India - US: Testy Relations


India - US: Testy Relations

The US is one of the few countries with which India enjoys a trade surplus. But its  India’s trade deficit with China is twice as large as its trade surplus with the United States.

Now,  the US has been pushing arms sales to India.  In 2015, the US accounted for nine per cent of India’s defence imports while Russia accounted for 63 per cent. By 2019, Russia’s share was down to 35 per cent, while America’s share was up to 24 per cent. The US has been demanding that something more needs to be done to reduce the trade surplus India enjoys.

India-US relations, writs Sanjaya Baru (political commentator and policy analyst) “have been a bit testy since the Russian invasion of Ukraine and India’s neutrality on that score. The fact that there has been no US ambassador as yet posted to New Delhi during President Joe Biden’s term has not helped.”


Air India’s aircraft deal positive

Air India’s decision to buy 220 Boeing aircraft, along with 250 Airbus aircraft from a friendlier France, is a positive development though.  “It also provides some relief to the ruling establishment in New Delhi from all the talking down that it has been getting for its foreign policy choices, in the aftermath of Russia’s Ukraine invasion, and its human rights record.”


India deploying economic incentives in his foreign policy

Prime Minister Modi, states Baru “deserves full marks for the manner in which he has deployed economic incentives in his foreign policy, especially in the run-up to hosting the Group of Twenty summit in India later this year. The continuing defence purchases from Russia, agreeing to buy aircraft from the US and France, continuing to run up a huge trade deficit with China, while seeking free trade deals with the European Union and United Kingdom. and so on.

“What remains to be seen is whether India can sustain this strategy of deploying economic engagement as an instrument of foreign policy if the economy does not grow at a faster pace and the Narendra Modi government does not further liberalise its trade policy. It also remains to be seen if dangling business deals in front of American politicians will help encourage them to go quiet on questions of human rights and religious freedom. It did in the past, and China made the best use of it…..”

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