战略与国际研究中心-What-2015-May-Hold-for-US_2页_349kb

2015 U.S.-India Relations Summary

Core Content

2015 is positioned as a pivotal year for the U.S.-India relationship, with the potential for significant transformation following the BJP's electoral victory in April-May 2014. The year is marked by a series of high-level engagements, including the Strategic Dialogue in July and Prime Minister Narendra Modi's visit to the U.S. in September, which set the stage for renewed cooperation. The goal is to translate these diplomatic efforts into tangible outcomes across various sectors, while also addressing challenges that could strain the relationship.

Main Issues for Cooperation

1. Economic Reform and Renewed Economic Dynamism

• The Modi government has already initiated reforms such as lifting FDI caps and implementing non-legislative changes.
• The next step involves advancing the Goods & Services Tax (GST) and further opening sectors like insurance and e-commerce to foreign investment.
• Resolving the backlog of cross-border tax issues, particularly those related to transfer pricing and the misuse of tax treaties, is crucial for enhancing economic ties.

2. Securing an Expanded Defense Framework Agreement

• The 10-year "New Framework for the U.S.-India Defense Relationship" is set to expire in late June 2015.
• Renewing this framework is essential to modernize and strengthen the security relationship.
• A renewed agreement could include a vision for the future of U.S.-India defense cooperation over the next decade.

3. Fixing the Nuclear Liability Issue

• The lack of commercial nuclear trade remains a key challenge in the strategic relationship.
• A Contact Group was established in September 2014 to address this issue and operationalize civilian nuclear trade.
• Success in this area could add a new dimension to cooperation, bridging economic and strategic interests.

4. Regional Cooperation

• The U.S. and India have expressed interest in new areas of collaboration, such as denuclearizing North Korea, promoting stability in the South China Sea, and sharing information on conflict zones like Syria and Iraq.
• Identifying concrete actions to implement these commitments is necessary to demonstrate genuine partnership.

Threats to the Relationship

1. U.S. Military Assistance to Pakistan

• Despite its controversial nature in the U.S., continued military aid to Pakistan is seen as a threat to U.S.-India strategic trust.
• Support for Pakistan's counter-terrorism efforts, such as in North Waziristan, is perceived as undermining India's security interests.
• This issue has gained more attention in India in recent months, potentially leading to a new phase of "drift" if not managed carefully.

2. Anti-Trade/Anti-Business Measures

• Multilateral trade disputes, such as India's withdrawal from the WTO's Trade Facilitation Agreement, have strained economic relations.
• Other commercial issues, including the Uber ban, have raised concerns among investors.
• These actions could hinder the economic relationship and reduce U.S. investment in India.

Issues with Potential for Breakage

1. Coordination on Afghanistan

• As the U.S. reduces its military presence in Afghanistan, coordination with India becomes more important.
• A reinvigorated trilateral dialogue and proactive consultation with India are necessary to align interests and avoid missteps in Afghanistan policy.

2. U.S. Infrastructure Investment in India

• The U.S. lacks the capacity for large-scale infrastructure investments compared to other countries like Japan and China.
• Encouraging U.S. private-sector involvement in India's infrastructure development is key.
• Implementing mechanisms such as a Bilateral Investment Treaty (BIT) and improving transparency and efficiency in bidding processes will help attract investment.

Supporting Documents and Resources

• Recent CSIS India Reports:

  • The Narendra Modi Government: Putting the "New" in Delhi by Richard Rossow
  • The BJP's Hot Streak Continues by Richard Rossow and Samir Nair
  • India's Nuclear Doctrine: Need for a Review by Gurmeet Kanwal
  • How LNG Trade May Boost the U.S.-India Energy Relationship by Robert Poulson-Houser
  • India-Myanmar Relations: Need for a Multi-Sector Approach by Sanjay Pulpaka
  • The Long View on India by Richard Rossow

• SouthAsiaJobs:

  • NRDC seeks an International Advocate for climate change in India and China (DC-based, Masters or Law degree required).
  • Johns Hopkins School of Public Health is looking for an Advocacy and Communications Manager focusing on India and Pakistan (Baltimore-based, Masters required, 5 years of experience).
  • NDI is hiring a Senior Program Assistant for Asia/Pakistan (DC-based, 2 years of experience).

Key Data Highlights

• U.S.-India goods trade increased by +2.9% (12-month rolling average, per U.S. Census).
• FDI increased by +29.7% (12-month rolling average, per DIPP).
• FII (Foreign Institutional Investment) saw a +245.7% increase (12-month rolling average, per NSDL).

These data points reflect the growing economic engagement between the U.S. and India, underscoring the need for continued collaboration and policy alignment.