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Amidst growing differences between India and Russia due to India’s growing closeness with the US and Russia’s congruence with China, India and Russia held the 21st India-Russia Annual Summit to discuss the entire gamut of bilateral relations, including regional and global issues. Recent events saw the distancing of Russia from India through the re-evaluation of its position as regards to AF-Pak region and the Indo-Pacific. Further Russia’s worsening relations with the West and lack of support for its position including from India saw the necessity to sit down and discuss the issues and reduce the trust deficit among the two. India and Russia focused on ways to boost bilateral cooperation in areas ranging from defence to energy and a coordinated approach to regional issues. N Chandra Shekar reports…

INDIAN PRIME MINISTER Narendra Modi welcomed Russian President Vladimir Putin emphasising the importance of strategic relations between the two nations. Referring to the Russian President as a “friend”, PM Modi said “our meeting today will strengthen our Special and Privileged Strategic Partnership. The initiatives that we take today will further increase the scope of our cooperation to new areas’.

Modi also noted in his opening remarks that this was only Putin’s second foreign visit since the start of the Covid-19 pandemic and reflects his personal commitment to bilateral relations. The year 2021 is important for bilateral ties as it marks five decades of the Indo-Soviet Treaty of Peace, Friendship and Cooperation of 1971 and two decades of the bilateral strategic partnership, he added.

In his opening remarks ahead of the bilateral meeting He said, “2021 is also special for our Strategic Partnership. Today was the inaugural meeting of the 2+2 dialogue between our Foreign and Defence Ministers. This has started a new mechanism to enhance our practical cooperation,”. India-Russia relations have been one of the success stories of global diplomacy and PM Modi’s warm relationship with President Putin has stood the test of the dynamic geopolitical situations and their congruence on global issues will influence regional and global politics.

President Putin said Russia perceives India as a “great power” with whom relations “are developing and are looking to the future”. Though trade turnover declined by more than 17% in 2020, the growth was more than 38% in the first nine months of 2021, he said. Total bilateral investments now stand at $38 billion, and this is roughly equally divided, with slightly more investments from the Russian side, Putin said, adding the two sides are also cooperating in areas such as energy, high technology and space. “We continue to work actively in the international arena, and… our positions on very many issues do coincide. We are undoubtedly concerned about everything related to terrorism and the fight against it, as well as drugs and organised crime,” he said. The two sides are also concerned about the developing situation in Afghanistan, he added.

India-Russia economic relations have been lopsided and marked by a steep imbalance favouring Russia. India-Russia annual trade in goods is about $10 billion. Whereas Russia’s trade with China is around $100 billion. In contrast India’s trade with US and China is around $100 billion. During the last 20 summits both sides have been repeatedly reiterating the need for enhancing trade and investment ties. One of the most visible glaring aspect of India Russia ties is its failure to boost trade. Trade between India and Russia has been one way with India becoming Russia’s largest armament buyer other than energy. This summit has dawned on both of them a new sense of realisation to leverage on the strong historical ties and lay new grounds for expansive economic cooperation.

The India-Russia Joint Statement called ‘Partnership for Peace, Progress and Prosperity’ said, “The completion of 5 decades of the 1971 Treaty of Peace, Friendship and Cooperation and 2 decades of Declaration on Strategic Partnership is symbolic of the long standing and time-tested India-Russia relations characterized by mutual trust, respect for each other’s core national interests and similarity of positions on various international and regional issues.” The meeting saw the signing of 28 agreements across sectors from defence to energy to space exploration, science and technology, heavy engineering, to trade and investment.

Agreements/MoUs signed during the 21st India-Russia Annual Summit in New Delhi

Roadmap for science, technology and innovation cooperation between the Ministry of Science and Higher Education of the Russian Federation and the Ministry of Science and Technology of the Government of the Republic of India.

Memorandum of cooperation in the field of intellectual property between the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of the Republic of India and the Federal Service for Intellectual Property, Russian Federation.

Agreement on Program of the Military-Technical Cooperation from 2021-2031. [This 10-year defence cooperation programme outlines the ongoing defence cooperation and future possible cooperation between the two countries. Such agreements have been signed since 1994.]

A MoU between Joint Stock Company Rosgeologia (ROSGEO), a legal entity incorporated under the laws of the Russian Federation and Geological Survey of India (GSI), Ministry of Mines, Government of the Republic of India on cooperation in the field of geoscience. [It seeks cooperation in the field of earth sciences and geological study of subsoil, long-term cooperation in the area of geological onshore and offshore exploration works.]

