CUTS Washington Monthly Brief
#6, September2018

From the Editor’s Desk 

Optimising Indo-U.S. relations in the broader Indo-Pacific Context
The first Indo-U.S. ministerial 2+2 dialogue sets the base for scaling Indo-U.S. relations in the broader Indo-Pacific Context. The two countries are not only committed to expand two-way trade in defence items, but also foster equipment compatibility and manufacturing supply chain linkages. This looks promising in the backdrop of the U.S. designating India as a major defence partner, and accordingly Strategic Trade Authorisation (STA-1) status upon India. Among others, the unique role of technology and innovation in the U.S.-India defence partnership was a part of this dialogue, along with the signing of Communication Compatibility and Security Agreement (COMCASA) that will enhance India’s defence and security capabilities. On the Indo-Pacific, the two countries reaffirmed to join hands together and with partners to create an open, free and inclusive Indo-Pacific to support regional infrastructure development based on the centrality of the Association of South East Asian Nations (the ASEAN region).
Incentivising People to People linkages by way of promoting free flows of ideas and information besides collaboration in health, space, oceans, and other areas of science and technology is also a welcoming pledge by the two countries.
Amidst, these positive outcomes, issues related to the U.S. sanctions on Iran vis-à-vis their impact on India and the waiver under Countering America’s Adversaries through Sanctions Act (CAATSA) remain to be a sticking point. India has strong relations with both Iran and Russia that have to be maintained, for economic and strategic reasons. Before India is forced to work out alternative mechanisms to protect its interests, the U.S., for the sake of optimising the commitments made in the 2+2 dialogue, must address the remaining concerns
                                                                                                                                     Pradeep S. Mehta
P.S. The Trump administration has threatened to impose sanctions on multilateral institutions such as the International Criminal Court (ICC), which will have detrimental effects on the existing global rules-based system.

Message for our Readers
This is the sixth 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.
We are also present the 1st Quarterly Progress Report of the Center, which may be downloaded from this link - 

Readers are encouraged to send their own views and suggestions at:


US-China trade battles to impact India, world
The US has chosen to impose sanctions on China by crippling its trade via high tariffs (25 per cent) on imports from China levied on a progressively wider basket of products. From $36 billion of imports in March 2018, the base was enlarged to $50 billion in August and by end-September it will further increase to $250 billion (equal to 60 per cent of Chinese exports to the US) and so on, till the Chinese cave in and start seeking an end to the trade war.

Trump Pursues Trade Deals in Asia, Europe Amid Frostiness With China
The Trump administration is turning to allies in Asia and Europe (PayWall) for trade deals as U.S. relations with China deteriorate and the world’s two largest economies exchange tit-for-tat tariffs that risk damaging global commerce.
A Twist in the U.S. Tariff Battle: ‘It’s Helping China Be More Competitive’
There is an unintended consequence of the White House’s trade battle with China: Companies in the Pearl River Delta, the center of China’s manufacturing might, are accelerating toward making higher-quality products to compete against American goods.
Trump’s Trade Wars Are Starting to Backfire
Donald Trump’s approach to balancing his country’s trade deficit through high tariffs is akin to cutting off the nose to spite the face. It has ended up creating havoc, particularly for the American producers, workers and consumers. Alas, with the world being interconnected, the global economy is being adversely affected, unnecessarily. It’s not even a zero-sum game as some pundits may argue.
Suresh Prabhu proposes to double bilateral trade with Iran in next five years
Commerce and Industry Minister Suresh Prabhu proposed to double bilateral trade with Iran in the next five years from the current level of USD 13.8 billion, an official said. The official also said Prabhu's scheduled visit to Tehran on October 2 has been postponed for some reasons. He was to attend the ministerial meeting of the International North South Transport Corridor.


