But the state of commentary masks a number of important realities in the India–US relationship. One is the generally positive views of the United States in India. Only 9 per cent of Indians had an unfavourable view of the United States in a 2017 survey, the lowest among the 37 countries polled. A 2018 survey indicated that 75 per cent of India’s strategic community believed the United States to be India’s most important partner on global issues.
Although relations appear to be getting more transactional in the ‘America First’ and ‘India First’ era, the primary structural impediments to an India–US strategic partnership have eroded over the past two decades. Most notable is the removal of US sanctions on India after 2005 for its nuclear weapons program. The United States has become the second largest defence equipment provider to India by value after Russia and has supported India’s membership in major international organisations.
The trade relationship, which has grown from US$64 billion to US$88 billion over the past five years, underestimates the interconnectedness of the two economies. Nearly 2000 US-based multinational companies now operate in India, many conducting important research and development. US-based multinationals are major job creators in India. Indian investment in the United States has risen almost ten-fold over the past decade. For US tech giants such as Facebook and Amazon, India often represents their largest or fastest-growing user base.
Furthermore, in contrast to US relations with adversaries such as China and Russia or allies and neighbours such as Germany and Mexico, US ties with India have remained on an upward trajectory despite the transition from the Obama to the Trump administration. Cooperation on counterterrorism, maritime security in the Indian Ocean, infrastructure coordination, defence technology and energy has deepened. There are also hints of some convergence on future telecommunications technology.
Both countries have become more vocal in their support for freedom of navigation, including in the South China Sea. They both have concerns about China’s Belt and Road Initiative and share similar views about the normative basis of a free, open and inclusive Indo-Pacific as an underpinning for regional order. Given China’s continuing assertiveness and rising concerns about the arc of instability stretching from Pakistan to Yemen, the strategic logic of the relationship is being propelled forward.
However, the strategic elements of the relationship are not always on the same plane as bilateral relations. There are four big challenges that confront the relationship today. These topped the agenda during both Pompeo’s and Trump’s meeting with Modi.
The most important concerns differences over trade, many of which predate Trump’s election. Since his election, Trump has repeatedly called out India for its high tariffs and trade surplus. Changes to India’s data localisation norms and a draft e-commerce policy provoked a major response from Washington. The United States moved to suspend tariff-free exports from India under the Generalised System of Preferences scheme. India duly retaliated. While this tit-for-tat has only affected a small proportion of India–US trade, spiralling trade difficulties risk the future of the broader relationship. Efforts will be required to stem that tide.
The second challenge concerns Russia. Russia is the largest supplier of Indian military hardware despite considerable diversification. Russia provides India with critical spares and maintenance for existing platforms and certain technologies — such as nuclear-powered submarines — that others do not. New Delhi also sees the partnership with Moscow as critical for engagement with Central Asia and for balance in the Indo-Pacific, putting it at odds with Washington.
A recent deal to acquire Russia’s S-400 anti-aircraft system made India eligible for US sanctions intended to punish Russia. The US Congress has created room for a presidential waiver for India but it is by no means guaranteed. The longer-term issue of India–Russia military-technological relations will remain. It is compounded by the increasingly incompatible security implications of US and Russian military technologies operating in tandem.
The third challenge relates to renewed US hostility towards Iran following Washington’s unilateral withdrawal from the Joint Comprehensive Plan of Action. The resumption of US sanctions on Iran has had consequences for oil prices, Indian energy companies and Indian investments — especially in the strategically important Iranian port of Chabahar. Oil market stabilisation, high secondary costs, Indian energy diversification, shifting political alignments and US carve-outs for India have already helped address most of these challenges.
Finally, cracks are likely to emerge in the US and Indian approaches to Afghanistan. Both New Delhi and Washington agree on the broad objective of a stable and democratic Afghan government in Kabul. Both have engaged in considerable state-building efforts there. But New Delhi remains concerned about possible concessions that Washington might make in an effort to finalise a peace agreement with Taliban negotiators.
None of these challenges have come to a head yet. The first two are fundamental in that they predate and are likely to survive Trump. On each set of issues, plausible solutions are within the realm of possibility. But amid a broader strategic convergence, both countries will have to navigate their differences if relations are to continue on a positive track.
Dhruva Jaishankar is a Fellow in Foreign Policy Studies at Brookings India and Non-Resident Fellow of the Lowy Institute.