Protocol on introduction of amendments to the Merchant Shipping Agreement between the Government of the Republic of India and the Government of the Russian Federation. [It introduces an amendment leading to recognising the seafarer’s identity documents.]

A cultural exchange programme between the Ministry of Culture of the Government of the Republic of India and the Ministry of Culture of the Russian Federation for the years 2021-2024.

Protocol between the Department of State Support of the Art and Folk Creativity of the Ministry of Culture of the Russian Federation and Indian Council for Cultural Relations under the Ministry of External Affairs of the Republic of India on the organisation of culture festivals between the Russian Federation and the Republic of India for 2022-2023.

An agreement between the Government of the Republic of India and the Government of the Russian Federation on technology protection due to cooperation in the field of research and use of outer space for peaceful purposes and building and operation of launch vehicles and ground-based space infrastructure.

Protocol between Government of the Russian Federation and Government of the Republic of India on allotment of land plots for allocation of Consular offices of the Republic of India in the Russian Federation and terms of housing the Consulate General of the Republic of India in the city of Vladivostok.

Commercial and other Agreements/MoUs

A MoU between Opto-electronics Factory, Dehradun and JSC Rosoboronexport.

A cooperation agreement between Reserve Bank of India and the Bank of Russia in the field of responding to cyber attacks

A MoU on cooperation between ICAI (The Institute of Chartered Accountants of India) and IPAR (The Institute of Professional Accountants of Russia). [It seeks to establish collaboration through joint research, quality support, capability and capacity building.]

A MoU for cooperation in the power sector between NTPC Ltd, Government of India Enterprise and Inter Rao-Export LLC.

A memorandum of cooperation between SAIL and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]

A memorandum of cooperation between JSPL (Jindal Steel and Power Ltd) and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]

A MoU between JSW Steel Ltd and Russian Company SSC FSUE TsNIIchermet im. I. P. Bardin. [It seeks to join efforts in carrying out research, technological and strategic work in the field of metallurgical technologies.]

A statement of intent of collaboration between IOCL and SIBUR. [It seeks to consider the possibility to explore the feasibility of setting up a Dual Feed Cracker Unit along with downstream units at Odisha.]

A MoU between National Sports University, Imphal and Russian International Olympic University (RIOU), Sochi, Russia.

A MoU between Indian Institute of Science Education and Research Kolkata (India) and A.V. Zhirmunsky National Scientific Centre of Marine Biology of the Far Eastern Branch of Russian Academy of Sciences (NSCMB FEB RAS) (Russian Federation). [It seeks to establish Centre for Excellence in Blue Economy for collaborative exchanges]

A MoU between Lovely Professional University, Phagwara, India and Southern Federal University, Russia. [It seeks to collaborate on academic and research activities, exchange of academic information, student and faculty exchange etc.]

An agreement for academic collaboration between University of Delhi and Skoltech University, Moscow. [It seeks to promote capacity-building and expertise in scientific areas and is aimed at developing programmes and exchanges for national technological development.]

An agreement between the Federal State Autonomous Educational Institution of Higher Education I.M.Sechenov First Moscow State Medical University of the Ministry of Health of the Russian Federation (Sechenov University) and University of Delhi. [It seeks to promote cooperation in life sciences in the fields of Nano-medicine, Regenerative Medicine, Molecular Medicine, Bio-medical Science, Translational Medicine, Pre-clinical and Clinical Research, New Drug Discovery, Industrial Technologies and Entrepreneurship.]

A MoU between Uttar Pradesh FICCI and BCCI, Russia. [It seeks to establish links, exchange experience in international cooperation, small and medium businesses.]

A MoU on manpower supplies between Magic Billion and Volshebny Milliard.

A statement of intent of collaboration between IOCL and Gazpromneft for VGO Hydrocracking Technology, Catalytic Iso-dewaxing for lobs and catalyst regeneration for fixed bed catalyst.

A MoU between Rosneft and OVLled Indian Consortium on Training Cooperation. [It seeks to provide education and training programs in the oil and gas sector.]

A MoU between Indian Trade Promotion Organisation and Roscongress Foundation for bilateral trade cooperation.

A crude oil supply agreement between Rosneft and Indian Oil Corp. Ltd. [It seeks to renew the previous contract between Rosneft and IOCL.]. FOCUS 28 Oct-Nov-Dec | 2021 OPEN TRADE African Continental

PRESIDENT JOSEPH R. BIDEN welcomed Prime Minister Narendra Modi to the White House today for their first in-person Leaders’ engagement, renewing their close relationship and charting a new course to advance the partnership between the world’s largest democracies.

