The Indo-US Strategic Dialogue 2012: Areas of Focus
June 12, 2012
Background
The India-US Strategic Dialogue, a Cabinet-level interaction, was instituted in July 2009 during the first visit of the US Secretary of State Hillary Clinton to India in her then new role. The Dialogue aims to take stock of the progress made in the Indo-US strategic partnership and identify new areas for collaboration. It also acts as the principal mechanism for advancing bilateral cooperation across the full spectrum of the relationship between India and the US, providing an opportunity to exchange views on global and regional issues of mutual interest.
It has identified a few key pillars for expanding cooperation, outlining extensive bilateral initiatives in each of these areas: (1) advancing global security and countering terrorism; (2) disarmament and nonproliferation; (3) trade and economic relations; (4) high technology; (5) energy security, clean energy, and climate change; (6) agriculture; (7) education; (8) health; (9) science and technology; and (10) development. Ttwo meetings of the Strategic Dialogue have been held — the first in June 2010 in Washington DC and the second in July 2011 in New Delhi. The third round is scheduled to take place in Washington DC on June 13, 2012, to be co-chaired by the US Secretary of State Hillary Clinton and the Indian Foreign Minister SM Krishna.
Between the July 2009 visit of Secretary Clinton and her recent visit to India last month, there have been several high-level visits including that of Indian Prime Minister Dr. Manmohan Singh, who became the first State Guest of the Obama Administration in November 2009, as well as the visit of US President Barack Obama to India in November 2010. Both the US Defence Secretary Leon Panetta and the US Treasury Secretary Timothy Geithner are visiting India this month as well.
Round III: June 2012
The Indian delegation to the US later this month will include four Cabinet Ministers – SM Krishna (Foreign Affairs), Kapil Sibal (HRD), Vilasrao Deshmukh (S&T) and Ghulam Nabi Azad (Health), as well as two Cabinet-level officials – Sam Pitroda, Advisor to the Prime Minister on Public Information Infrastructure & Innovations and Chairman of the National Innovation Council and Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission of India, along with key business leaders from India.
Focus areas of the Strategic Dialogue include:
Defence
The two countries had decided at the conclusion of last year’s Dialogue to cooperate on technology transfer, research, development and production of defense items. The US is now the third-largest supplier of defense equipment for India, even though US companies lost out to Dassault Rafale on the recent contract to supply India with 126 medium multi-role combat aircraft (MMRCA) worth nearly $12 billion. Last year India dropped Lockheed’s F-16 from the bidding. Now it is at the late stage of talks to buy more than a dozen Boeing Apache helicopters worth about $1.4 billion and, last month, cleared the purchase of 145 M777 Howitzer artillery guns. Since 2005, India has placed orders for procurement of defense equipment of more than US$ 8 billion, and Lockheed Martin, Sikorsky and India’s Tata Group are already jointly manufacturing spare parts for transport aircraft. But the US’s refusal to allow India’s Defence Research and Development Organisation (DRDO) the purchase of dual-use items continues to be a sticking point.
Counter-terrorism, intelligence-sharing & security
Counter-terrorism cooperation may include a number of measures, such as intelligence sharing, information exchange, operational cooperation, and access to advanced counterterrorism technology and equipment, with a focus on cyber security. Last year, the Computer Emergency Response Teams (CERT-IN and US-CERT) of both the countries signed an MoU to exchange information on cyber attacks and mutual response to cyber security incidents; to cooperate and exchanging information on cyber security technology, policy and best practices, capacity building and exchange of expertise. There are also a number of exchanges between city and high-level federal officials alike, which focus on ports, border and transportation security, illicit finance and cyber crime issues.
The two also have an Annual Joint Counterterrorism Working Group, which has had 13 meetings so far, but the US relationship with Pakistan as well as Indian perceptions of the US withholding intelligence on Islamic militants in the Indian state of J&K has been a source of distrust on the Indian side. A recent move by the US has been to place a $10 million bounty on the head of Hafiz Saeed, head of the Jamaat-ud-Dawa and its sister organisation, the Lashkar-e-Taiba, and the suspected mastermind of the 26/11 Mumbai terror attacks, who is currently in Pakistan.
Science & Technology
US and India have begun to focus on high technology partnerships and trade opportunities and are expected to continue discussions on trade in this sector. With the removal of restrictions in recent years, the US now allows the export of high-technology defence items to India. For example, India is specifically likely to ask the US for technological assistance to curb the circulation of fake currency & to build its own database of such notes, inspired by the kind that exists in the US. The India-US S&T Endowment Board, established by Secretary Clinton and Minister Krishna in 2009 is also working to award nearly $3 million annually to entrepreneurial projects that commercialize technologies to improve health and empower citizens.
Nuclear security and export controls
Following the civil nuclear agreement, the US has extended its support to India’s membership in multilateral export control regimes. India is still waiting for membership of the Nuclear Suppliers Group (NSG) and three other non-proliferation organisations. It had earlier sought a “package approach,” meaning simultaneous entry into all the four, but has dropped the demand for a phased approach in which the entry into the NSG is of prime importance.
