Bilateral International Relations Prelims cum Mains

India and U.S. resolve to work through their trade differences

In News:

  • India and the U.S. resolved to work through their differences which have led to an impasse on trade issues.
  • Both the countries got down to bringing their strategic relationship back on track with both sides agreeing that the ties were broad and deep enough to accommodate each other’s concerns and differences over issues like Russia, trade and developments in the Persian Gulf.

India-US relations:

  • The ties between India and the United States have seen considerable improvement in the last two decades with a convergence of views on many issues.
  • The term “Indo-Pacific region” has now replaced the term “Asia-Pacific region” in the American diplomatic lexicon.
  • US has consistently described India as one of its major allies in the Indo-Pacific region; it renamed the former U.S. Pacific Command as Indo-Pacific Command, emphasizing the strategic linkage between the Indian and Pacific Oceans.

Bilateral trade between India and US

  • India exports steel and aluminium products worth about $1.5 billion to the US every year.
  • India’s exports to the US in 2016-17 stood at $42.21 billion, while imports were $22.3 billion.
  • India ranks ninth on the list of trading partners that run a trade surplus with the U.S.— it exports more to the U.S. than what it imports.


  • The Trump administration made India eligible for defense-related technologies under a “strategic trade authorization,” going a step further than the Obama administration, which had designated India as a “major defense partner.”
  • A series of defense-related agreements has been signed between India and US in recent years that would enable the two countries’ militaries to work closer together.
  • The Logistics Exchange Memorandum of Agreement (LEMOA), which allows the Indian and American forces to use each other’s facilities, was signed in 2016.
  • The Communications Compatibility and Security Agreement (COMCASA), which allows the United States to transfer communication equipment to India for the secure transmission of data and real-time information, was signed during the inaugural “two-plus-two” talks in 2018.
  • Also, the Basic Exchange and Cooperation Agreement (BESA), the last of the three “foundational agreements,” is likely to be signed soon.
  • The Quadrilateral grouping, uniting India, the U.S., Australia, and Japan, has been revived with meetings being held at regular intervals.

Counter-terrorism and internal security:

  • Cooperation in counter-terrorism has seen considerable progress with intelligence sharing, information exchange, operational cooperation, counter-terrorism technology and equipment.
  • India-U.S. Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing and capacity building.
  • In order to further enhance the counter terrorism cooperation between India and the U.S., an arrangement was concluded in June 2016 to facilitate exchange of terrorist screening information through the designated contact points.

Blacklisting Masood

  • The listing of Jaish-e-Mohammed leader Masood Azhar as an international terrorist by the UN is an example of uncritical American support to India.

Countering Pakistan

  • S has also thrown its weight behind the International Monetary Fund (IMF) to reinforce the Financial Action Task Force (FATF) demands on Pakistan.


Image result for india us trade war

Points of Differences:


  • United States has been critical of India’s bid to purchase the Russian made S-400 air defense system. Washington argues that if India buys the S-400, it will violate the Countering America’s Adversaries Through Sanctions Act (CAATSA).

Trade ties:

  • India has been a huge beneficiary of the Generalized System of Preferences (GSP) program, but the Trump administration is moving ahead to end it.

Note: The GSP is a preferential trade program that gives developing countries like India easier access to the American market by reducing duties on their exports.

  • Washington also wants India to relax e-commerce rules. Many rounds of talks on a comprehensive trade package have failed to yield any breakthrough.

Iran Sanctions:

  • India had refused to cut down on all oil supplies from Iran. In other words, India is unwilling to accept US diktat on stopping all oil imports from Iran

Trade Protectionist Policy

  • Trade protectionism of Trump administration has forced India to impose retaliatory measures.

WTO disputes:

  • Several issues/disputes in World Trade Organisation (WTO); Trade protectionism; Disputes on the new American steel and aluminium tariffs; disputes on Indian price reductions on medical devices.
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