The Leaders affirmed a clear vision that will guide the U.S.-India relationship forward: building a strategic partnership and working together with regional groupings, including ASEAN and Quad members, to promote shared interests in the Indo-Pacific region and beyond; developing a trade and investment partnership that increases prosperity for working families in both countries; finishing the fight against the COVID-19 pandemic and other health challenges; galvanizing global efforts to scale up climate action; strengthening democratic values and institutions in support of our respective peoples; and enhancing people-to-people ties that have made both countries stronger.

President Biden and Prime Minister Modi expressed deep pride and appreciation about their nations’ close cooperation to fight the COVID-19 pandemic over the past year, as governments, civil society, businesses, and diaspora communities mobilized in unprecedented ways to share emergency relief supplies during each country’s times of need. Having administered hundreds of millions of doses of vaccine to protect their own citizens at home and abroad, they reiterated their commitment to lead the global effort to end this pandemic. President Biden welcomed India’s announcement that it will resume exports of safe and effective COVID-19 vaccines including to COVAX. The Leaders also hailed the finalization of the overarching Memorandum of Understanding on Health and Biomedical Sciences to bolster cooperation on key areas affecting global health, including pandemic preparedness and biomedical research, to reduce the risk of future pandemics.

Prime Minister Modi welcomed President Biden’s initiative to convene the Global COVID-19 Summit on Ending the Pandemic and Building Back Better to Prepare for the Next, given our shared commitment to combat the Covid-19 pandemic.

Prime Minister Modi welcomed U.S. leadership on climate action, including the return of the United States to the Paris Agreement. President Biden expressed support for Prime Minister Modi’s intention to achieve a domestic goal of installing 450 GW of renewable power by 2030 and acknowledged the importance of mobilizing finance for investments in renewables, storage, and grid infrastructure that will guarantee clean, reliable power for millions of Indian households. Through the two main tracks of the Strategic Clean Energy Partnership (SCEP) and the Climate Action and Finance Mobilization Dialogue (CAFMD) under the U.S.-India Climate and Clean Energy Agenda 2030 Partnership, the United States and India will accelerate clean energy development and deployment of critical technologies to advance a clean energy transition. India welcomed the United States joining the Leadership Group for Industry Transition (LeadIT).

President Biden reaffirmed the strength of the defense relationship between the United States and India and the unwavering commitment to India as a Major Defense Partner through close defense engagements in information sharing, sharing of logistics and military-tomilitary interactions, strengthening cooperation in advanced military technologies, and expanding engagements in a multilateral framework including with regional partners. The Leaders welcomed the deepening of advanced industrial cooperation. In this context, they noted the recent project to co-develop air-launched unmanned aerial vehicles (UAVs) under the Defense Technology and Trade Initiative, and encouraged more such joint efforts. They called upon the government and private stakeholders to use the existing ecosystems of innovation and entrepreneurship in defense industries for co-development, coproduction and expanding mutual defense trade. They also looked forward to the inaugural meeting of the Industrial Security Agreement summit to facilitate high-end defense industrial collaboration.

The Leaders reaffirmed that the United States and India stand together in a shared fight against global terrorism, will take concerted action against all terrorist groups, including groups proscribed by the UNSCR 1267 Sanctions Committee, condemned cross-border terrorism, and called for the perpetrators of the 26/11 Mumbai attacks to be brought to justice. They denounced any use of terrorist proxies and emphasized the importance of denying any logistical, financial or military support to terrorist groups which could be used to launch or plan terror attacks. They noted that the upcoming U.S.-India Counterterrorism Joint Working Group, Designations Dialogue, and renewed U.S.-India Homeland Security Dialogue will further strengthen counterterrorism cooperation between India and the United States, including in the areas of intelligence sharing and law enforcement cooperation. They also welcomed opportunities to develop counterterrorism technologies. They commended the U.S.-India Counter Narcotics Working Group and are committed to finalizing a new Bilateral Framework which would facilitate joint efforts to combat drug trafficking, illicit narcotics production and precursor chemical supply chains.

