U.S. President Joe Biden, Indian Prime Minister Narendra Modi toasts on the official dinner on the White House in Washington, D.C., Thursday, June 22, 2023.
Bloomberg | Bloomberg | Getty’s paintings
US-India relations entered a new chapter as Prime Minister Narendra Modi and President Joe Biden announced plenty of technology and defense deals.
“When India and the US work together on semiconductors and critical minerals, it helps the world to make supply chains more diverse, resilient and reliable,” Modi said during a speech to a joint session of the US Congress. “We were strangers to defense cooperation on the turn of the century, but now the USA has turn out to be one in all our most vital defense partners.”
Former diplomats and analysts told CNBC that they only expect the connection to strengthen and generate even more deals.
This includes more military deals, in keeping with Atul Keshap, chairman of the US-India Business Council and former chargé d’affaires on the US embassy in New Delhi.
“It may be great for democracy, great for our two countries, and truthfully, great for the Indo-Pacific and the world. So I’m very optimistic and really impressed with the outcomes which have been announced by each governments,” he told CNBC’s Squawk Box Asia on Friday.
US President Joe Biden receives Indian Prime Minister Narendra Modi of the Republic of India on an official state visit to Washington.
Washington Post | Washington Post | Getty’s paintings
This week, the 2 nations strengthened their defense partnership, striking offers which include constructing General Electric F414 jet engines in India and repairing US Navy ships deployed in Indian shipyards.
Despite this, the USA and India should not allies, and their relationship might be very different from that of other countries within the region with Washington.
“The Biden administration has bet on strategic and economic relations. And that isn’t depending on India supporting the USA. said Raymond Vickery, senior associate of U.S.-Indian policy studies on the Center for Strategic and International Studies.
More tech deals on the horizon
The US and India are also expected to conclude more technology deals in the long run as Washington pursues friend-shoring, a technique that diversifies away from China and taps into the potential of other countries within the region.
“India needs cutting-edge technology. I feel Americans have turn out to be much more open to sharing these critical technologies and moving in a direction that may also help India construct its own defense manufacturing base,” said Harsh V. Pant, vice chairman of research and foreign policy on the Observer Research Foundation. , a think tank based in Delhi.
The United States and India have agreed to work together in space and artificial intelligence while working together to secure resilient critical mineral supply chains.
“This may actually result in more deals [as] the habit of partnership and trust in relationships continues to grow,” said Arun Singh, a non-resident senior fellow at Carnegie India.
“The US understands that technological human capital is a vital a part of US global innovation leadership,” said Singh, who previously served as India’s ambassador to the US.
“Indian tech entrepreneurs and Indian CEOs have been an integral a part of America’s innovation leadership,” he said, adding that Modi’s state visit further strengthened U.S. investment in India’s technology-critical areas.
Don’t expect a free trade deal soon
The joint statement noted that Modi “expressed India’s interest in US recognition of a rustic designated by the Trade Agreements Act to further strengthen the combination of the 2 economies and further promote trade and investment between the 2 countries.”
Despite a more cozy relationship, ORF’s Pant said a free trade deal was unlikely within the short to medium term.
“Comments from each side of the political corridor show that there is no such thing as a real will to maneuver forward on FTAs… This appears to be a bottleneck in the intervening time,” he said.
Similarly, former ambassador Singh said that “the USA can also be reluctant to enter into such agreements until it improves its infrastructure and makes the American employee more competitive.”
Despite this, the USA and India have shown a willingness to enhance trade relations. Either side agreed to finish six unresolved disputes within the World Trade Organization.
— Naman Tandon of CNBC contributed to this report.