Biden presidency will not rock the boat of India-US ties

The next US administration may make a few noises about Kashmir and human rights but the convergence of geo-strategic interests between India and the US and strong bipartisan support for a closer diplomatic engagement will ensure that the relationship continues to gather strength.

Indian Prime Minister Narendra Modi was among the first world leaders to congratulate Democratic candidate and

now President-elect Joe Biden on winning the US Presidential election. This wasn't only optics. The Indian government, which had invested quite heavily in the Trump administration, is not too worried about the direction of Indo-US ties under a Biden presidency.

“There is broad bipartisan support in the US for closer strategic and economic ties with India, which are based on shared interests, not personal ideologies. So, we don't expect a Biden administration to make any wholesale changes to policies impacting India,” said a senior official in the government of India on condition of anonymity.

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The Indian government, therefore, expects India-US ties, which many experts have dubbed “the defining partnership of the 21^st century” to continue to grow. Experts feel the overall positive direction of the relationship will endure even though many of the nuances may see subtle and not-so-subtle changes. 'India Global Business' looks at how close (or strained) relations with the US could impact India on 10 issues that are critical for its economic growth and strategic independence.

1. Mixed bag on China

The Trump administration has wholeheartedly supported India in its border stand-off with China. A new Biden

administration, though supportive of India, may not back India as volubly. But this won't mean the US turning its back on New Delhi. Secretary of State Mike Pompeo's open calling out of China could be replaced with more traditional closed-door diplomacy. The US will continue to supply India with real time intelligence and intercepts, as it is bound by treaties to do, and will remain invested in pursuing efforts to help India face up to China at the negotiating table. Answering a question on whether he would continue the Trump administration's punitive measures against rising Chinese belligerence around the world, Biden said: “It's not so much about punishing China. It's about making sure that China understands it will have to play by the rules.”

Earlier, addressing the Hudson Institute, the US President-elects pick for Secretary of State had said he would work towards rallying allies to push back against Chinese bad behaviour and expansionism. But he has also said in the past that “trying to fully decouple, as some have suggested, from China...is unrealistic and ultimately counter-productive. It would be a mistake. Instead, it would be more worthwhile to expand alliances with partners in the region (like India).” Make what you will of these statements, but the Indian establishment will be keeping a hawk eye on the Biden government's China policy. In more concrete good news for India, the new US government is unlikely to ease trade curbs on China as this directly impacts jobs in America and its global competitiveness. This means the exodus of US (and other) companies from China will continue, with collateral benefits for India (and other competing nations).

2. Strategic tango to continue in the Indo-Pacific

When Prime Minister Modi sat down for a one-on-one chat with visiting US President Barrack Obama in 2015, China took up a lion's share of the discussion.

Remember: Biden was Obama's deputy. So, the foreign policy matrix under his watch will not differ much from what it was under his old boss. China has made little secret of its ambitions of replacing the US as the supreme power in the Indo Pacific. India, which has signed four foundational agreements with the Washington on military cooperation, is a major US ally in the region. And the Quad, the putative alliance of democracies in Asia, will continue to play a major, if informal, role in checking Beijing's Asian hegemony. The Quad comprises India, the US, Japan and Australia. m the quagmire it has fallen into in Afghanistan.

3. Biden likely to be tough of Pakistan and terrorism

The Trump administration has gone further than any previous US government in calling out and punishing Pakistan for using terrorism as a covert component of its state policy. But like Trump, Biden will need Pakistan's support to extricate the US from the quagmire it has fallen into in Afghanistan. It must, at the same time, be borne in mind that it was the Obama administration that had pushed Pakistan into the Financial Action Task Force (FATF) grey list for its loose regulations on money laundering and its

role in facilitating financial transfers between globally designated terror groups. The US will, in all likelihood, continue to be tough with Pakistan on terrorism. This will be to India's advantage. Then, Indian policy makers also expect a return of the Obama-era Af-Pak terminology and a continuation of the transactional relationship between Washington and Islamabad. They are hoping that the new Biden administration will, like Trump and Obama in his second term, view India through the China lens rather than in conjunction with Pakistan.

4. Bilateral: trade: Conditions apply

India's simmering trade tensions are expected to be sorted out. The limited trade deal that has reportedly been hammered out with the Trump administration is expected to go through even under Biden's watch, with some alterations that will improve the optics for the new administration. But Biden will find it difficult to completely overturn Trump's turn towards protectionism as it has generated significant political support in the US. Though India's trade surplus with the US has come down from its peak of $24 billion in 2015, it was still relatively high at $16.85 billion in 2019. This figure is like a red rag to many US decision makers and will remain a key barrier to easier entry for Indian goods and services into the US. However, given Biden's more international approach to policy making, Indian analysts expect an early restoration of benefits under the Generalised System of Preferences (GSP) under which India used to export about $6 billion worth of goods to the US at zero or very low duties.