The Leaders resolved that the Taliban must abide by UNSC Resolution 2593 (2021), which demands that Afghan territory must never again be used to threaten or attack any country or to shelter or train terrorists, or to plan or finance terrorist attacks, and underscored the importance of combating terrorism in Afghanistan. The Leaders called on the Taliban to adhere to these and all other commitments, including regarding the safe, secure, and orderly departure from Afghanistan of Afghans and all foreign nationals and to respect the human rights of all Afghans, including women, children, and members of minority groups. They emphasized the importance of efforts to provide humanitarian assistance to Afghanistan, called on the Taliban to allow full, safe, direct and unhindered access for the United Nations, its specialized agencies and implementing partners, and all humanitarian actors engaged in humanitarian relief activity, including with respect to internally displaced persons. Reflecting their long-term commitment to promoting development and economic opportunity for the Afghan people, they determined to continue to closely coordinate and to work jointly with partners toward an inclusive and peaceful future for all Afghans. The Leaders called for an end of the use of violence, for release of all political detainees, and for a swift return to democracy in Myanmar. They further called for the urgent implementation of the ASEAN Five Point Consensus.

The Leaders welcomed increased cooperation under the Quad, including in the multilateral domain given their shared vision of a free, open and inclusive Indo-Pacific region with respect to territorial integrity and sovereignty, and international law. President Biden applauded India’s strong leadership during its UN Security Council Presidency in August 2021. In this context, President Biden also reiterated U.S. support for India’s permanent membership on a reformed UN Security Council and for other countries who are important champions of multilateral cooperation and aspire to permanent seats on the UN Security Council. He also reaffirmed U.S. support for India’s entry to the Nuclear Suppliers Group. They welcomed the extension of the Statement of Guiding Principles on Triangular Cooperation for Global Development to leverage the combined capacities of India and the United States to address global development challenges around the world, particularly in the Indo-Pacific and Africa. In addition, they looked forward to the launch of the U.S.- India Gandhi-King Development Foundation to advance cooperation on health, education, and the environment.

They looked forward to reconvening the India-U.S. Trade Policy Forum before the end of 2021, to enhance the bilateral trade relationship by addressing trade concerns, identifying specific areas for increased engagement and developing an ambitious, shared vision for the future of the trade relationship. The Leaders looked forward to convening the U.S.-India CEO Forum and the Commercial Dialogue in early 2022, leveraging the talents of the private sector. The Leaders noted ongoing negotiations on an Investment Incentive Agreement that facilitates investment in development projects and committed to an early conclusion. They further discussed how the United States and India will work together to set sustainable and transparent rules of the road that will lift economies throughout the Indo- Pacific. They welcomed increased collaboration through the Coalition for Disaster Resilient Infrastructure and the upcoming Indo-Pacific Business Forum.

The Leaders noted that the movement of highly skilled professionals, students, investors and business travelers between their countries enhances their economic and technological partnership. The Leaders highlighted the importance of resilient and secure supply chains between the two countries. They welcomed the involvement of the private sector in both countries in building stronger linkages in critical sectors such as pharmaceuticals, biotechnology, semiconductors, and information technology. The Leaders recognized the importance of critical and emerging technologies in delivering economic growth and achieving strategic priorities. They looked forward to reviving the High Technology Cooperation Group (HTCG) in early 2022, with the objective of accelerating high technology commerce in key areas. The Leaders decided that the United States and India must continue and expand their partnership in new domains and many areas of critical and emerging technology – space, cyber, health security, semiconductors, AI, 5G, 6G and future generation telecommunications technology, and Blockchain, that will define innovation processes, and the economic and security landscape of the next century. The Leaders recognized the foundational need to address vulnerabilities and threats in cyberspace, including to promote critical infrastructure resilience, and welcomed the increasing partnerships among governments to counter ransomware and other cyber-enabled crime, including efforts to combat cybercriminals that operate from within their borders. The Leaders reiterated the importance of sustainable capacity-building and noted that mutual technical assistance efforts to respond to cyber threats should be prioritized and increased, including through dialogues, joint meetings, training and sharing of best practices. They looked forward to the finalization of a Space Situational Awareness Memorandum of Understanding that will help in sharing of data and services towards ensuring the longterm sustainability of outer space activities by the end of the year.

As global partners, the United States and India resolved to further strengthen their collaboration in education, science and technology and people-to-people engagement. The Leaders welcomed close consultations through the 2+2 Ministerial Dialogue of the Foreign and Defense Ministers of India and the United States to be held later this year. The Leaders celebrated the deep and vibrant ties between the people of both nations, which underpins the special bond between the United States and India, and has sustained their partnership for nearly 75 years. They reaffirmed, and encouraged others to embrace, their shared values of freedom, democracy, universal human rights, tolerance and pluralism, and equal opportunities for all citizens, and committed to pursue efforts towards sustainable development and global peace and security.

