Report

“Howdy Modi”: a diplomatic tour de force superimposed on US-India bilateral Issues

Publisher
International relations International trade U.S foreign policy Defence India United States of America
Description

US and Indian national and strategic interests play out across a range of issues and areas of potential engagement. The anticipated resolution of their tariff war did not occur during the events of Howdy Modi week despite the leaders’ personal rapport. Background issues linked with “America First” and “Make in India” are also considered in this paper. They include the value to the US of India as a consumer market, India’s corporate tax cuts to promote “Make in India” production, and the low-wage cost advantage to American firms operating there. Curbs on the H-1B visa remain an uncertainty for Indian high-skilled IT workers.

Economic disparities may also have an effect on the two countries’ broad strategic interests. India’s strategic autonomy has extended but not fully replaced its non-alignment policy. Its flexibility has allowed India to be a signatory to The Logistics Exchange Memorandum of Agreement (LEMOA) in 2016 and the Communications Compatibility and Security Agreement (COMCASA) in September 2018, while the Basic Exchange and Cooperation Agreement (BECA) awaits India’s signature. It is seen by the US as crucial to counterbalancing its concerns about a Russia-China-Pakistan axis but ignores India’s bilateral economic and trade relations with Russia and China. Also in play is India’s ongoing development engagement with Iran, permitted with a continuing US waiver.

Key points:

  • Modi’s “rapturous welcome” at Madison Square Garden in 2014 was repeated at the Howdy Modi festival in Houston, where his rapport with Trump was on display.
  • “Make in India” and “America First” were evident at the leaders’ unresolved tariff equity discussions.
  • The cost advantage for US firms to operate in low-waged India and questions around H-1B visas are background issues.
  • New collaborations are crucial to Indo-US strategic interoperability.
  • The US-proposed tri-service exercise aims to consolidate US-India defence ties.
Publication Details
Publication Year:
2019