5. Visa regime likely to become more liberal

Roadblocks in the path of professionals immigrants from India - and the suspension of H1B visas, that US and Indian technology companies mainly use - is another pain point that Biden will have to resolve expeditiously for the two countries to fully realise the potential of their bilateral relationship. Biden has promised a liberal approach to issuing visas and has committed to reversing the current administration's hard-line policies on the issue. But this is a touchy and sensitive subject in the US, which has suffered unprecedented job losses in the wake of the Covid-19 pandemic. The Indian government as well as Indian and US IT and other knowledge sector companies as well as millions of knowledge workers will wait eagerly to see how the new Biden administration follows up on its promises on this score.

6. Broad convergence on climate change expected

A Biden administration will return to the Paris Climate Accord, from which Trump had walked out, on its first day in office, the President-elect has promised. This is expected to be a positive for India, which is the only country that is on course to meet the targets it had committed to under the 2015 Paris Climate Pact. An article by Aashna Mehra, Investment Associate at the US-based New Energy Capital Partners, in Financial Express, a leading Indian financial daily, says: “As climate change takes centre stage in the U.S.-India relationship, the nature of the Strategic Energy Partnership between the two countries will come into increasing focus. The American administration, looking to return to the helm of climate change leadership with renewed vigour under President-elect Biden can push for faster decarbonisation and a more renewables-focused energy transition for India. The greatest assets in America's toolkit are financial and knowledge transfers.” Greater knowledge transfers from the US will help India reduce its dependence on fossil fuels without sacrificing its developmental goals.

7. Renewed US engagement with Iran will ease India's problems

The threat of US sanctions forced India to look at alternatives to Iranian oil, which is among the cheapest. If the Biden government returns to the N-deal with Iran, from which the US had unilaterally walked out of under Trump, then, India can expect to resume oil imports from the Islamic republic, without the Damocles' Sword of US sanctions hanging over its head.

It may be recalled that the pact with Iran was one of the foreign policy highlights of the Obama government and Biden as his Vice President had played a big role in bringing it about. But the recent assassination of leading Iranian nuclear scientist Mohsen Fakhrizadeh, may experts believe, could tie Biden's hands by vitiating the atmosphere to such an extent that a return to the nuclear agreement becomes impossible.

However, even a partial improvement of US-Iran ties and removal of the sanctions on that country will see work on the strategically important Chabahar port will being speeded up as many companies that are now reluctant to participate for fear of US retaliation, will not face that constraint any more. This will boost India's strategic autonomy and give it more clout in the Gulf region as well as Central Asia.

8. US will push India on Kashmir only up to a point

Both Biden and his Vice President-elect Kamala Harris have been critical in the past about the Modi government's move to defang Article 370 and Article 35A, which gave special status to the erstwhile state of Jammu & Kashmir. They have also criticised the bifurcation of J&K into two Union Territories as well as some security-related measures such as shutting down internet services in the region to thwart terrorism backed by Pakistan.

But Indian analysts point out that both India and the US have travelled too far together to now let a single irritant, such as J&K, to get in the way of their overall strategic relationship.

“We will have to accept that both the President and his administration will make some noises about Kashmir. But that will be directed more that their domestic audience - the influential Left wing in the Democratic Party - than at India,” said a leading Indian foreign and strategic affairs expert.

9. Human rights activists in the US will pose a threat to India-US ties

Muslim women hold a placard during the Jan Jagran program on Article 370. the far Left of the Democratic Party has been critical of India for enacting legislations such as Article 370 and the CAA.

Like on Kashmir, the far Left of the Democratic Party has been critical of India for enacting legislations such as the Citizenship Amendment Act and for going ahead with the National Register of Citizens in Assam.

Then, sporadic incidents of hate crimes in the country have been blown up in the international media - with some help from a section of Indians opposed to Modi - as an all-pervading phenomenon.

Biden and Harris have also spoken out about these issues. But both are seasoned politicians and have tempered their statements in recent weeks to sound more conciliatory towards India and the Modi government.

Here, too, like above, the new US administration is expected to push India - but only up to a point, and not beyond.

10. Russia will be the joker in the pack

Obama's imposition of sanctions on Russia following the latter's annexation of Crimea from Ukraine had strained ties between the two countries. Biden is expected to continue Obama's policies on Russia. This could pose a problem for the Ministry of External Affairs in India and for Prime Minister Modi's outreach to the Russian Federation.

But the exact extent of any possible US reaction to closer India-Russia defence and strategic cooperation will be known only after the Biden administration spells out its policies in this regard.

India-US ties to remain on an even keel

Though it may be too early to say anything conclusive on how the Biden administration will turn out for India, policy makers in New Delhi are reasonably confident that bilateral ties will continue to progress, given the strong bilateral support they enjoy from both sides of the US political aisle.