Prime Minister Modi conveyed his deep appreciation for the repatriation of antiquities to India by the United States. The Leaders committed to strengthen their efforts to combat the theft, illicit trade and trafficking of cultural objects.

Reflecting shared values and principles, and growing strategic convergence, President Biden and Prime Minister Modi resolved to advance the U.S.-India Comprehensive Global Strategic Partnership, and looked forward to what the United States and India will achieve together.

The recent meeting between the Indian Prime Minister Narendra Modi and US President Joe Biden evoked a lot of interest for watchers in the diplomatic sphere given the fact that Narendra Modi had been seen openly supporting the Republican Party’s incumbent Presidential candidate Donald Trump. It was indeed a pleasant surprise that Joe Biden put US-India relations ahead and lead the talks to build on existing relations and to strengthen US-India trade relations which were going down hill under the previous regime. N Chandra Shekar reports on some of the key takeaways from this visit…

THE INDIA-US TRADE RELATIONS have been much in the storm in the recent years. India’s trade surplus with the US had become a bone of contention for the erstwhile President Trump. Both India and US accused each other of unfair trade practices and were among the most active litigants at the World Trade Organisation. Not withstanding the bonhomie between President Trump and Prime Minister Narendra Modi both nations have not been able to arrive at common ground on the myriad of trade issues that plague the two. When US President Joe Biden and Indian Prime Minister Narendra Modi met in Washington last month for the first time in Biden’s presidency, their talks on trade were limited and only briefly referenced in a joint statement. This cursory treatment suggests trade has been relegated to secondary importance. Instead, this should be an inflection point for growing the US-India trade relationship, ideally to eventually match the scale and importance of their strategic relationship.

While US President Joe Biden has begin to pursue his restorationist agenda on “rescuing US foreign policy” after Donald Trump’s presidency, his agenda on USIndia ties will differ. While US ties with partners across the Atlantic for instance, will warrant Biden’s mitigation efforts, the agenda with India will pertain to furthering Trump’s record. However, the domain of US-India trade, which peaked at $146.1 billion in 2019, will cause some trepidation owing to frictions witnessed in the Trump years. Given Trump’s focus on exacting “fair and reciprocal” trading arrangements, his administration vocalised apprehensions against nations that had amassed trade surpluses over the US. Even though India’s trade surplus is less than a tenth of the US-China trade imbalance, New Delhi did not escape Trump’s action against nations “cheating” the US. It all started with the imposition of import tariffs on steel and aluminium from twelve countries including India. This later developed into a full-fledged bilateral trade war with China. The US also rolled back export incentives for Indian Exporters under its Generalised System of Preferences (GSP) programme affecting India’s exports worth USD 6billion dollars to US under the scheme. In retaliation, India imposed high customs duties on twenty-eight US products, including almonds. The US administration has also started targeting nations who are having a trade surplus with the US including India. With either side not giving in a whole lot of issues have become a bone of contention.

For India one of the key issues has been the withdrawal of the concessions offered to Indian Exporters under the US Generalised System of Preferences which allowed tariff free import of selected commodities (around 3500) from 129 countries for failure to provide equitable and reasonable market access. GSP provides nonreciprocal, duty-free tariff treatment to certain products imported from qualifying developing countries. India has given a representation with the US trade officials for the extension of the GSP.

One of the important issues for the US is its export of farm and poultry products. Sanitary and phytosanitary (SPS) barriers in India limit U.S. agricultural exports. The United States has been raising questions on the scientific and risk-based justifications of such barriers. India had banned chicken imports from US citing avian infuenza risks. But in 2015, the US obtained a favourable verdict from the WTO’s DSB. The WTO ruled that India’s measure was disproportionate to the threat and constituted a non-tariff barrier. In the context of the WTO verdict, the government made changes in the health certification requirement for imported poultry items from the US.

