US President Joe Biden Indian Prime Minister Narendra Modi toasts during a state dinner at the White House in Washington, DC on Thursday, June 22, 2023.
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US-India relations enter a new chapter when Prime Minister Narendra Modi and President Joe Biden announced a wide range of technology and defense deals.
“As India and the US work together on semiconductors and key minerals, it will help the world create more diversified, flexible and reliable supply chains,” Modi said in his speech. before a joint session of the US Congress. “We were strangers to defense cooperation at the turn of the century, but now the United States has become one of our most important defense partners.”
Former diplomats and analysts told CNBC they just look forward to that relationship growing stronger and generating more deals.
That includes more military deals, said Atul Keshap, president of the US-India Business Council and former chargé d’affaires at the US Embassy in New Delhi.
“That would be great for democracy, great for our two countries, and quite frankly, great for the Indo-Pacific region and the world. So I feel great. optimistic and I’m actually quite impressed with the products that have been announced by both governments,” he told CNBC’s “Squawk Box Asia” on Friday.
US President Joe Biden receives Indian Prime Minister Narendra Modi of the Republic of India during his official State visit in Washington, DC.
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The two nations strengthened their defense partnership this week, Featured deals including building General Electric F414 jet engines in India and repairing US Navy ships deployed at Indian shipyards.
However, the US and India are not allies and their relationship will be very different from what other countries in the region have with Washington.
“The Biden administration has bet big on the strategic and economic relationship. And that doesn’t depend on India supporting the US in the long term. It’s not an alliance, it’s an alliance. one of equal partners and equal strategic interests,” said Raymond Vickery, senior associate for US-India policy studies at the Center for Strategic and International Studies.
More tech deals on the horizon
The US and India are also expected to reach more deals on technology in the future, as Washington pursues a strategy of “making friends” – a strategy in which they diversify away from China and exploit its potential. of other countries in the region.
“India needs advanced technology. And I think the Americans have become much more open to sharing those important technologies and moving in the direction of helping India build its own defense production base.” , Harsh V. Pant, vice president of research and speaking. foreign policy at the Observer Research Foundation, a Delhi-based think tank.
The United States and India have agreed to cooperate in space and artificial intelligence and work together to ensure resilient supply chains of critical minerals.
“These will inevitably lead to further transactions [as] The habit of cooperation and trust in the relationship is growing,” said Arun Singh, a non-resident senior fellow at Carnegie India.
Singh, who previously served as India’s ambassador to the US, said: “The US understands that human technological capital is a very important part of America’s global leadership in innovation.
“Indian-born tech entrepreneurs and Indian-born CEOs are an integral part of America’s leadership in innovation,” he said, adding that his state visit Modi has further bolstered US investments in key Indian technology sectors.
Don’t expect a free trade agreement soon
The joint statement noted that Mr. Modi “expressed India’s interest in being recognized as a designated country by the United States under the Trade Agreements Act to further enhance the integration of both economies.” economy and further promote trade and investment between the two countries.”
Despite the closer relationship, ORF’s Pant said a free trade agreement is unlikely in the short to medium term.
“Comments from both political camps show no real willingness to move towards free trade agreements… That seems to be the bottleneck at the moment,” he said.
Similarly, former ambassador Singh said, “The US is also reluctant to make any such deal until it improves its infrastructure and enhances the competitiveness of American workers.”
However, the US and India have shown a willingness to improve their trading relationship. Both parties agree to terminate six outstanding disputes at the World Trade Organization.
— Naman Tandon of CNBC contributed to this report.