India is said to cut imports of Iranian oil to zero in November
India is not planning to buy any crude oil from Iran in November, raising the prospect that Tehran will lose another major customer as U.S. sanctions hit. Indian Oil Corp. and Bharat Petroleum Corp. haven’t asked for any Iranian cargoes for loading in November, according to officials at the companies. Nayara Energy also doesn’t plan any purchases, said an industry executive. Mangalore Refinery and Petrochemicals Ltd. hasn’t made any nominations for that month, but may do so later.
China and India lead the surge to solar energy
This year, emerging markets will overtake developed nations in terms of the amount of renewable wind and solar power they have installed, according to Moody’s, the credit rating agency. In the decade to 2016, the amount of solar power generated across the world has risen by 50 per cent, while wind has increased by 22 per cent, according to BP’s annual review of world energy.
Energy policy is skewed
One of the toughest challenges of public policymaking in an age of populism is that the opinions of the public are frequently based on false beliefs. These can often be refuted by readily available objective facts, but in many cases these are not presented or accepted. When it comes to energy, the truth should be established by science and engineering but policy has in recent years been distorted by two things: misconceptions by the public and heavy weighting by lobbyists for vested interests. The result is both suboptimal and expensive.
India engages with US to ensure energy security amid Iran sanctions
India is engaged with the United States and other stakeholders to ensure its energy security and national interest, as Washington is set to tighten sanctions on Iran's oil and banking sector. In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered renewal of US sanctions. Some sanctions took effect on Aug. 6, while those affecting the oil and banking sectors will start from Nov. 4.


Europe, China and Russia are making a special fund to get around US sanctions on Iran
Donald Trump’s determination to withdraw from the Iran deal is pushing American allies away from the US financial system. On the sidelines of the United Nations General Assembly, the European Union agreed with China and Russia to create a new financial institution to aid companies seeking to do business in Iran.
Does India endorse a US-led regional order?
Despite US President Donald Trump’s cold approach, the strategic partnership between India and the United States is deepening. The civil nuclear agreement signed in October 2008 marked a new beginning. And both the 2016 Logistics Exchange Memorandum of Agreement and the 2018 Communication, Compatibility, Security Agreement have strengthened the relationship further.
‘Make In India’ And ‘Make America Great Again’ Can Go Hand In Hand, Says Nisha Biswal Of USIBC
Prime Minister Narendra Modi’s ‘Make In India’ and U.S. President Donald Trump’s ‘Make America Great Again’ campaigns should be seen as complementary rather than as protectionist measures. That’s according to Nisha Biswal, president of the U.S.-India Business Council. The two campaigns not only provide for more jobs but also more investments into both countries.
Indo-US 2+2 Dialogue a Chance to Address Specifics in Context of Larger Geo-Political Goals
The first edition of the much-awaited 2+2 Dialogue on foreign and defence affairs between India and the US is finally going to take place on September 6 at New Delhi. For the two nations, this is a vital opportunity to strengthen their strategic and security ties but more importantly, it is an opportunity to exchange views on a range of bilateral, regional and global issues of mutual interest.


Implications of data mirroring
Data is the new oil and a driver of growth and change. Indeed, India is a supposed to become data rich before becoming economically rich. This digital growth is being pushed by large foreign digital companies. They are largely fuelled by the data of their users.
Gig-economy workers are the modern proletariat
Reports from the International Labour Organization and the JPMorgan Chase Institute describe the plight of different kinds of gig-economy workers who struggle to make even their countries’ minimum wage toiling for giant tech platforms.
Overcoming the China Challenge
In order to avoid further foreign pushback, China’s official media have recently been instructed to downplay the significance of “Made in China 2025,” the master plan announced by Chinese President Xi Jinping in 2015 with the goal of making China the “master of its own technologies.” Whether officially acknowledged or not, “2025” accurately reflects Xi’s ambitions to gain “self-sufficiency” in a host of advanced industries.
War for India dominance to spur more billion-dollar tech deals
India’s technology industry will see more billion-dollar acquisitions as the next big battleground for foreign Internet companies, according to boutique advisory firm Raine Group LLC. The e-commerce, financial technology and emerging media sectors will see strong deal activity, said Gaurav Mehta, the Mumbai-based country head at Raine, which advised on India’s two biggest tech deals this year.
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