The U.S.’s decision to not extend Iran sanctions waivers , including the one provided to India, has notable implications for India-U.S. relations, given the importance of New Delhi’s energy relationship with Tehran. It comes on the heels of many other deleterious developments for bilateral ties including the U.S.’s decision to withdraw GSP benefits for Indian exports (in retaliation for Indian tariffs that the U.S. deemed to be prohibitively high) and the Trump administration’s discontent deepening over India’s policies on e-commerce, intellectual property rights and data localisation.
These India-U.S. trade and economic tensions aren’t new; the non-security dimension of the relationship has long lagged behind the fast-growing defence side. Still, the complaints and perceived grievances, especially from the U.S., have seemingly intensified in the Trump era.
Both sides have played down these differences and offered reassuring data points: India will scale up oil imports from other top producers; the GSP withdrawal will have minimal impact on India’s economy; the two capitals are working actively on high levels, most recently through the U.S.-India CEO Forum and the India-U.S. Commercial Dialogue, to ease tensions; and above all the strength of the bilateral relationship can easily withstand all these headaches.
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This is all true. But let’s be clear. A full-fledged strategic partnership, which both countries endorse, will be difficult to achieve amid such multiple and long-standing disconnects on the trade and economic side. Indeed, if bilateral ties are largely driven by technology transfers, arms sales, joint exercises, and foundational agreements on defence, this amounts to a deep but one-sided security relationship, and not a robust and multifaceted strategic partnership.
To be sure, India-U.S. relations extend well beyond security. Recent joint statements have dwelt on the potential for cooperation on initiatives ranging from clean energy to innovation. And despite the problems, bilateral trade in goods and services has increased over the last decade. Still, so long as the non-security nuisances affect the bilateral relationship, the shift from a strong security relationship to a bonafide strategic partnership will be difficult. After all, one rarely hears complaints or concerns about trade and economic matters in the U.S.’s relations with the U.K., Australia, or Israel, some of its other strategic partners. The U.S. and India have long struggled to agree on what a strategic partnership should look like. Still, no matter how it is defined, any strategic partnership must be broad-based, with trust and cooperation present across a wide spectrum of issues and not just limited to close collaborations in the guns-and-bombs category. In this regard, a true strategic partnership remains, at least for now, elusive between India and the U.S.
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