Infrastructure
India needs $143 billion investments in health care, $392 billion in transportation infrastructure and $1.25 trillion in energy production by 2030. India is planning to raise $1 trillion in infrastructure financing by 2017, half of it from the private sector. The US-India Strategic Dialogue is likely to focus on targeted inter-governmental partnerships in mega infrastructure projects, as one of the models for going forward and to leverage opportunities in sectors like road building, railways, aviation and energy. US officials will also be looking for ways to ensure more American companies are considered for these very large infrastructure projects.
Education
The focus of the education cooperation discussion is likely to focus on two key areas: advanced research and innovation and workforce development, especially with respect to the setting up of community colleges. Bilateral education initiatives like the India-US S&T Forum, S&T Endowment Fund, the Joint Clean Energy Research Center, the Singh-Obama Knowledge Initiative and the Nehru-Fulbright Program are already in place. The first-ever Higher Education Dialogue would also be held on the margins of the Strategic Dialogue, following up on last year’s Higher Education Summit.
The first eight partnership projects that are being funded jointly by the two countries through the Obama-Singh 21st Century Knowledge Initiative are also to be announced. The three-year, nearly quarter-of-a-million-dollar grants would be used for joint projects between American and Indian universities in the areas of food security, energy, climate change and public health, among others.
Trade
There has been a four-fold increase in trade since 2005 and this year it is expected to reach $100 billion (USD). India exported $36 billion worth of goods to the US in 2011, while exports from the U.S. to India quadrupled over the decade to $21 billion in 2011, from less than $4 billion in 2001. In the past decade, about 7 percent of all cumulative FDI inflows into India have been from the US. India is the 13th largest trading partner of the United States and its 17th largest merchandise export market.
While software, automobile and healthcare sectors are thriving in India, the emerging opportunities are in the areas of nano-technology, biotechnology and homeland security. Indian businesses have invested in wide ranging fields in the US including in IT products and services; manufacturing; distribution and packaging and educational tie-ups. To further boost investments India and US have resumed negotiations on a Bilateral Investment Treaty (BIT) and have expanded opportunities for economic cooperation through measures like the Infrastructure Debt Fund and tariff reductions on products with potential for bilateral trade.
Renewable energy & energy efficiency
Trade in clean-technology products had become one of the largest components of the US-India trade. With a focus on clean and sustainable sources of energy, the two countries have established a Joint Clean Energy Research and Development Centre (JCERDC) to accelerate the transition to high performing, low emissions, and energy secure economies. In April 2012, the first awards were announced under this initiative for three consortia, led by Indian and US institutions for taking up collaborative research in the fields of advanced biofuels, energy efficiency in buildings and solar energy. These will bring together experts from national laboratories, universities, and industry in both India and the US to leverage their expertise and resources to tap the potential of clean energy technologies that can reduce energy use and dependence on fossil fuels, and accelerate the deployment of renewable energy sources.
The U.S. Trade Development Agency (USTDA) supported bilateral Energy Cooperation Program was also announced in November 2010, which works with Indian and U.S. businesses on deployment of clean energy technology in India.
Health
The focus areas include public health, infant mortality and survival issues, chronic disease and health systems. Following the June 13 talks, on June 14 and 15, the US Secretary of State Hillary Clinton would co-chair the unique multilateral summit on “Child Survival” with the Indian Health Minister Ghulam Nabi Azad that would address issues like child mortality, nutrition and related matters.
Agriculture & Food security
In December 2011, the US and India signed a Memorandum of Understanding (MoU) on Strategic Cooperation in Agriculture and Food Security. However, since FDI in core agriculture sector is not permitted, total inflows in the sector have been minimal. As part of their global concerns, the two sides had agreed at last year’s Dialogue to promote food security in Africa by providing assistance to African countries in the area of agriculture, through a triangular cooperation program with Liberia, Malawi and Kenya.
IT
According to the Indian software industry association, NASSCOM, Indian industry employs over 100,000 people in the US, up from 20,000 six years ago. It also supports 200,000 other jobs including indirect ones, with many Indian companies setting up development centers in the US. The Indian IT industry contributed $15 billion in taxes in the US over the last five years. Here, the focus is likely to be on the US’s restrictive visa policy, especially for software professionals.
Open Government
To foster greater transparency in governance, India and the US have launched an Open Government Platform, leveraging the best features of India’s India.gov.in and the US’s Data.gov portals. Leveraging the technological strengths and institutional expertise of both India and the United States, the open source platform is intended to provide citizens access to government information via a user-friendly website and a package of e-governance applications to enhance public service delivery. The Platform will include documentation to help governments create their own national data sharing policies, including internal approval systems.
Innovation and entrepreneurship
US Agency for International Development (USAID) is closely engaged with Indian non-governmental organisations to promote innovation, entrepreneurship, and sustainable development. The focus on this year’s talks is also on women entrepreneurs.