russia (RAI).

CAATSA sanctions against India will trigger significant blowback, warns influential U.S. think tank
Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions will trigger significant Indian political blowback, setting relations back a decade, suggested Stimson Center in its report titled “Toward a Mature Defence Partnership”. The United States should either issue India an enduring waiver or apply very light, symbolic sanctions once, with sufficient forewarning and dialogue with Indian leadership to mitigate political repercussions.

Australia seeks ‘More Proactive’ role in Indo-Pacific
Ambassador Arthur Sinodinos said Australia is increasing its defense spending to 2.5 percent of GDP to be prepared to play a greater role in security in the Indo-Pacific amid a growing threat from China. In September, Australia announced its AUKUS partnership with the United States and United Kingdom, along with a deal under which its partners will help the country acquire its first nuclear-powered submarines. Australia simultaneously cancelled a pending $90 billion deal to get conventional subs from French shipbuilding company Naval Group, causing a rift with the French government.

U.S.’s engagement with China is par for the course. Delhi should not panic, must enhance its global standing
India must carefully monitor the state of U.S.-China relations. But there is no reason for Delhi to panic at Washington’s engagement with Beijing. China is far too important for any major power to ignore it. India has continued its engagement with China even after the PLA’s aggression in Ladakh in 2020. Just last week, Delhi was coordinating its position at the COP26 with Beijing. All of India’s Asian and European partners have huge stakes in a productive economic relationship with China.


A collaborative tech vision for U.S., UAE, Israel and India
Last month’s meeting between the foreign ministers of India, the U.S., Israel, and the UAE has set foreign policy circles in India abuzz with talks of the potential emergence of another quadrilateral grouping or as analysts term it, a “new Quad”. The grouping discussed technology collaboration along with the joint infrastructure projects in transportation, enhancing political and economic cooperation and maritime security matters. They have agreed to set up an international forum for economic cooperation. Amongst all the issues discussed, the technology dimension of this partnership promises a far greater potential for collaboration.

U.S.-India defence industry expo: Officials focus on securing supply chain in critical sectors
Senior defence officials of the U.S. and India attended the Defence Industry Collaboration Forum Virtual Expo that focused on securing supply chains in critical sectors like the semiconductor industry, the Pentagon said. The expo was co-chaired by Jesse Salazar, deputy assistant secretary of defence (DASD) for industrial policy and Anurag Bajpai, joint secretary (Defence Industries). It was held in partnership with the U.S.-India Strategic Partnership Forum (USISPF) and the Society of Indian Defence Manufacturers (SIDM).

India changes gear to be in line with global powers on 6G tech
In line with what is happening on 6G technology in the U.S., Japan and China, India has asserted and assumed a leadership role as technology is expected to revolutionise communication, data, telephony, health services and majorly impact warfare. This is not just a technological leap. It will define how future wars are fought as battle field awareness, quantum computing and speed of data collection and dissemination will be the major factors.
Australia announces new consulate and centre to boost tech ties with India
Australia announced on Wednesday, November 17, that it will establish a new consulate in Bengaluru and set up a centre of excellence for critical and emerging technology policy in India as part of efforts to drive the technology partnership between the two countries. The new consulate will focus on deepening Australia’s ties with “India’s vibrant innovators, technologists and entrepreneurs” and support Australian businesses in “one of the world’s most important commercial centres”, foreign minister Marise Payne said in a statement.


World Economic Forum president lauds India's pandemic response, reforms
World Economic Forum (WEF) president Borge Brende has lauded the Modi government's "agile" response to the COVID-19 pandemic, its commitments at the recent COP26 summit and the structural reforms undertaken by it to boost the economy. Noting the structural reforms effected in the last few years by the government to boost the long-term outlook of the economy, he said it's vision to catalyse India's transformation is evident in the launch of initiatives such as the Gati Shakti National Master Plan and the 'Atmanirbhar Bharat' mission.

Physical connectivity in the Bay of Bengal
China is a clear winner in the physical connectivity stakes in the Bay of Bengal because of its strategic planning, large-scale investments, and an ambitious scope. Chinese projects connect to one another, from rail to the road to the port. An example is the proposed 2,800 km railway line connecting Kunming to Kolkata via Myanmar and Bangladesh. India should be doing more to invest in the vast maritime potential of the Bay of Bengal, where it trails China in maritime infrastructure and has not maximised the potential of the critical Andaman and Nicobar Islands that give India access to critical sea channels and trade routes.

Dynamism in India-U.S. ties
The trajectory of India-U.S. bilateral ties continues to go up. While there are regular interactions (Paywall) among officials at various levels and across sectors, as well as people-to-people engagement, there are no formal interactions between Members of Parliament in India and members of the U.S. Congress.
Operating environment more favourable in India than China: UKIBC Chief
The UK India Business Council (UKIBC) chair Richard Heald says that India offers a more "favourable opportunity and operating environment" for businesses, as compared to China. This is because of "ease of doing business, because of transparency, (and) rule of law that exists". UK is the 6th largest inward investor in India, after Mauritius, Singapore, Netherlands, Japan, and the USA with a cumulative equity investment of $28.39 billion.