New Delhi: When US Secretary of State Mike Pompeo sits down for talks with his Indian counterpart Subrahmanyam Jaishankar on Wednesday the aim will be to inject new energy into a relationship that seems to have been weighed down by a series of disputes in the commercial space.
Pompeo arrived in New Delhi late Tuesday and his first engagement on Wednesday is expected to be a closed door meeting with Indian business leaders. He will then call on Prime Minister Narendra Modi who took office for a second time less than a month ago after an emphatic win in the April-May polls. This will be followed by his meeting with Jaishankar.
Ahead of the Pompeo’s visit, the emphasis seemed to be on underlining that the India-US Strategic Partnership would not be overshadowed by trade irritants. Areas of convergence were stressed by both sides including Pompeo in a speech organised by the US India Business Council in Washington earlier this month. Ties between the two countries have warmed rather quickly in the past two decades with top level exchanges, increased military contacts, India buying more and more military hardware from the US with a congruence of views on terrorism and the unpredictable rise of China.
Ahead of the talks, Mint takes a look at five key issues that are to be on the table:
1) Escalating trade tensions: Despite the growing strategic engagement between the two countries, trade ties under the Trump administration has only deteriorated. Trump has often termed India “tariff king" citing high tariffs in a couple of items including Harley Davidson bikes. Post the withdrawal of duty free benefits to Indian exporters under the Generalised System of Preferences (GSP) regime, India on 16 June imposed retaliatory tariffs on 28 US goods which it had postponed since a year. Pompeo is likely to discuss about “tough topics" with his Indian counterpart including GSP, data localization and trade barriers for American companies. “We remain open to dialogue, and hope that our friends in India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people, and private sector companies," Pompeo said on 12 June speaking at the 44th annual meeting of the US-India Business Council in Washington DC. A senior State Department official said last week that Pompeo would aim to “jump start" a dialogue on trade issues during his visit.
2) Oil: The volatility in crude oil prices and its impact on Indian consumers is likely to figure in the discussions during US secretary of state Michael Richard Pompeo's visit. The visit comes in the backdrop of increasing tensions in the Persian Gulf with the US tightening sanctions on Iran, and production curbs by the Organization of the Petroleum Exporting Countries (Opec). India was among Iran’s top oil buyers with imports of 23.5 million tonnes in 2018-19. However, with the US’s conditional waiver for Iranian oil imports to eight countries, including China and India, expiring on 2 May, India has stopped all oil imports from the Persian Gulf nation. While sourcing crude from other suppliers is not an issue, the price at which it is bought will impact the Indian economy. Since India imports over 80% of its crude needs and 18% of natural gas, higher energy prices stoke inflation and hurt the country’s economic growth. In a first, Indian Oil Corp., the country’s largest refiner, has also inked two term contracts totalling 4.6mt of US crude oil for 2019-20 from Norway’s Equinor ASA and Algeria’s state energy company Sonatrach. India is also sourcing liquified natural gas and oil from the US, with Indian firms investing $4 billion in US shale gas assets.
3) 5G: India is currently in the process of finalizing a road map for 5G, which is the next-generation technology for wireless communications that is expected to improve data speed and propel Internet of Things, yielding industry-altering changes for sectors such as manufacturing, healthcare, education, transport and agriculture. 5G is expected to add billions to the world GDP. Earlier this month, India’s department of telecommunications kick-started the process for 5G rollouts by seeking a comprehensive review of the sector regulator’s recommendations on the upcoming spectrum auctions. It also approved a one-year 5G trial period and a one-time fee of ₹5,000 for entities seeking experimental spectrum to conduct trials. It has, however, not stated explicitly whether it will allow Huawei to participate in the trials as the DoT awaits a recommendation from the committee examining possible security risks arising out of Huawei’s presence in 5G networks. Since last year, the US has pressed its allies to ban Huawei from 5G rollouts on the back on suspicions about Chinese espionage, allegations the company has always denied. Australia and Japan have barred Huawei, while Canada and New Zealand are likely to follow suit. Russia, Turkey, Saudi Arabia, however, have welcomed Huawei. Many countries in Europe are still to make a decision.
4) H1B visas: India will want to hear from Pompeo whether the US plans to put any caps on the numbers of H1B visas Indian IT professionals can apply for. This comes against the backdrop of reports that the US was planning to restrict the popular H-1B visa programme in apparent retaliation for India insisting that data generated in India by US companies be stored in the country. India is the largest recipient of the temporary visas numbering 85,000 given out each year. A senior US state department official: last week said that the US attached “great importance to the India-US relationship."
“Indians have contributed a great deal under the H-1B programme to the US economy. I think the Secretary (Pompeo) will be able to assure the Indian leadership that we have no plans to place caps on H-1B visas." A general review of the programme was underway, the official said, adding that this was not in anyway linked to the data localisation issue.
5) Afghanistan, terrorism: India would like to the US troops stay in Afghanistan and stabilise the country rather than cut a deal with the Taliban. New Delhi is not happy with the talks that the US has been having with the Taliban that could see US troops leaving the country soon. Part of New Delhi’s concerns stem from the fact that there little clarity as to how the discussions are proceeding. India fears that a Taliban controlled government in Kabul could quickly side with Pakistan. The subject of terrorism is an “inescapable" item on the agenda of bilateral talks, said a person familiar with the developments on Tuesday. The US was seen as pressing China to drop its block on efforts to get Masood Azhar, chief of the Pakistan based Jaish-e-Mohammed (JeM) terrorist group, listed as a terrorist under UN norms.
Asit Ranjan Mishra, Utpal Bhaskar and Navadha Pandey contributed to this story