U.S.-India Insight: Eight Ways to Strengthen U.S.-India Cooperation in 2017

January 12, 2017

1. Be more responsive to India’s agenda: In the short term, the United States will give more than it will receive in most areas of engagement. To the United States, cooperation with India is a bet on the future, both in terms of India’s expected economic and security role. With that in mind, we should ensure new programs and ideas are conceived based, at least partly, as a response to major Indian programs. The Modi government has a number of high-profile initiatives, such as “Make in India,” “Digital India,” “Smart Cities,” “Clean India,” and “Start-up India.” These initiatives are quite broad, and we can find meaningful ways to engage with each that simultaneously meets U.S. interests. On the other hand, presenting ideas to the government of India that are unattached to India’s major initiatives has sometimes created difficulties in achieving real momentum. This should not be a surprise given the limited capacity of an administration that has already committed its civil service to an ambitious development agenda. To facilitate existing initiatives and ensure smooth coordination, the United States should ensure that key U.S. government positions based in India are filled quickly.
2. Build out a “long game” on trade: The United States has been unable to press India into taking a more proactive position on global trade matters. A range of obstacles lie in the way of a more proactive Indian stance on trade, not least of which is India’s large goods trade deficit—averaging 8 percent of GDP over the last five years. The United States should develop a long-term plan on trade engagement that will pair U.S. cooperation with incremental steps on the way to trade integration. In some ways, the U.S. “reset” initiated on defense trade after losing the Medium Multi-Role Combat Aircraft bid in 2011 is a model; it resulted in programs like the Defense Technology and Trade Initiative (DTTI) and has helped lead to growth in U.S. defense exports to India.
3. Engage more with the Finance Ministry: Many U.S. commercial policy issues lie within the Ministry of Finance’s domain. Yet our formal dialogues on trade and commercial matters have relatively little direct connectivity with the Finance Ministry, apart from the U.S.-India Financial & Economic Partnership (co-led by the U.S. Department of the Treasury).
4. Engage Indian state leaders: In the last 24 months, we saw an uptick in the number of U.S. programs that seek to engage India’s powerful state leaders. This effort should be deepened and widened. Ultimately, the power to achieve India’s development goals lies with India’s powerful state leaders more than with the central government. Building stronger relationships with regional parties that control many Indian states will also act as an important buffer if there is ever a downturn in relations between Delhi and Washington.
5. Expand our homeland security cooperation: The United States and India have had a “Homeland Security Dialogue” since 2011, though the governments have not been able to meet on a consistent basis at the ministerial level. India and the United States share an enormous range of concerns in this area, from aviation security to Coast Guard development, and there is wide latitude for dialogue. Prior experience shows, however, that initiatives will succeed only if they are pushed through high-level engagement. A major terrorist attack on Indian soil coordinated from Pakistan, resulting in a significant Indian military response, is also one of the more likely factors to derail India’s rise as an economic and security partner of the United States. Helping India strengthen itself against such attacks is strongly in the U.S. interest.
6. Discuss tax policy concerns regularly: Tax disputes make up a sizeable portion of U.S. commercial disputes. Apart from the formal “Mutual Agreement Procedure” negotiations, it is great that the “Financial & Economic Partnership” between the Treasury Department and the Ministry of Finance has started to include tax issues.
7. Bring a top-notch delegation to the Global Entrepreneurship Summit: India has agreed to host this important annual summit in 2017. Founded by the United States, we should make the summit a core highlight of our global partnership in 2017, with a powerful U.S. delegation composed of public and private leaders.
8. Engage opposition leaders: While the Congress Party is down, it is not out. The United States should make sure it continues to engage regularly with the party’s leadership so we can maintain good momentum in our relationship if the politics turn. For instance, Congress still controls six states and has the second-most seats in 13 other state legislatures, highlighting the fact that the party remains the most viable alternative should the Bharatiya Janata Party (BJP) falter.