Further the US accused India that it is under reporting subsidies given under Minimum Support Price (MSP) This is the first ever Committee on Agriculture notification by a country under The Agreement on Agriculture (AoA). The US also raised obstructions on India’s food security programme at the Buenos Aires Ministerial Conference (MC). Because of this US stand, WTO failed to reach consensus to provide a permanent solution to the Public Stock Holding of Food Grains on food security ground. As a reply, India and China asked the developed world to reduce their exorbitant levels of farm subsidies. At the Buenos Aires Ministerial Conference of the WTO, the US argued that countries like China and India doesn’t qualify for the Special and Differential Treatment benefits given for developing countries. India strongly objected to the US version

Bilateral tensions have increased over each side’s tariff policies. India has relatively high average tariff rates. The US increased tariff on Steel and Aluminium imports from twelve countries including India. The Indian government approached the WTO’s Dispute Settlement Body against the US move. The government’s stand is that use of the tariff against selected countries is a violation of the Most Favoured Nation clause of the WTO.

As a response to the US tariff on Steel and Aluminium, Commerce Ministry on June 20th notified tariff hike on twenty-nine US products, including almonds, apples and phosphoric acid etc. (worth $10 bn) in retaliation to the steel and aluminium tariff hikes by the US. At the same time, India reduced tariff on selected imports from India including that on few categories of bikes to defuse the trade tension. Perhaps the most devastating step by the Trump administration has been to put a curb on H1 B visas. A key issue for India is U.S. temporary visa policies, which affect Indian nationals working in the United States. India is challenging U.S. fees for worker visas in the WTO and monitoring potential U.S. action to revise the H-1B (specialized worker) visa program. Under its visa restrictions policies, the number of visas to be issued under H1B was reduced; Visa fees were doubled for H1B; Visa eligibility in terms of annual income raised; thereby reducing opportunities for India’s skilled Labour. It also stated that H1 B visas will be issued for single projects. After the completion of the project, the person would have to return without looking for any other job in the US. Further the qualification requirement was also changed such that a two-year degree/diploma was invalidated, and a four-year degree qualification was necessitated for the issue of H1B visas. All these steps hurting the operations of Indian IT firms in the US.

The United States continues to press India to address its “forced” localization practices, such as incountry data storage, domestic content, and domestic testing requirements—viewed by the United States as presenting barriers to trade with India. Adding to U.S. concerns are India’s new restrictive localization rules for certain financial data flows, which affect companies such as Visa and MasterCard. At the same time, India has moved to ease some local sourcing rules for singlebrand retailers, which would affect companies such as Apple. The US had taken India to the WTO’s Dispute Settlement Body against the limited

local sourcing requirement under the National Solar Mission and secured a favourable verdict. Later, the US alleged that India is not following the verdict and sought WTO’s permission for taking retaliatory measures.

India is continuously listed under the priority watch list in the US Intellectual Property documents that is prepared under the infamous Special 301 law. India is placed along with China and ten other countries. According to the US, countries in the list will be the subject of particularly intense bilateral engagement in future.

A surprising development is US policy on currency management. Here, the US included India under currency practices and macroeconomic policies monitoring list along with China, South Korea, Japan etc.

The US also raised objections at the WTO to the export incentives given by India arguing that India doesn’t qualify to provide export incentives allowable for low income developing countries. It stated that India’s GNI per capita income crossed $1000 for three consecutive years and hence the country is not eligible to provide export subsidies. The US objected to five export incentives given by India.

The United States and India trade on WTO terms, as they do not have a bilateral FTA. The United States and India often have opposing stances in the WTO, whose future direction is unclear amid debate over institutional reforms and future negotiations. India objected to the US stand of vetoing the appointment of judges to the WTO’s Dispute Settlement Body. India demanded that US should not block the running of the DSB and this is needed to protect the multilateralism-based governance of global trade. India and 37 other countries made a formal proposal for the appointment of the judges that has been blocked by the US. The US demanded changes in the functioning of the Appellate Body and demanded an amendment to the existing rule which allows judges to continue cases assigned to them before their terms ended.

Currently the United States and India are holding negotiations to address bilateral trade frictions. They reportedly are discussing a deal for U.S. reinstatement of GSP for India in exchange for certain market access commitments from India. Both are understood to have resolved most of the important trade issues, thus paving the way for an ‘initial trade package’ wherein the two countries are looking for an equitable market access.

However it would be unrealistic to hope that the United States and India might suddenly work together multilaterally on trade, which makes the bilateral trade relationship even more essential for resolving specific trade problems and generating productive dialogue going forward. Yes, the value of US-India bilateral trade and cross-border investments continues to grow—but this part of the relationship between the US and India remains unstable. It’s threatened by a range of risks, including regulatory trends that restrict economic integration and the threat of economic sanctions over India’s defense trade with Russia.

To shift toward stability, Washington and New Delhi will need to articulate a joint vision for a deeper, broader, and more integrated economic relationship