US President Joe Biden and India’s Prime Minister Narendra Modi toast during a state dinner at the White House in Washington, DC on Thursday, June 22, 2023.
Bloomberg | Bloomberg | Getty Images
US-India relations opened a new chapter as Prime Minister Narendra Modi and President Joe Biden announced a series of technology and defense deals.
“When India and the US work together on semiconductors and critical minerals, it will help the world make supply chains more diverse, resilient and reliable,” Modi said during a speech before the joint session of the US Congress. “At the turn of the century we were still strangers in defense cooperation, but now the USA has become one of our most important defense partners.”
Former diplomats and analysts told CNBC they expect the relationship to grow even stronger and generate even more business.
These include other military deals, according to Atul Keshap, president of the US-India Business Council and former charge d’affaires at the US Embassy in New Delhi.
“It’s going to be great for democracy, great for both of our countries and frankly great for the Indo-Pacific and the world. So I’m very optimistic and actually quite impressed with the results that have been announced by both governments,” he told CNBC’s Squawk Box Asia on Friday.
US President Joe Biden receives Indian Prime Minister Narendra Modi from the Republic of India for an official state visit in Washington, DC
The Washington Post | The Washington Post | Getty Images
The two nations strengthened their defense partnership this week, securing deals that include building General Electric F414 engines in India and repairing US Navy-based ships at Indian shipyards.
Still, the US and India are not allies, and their relationship will be very different from other countries in the region’s relationship with Washington.
“The Biden administration has placed great emphasis on strategic and economic ties. And that doesn’t depend on India backing the United States across the board. It’s not an ally relationship, but it’s a relationship of equal partners and equal strategic interests,” said Raymond Vickery, senior fellow on US-India policy studies at the Center for Strategic and International Studies.
More tech deals in sight
The US and India are also expected to strike more technology deals in the future as Washington pursues “friendshoring” – a strategy in which it moves away from China and unlocks the potential of other countries in the region.
“India needs cutting-edge technology. And I think Americans have become much more open about sharing these crucial technologies and moving in a direction that also helps India build its own defense manufacturing base,” said Harsh V. Pant, vice president for Foreign Policy Studies and Defense at the Observer Research Foundation, a Delhi-based think tank.
The US and India agreed to work together on space and artificial intelligence, while working together to secure resilient supply chains for critical minerals.
“These will inevitably lead to more deals.” [as] the habit of partnership and trust in the relationship continues to grow,” said Arun Singh, non-resident senior fellow at Carnegie India.
“The US understands that the human tech capital is a very important part of US global innovation leadership,” said Singh, who was previously India’s ambassador to the United States.
“Indian-born tech entrepreneurs and Indian-born CEOs have been an integral part of US innovation leadership,” he said, adding that Modi’s state visit further solidified US investment in India’s critical technology areas.
Don’t expect a free trade agreement soon
The joint statement said Modi had “expressed India’s interest in being recognized by the United States as a designated country under the Trade Agreement Act in order to further enhance the integration of both economies and further enhance trade and investment between two countries.” to promote.”
Despite the more friendly relationship, Pant from ORF said that a free trade agreement was unlikely in the short to medium term.
“Comments from both sides of the political camp show that there is no real will to move forward on free trade deals… That seems to be the bottleneck at the moment,” he said.
Similarly, former Ambassador Singh said, “The US is also reluctant to enter into such deals until it has improved its infrastructure and made American workers more competitive.”
Nonetheless, the US and India have shown a willingness to improve trade relations. Both parties agreed to settle six outstanding disputes at the World Trade Organization.
— CNBC’s Naman Tandon contributed to this report.
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