U.S. President Joe Biden India’s Prime Minister Narendra Modi toast during a state dinner on the White House in Washington, DC on Thursday, June 22, 2023.
Bloomberg | Bloomberg | Getty Images
U.S.-India relations entered a recent chapter as Prime Minister Narendra Modi and President Joe Biden announced a slew of technology and defense deals. Â
“When India and the U.S. work together on semiconductors and demanding minerals, it helps the world in making supply chains more diverse, resilient and reliable,” Modi said during a speech to the joint session of the U.S. Congress. “We were strangers in defense cooperation on the turn of the century, but now the US has turn into certainly one of our most significant defense partners.”
Former diplomats and analysts told CNBC they only expect that relationship to grow stronger and generate much more deals.
That features more military agreements, in accordance with Atul Keshap, president of the U.S.-India Business Council, and former charge d’affaires at the US Embassy in Recent Delhi said.
“It may be great for democracy, great for our two countries, and admittedly, great for the Indo-Pacific and the world. So I’m feeling very bullish and I’m really quite impressed by the deliverables which have been announced by each governments,” he told CNBC’s “Squawk Box Asia” on Friday.Â
U.S. President Joe Biden hosts India’s Prime Minister Narendra Modi of the Republic of India for an Official State Visit in Washington, DC.
The Washington Post | The Washington Post | Getty Images
The 2 nations strengthened their defense partnership this week, striking deals that include constructing General Electric F414 jet engines in India and repairing deployed U.S. Navy ships in Indian shipyards.
Still, the U.S. and India are usually not allies and their relationship might be very different from what other countries within the region have with Washington.
“The Biden administration has placed an enormous bet on the strategic and economic relationship. And that is just not contingent upon India supporting the US down the road. It isn’t an ally relationship, nevertheless it is certainly one of equal partners and equal strategic interest,” said Raymond Vickery, senior associate in U.S.-India policy studies on the Center for Strategic and International Studies said.Â
More tech deals on the horizon
The U.S. and India are also expected to achieve more deals on technology in the long run, as Washington pursues “friend-shoring” — a method during which it diversifies away from China and taps into the potential of other countries within the region.
“India needs leading edge technology. And I feel Americans have turn into rather more open about sharing those critical technologies and moving in a direction, which also helps India construct its own defense manufacturing base,” said Harsh V. Pant, vice chairman of studies and foreign policy at Observer Research Foundation, a Delhi-based think tank.
The U.S. and India agreed to work together across space and artificial intelligence, while also collaborating to secure resilient critical minerals supply chains.
“These are certain to steer to further deals [as] the habit of partnership and confidence in the connection grows further,” said Arun Singh, non-resident senior fellow at Carnegie India.Â
“The U.S. understands that the human tech capital is an important a part of U.S. global leadership in innovation,” said Singh, who previously served as India’s ambassador to the US.Â
“Indian origin tech entrepreneurs and Indian origin CEOs were an integral a part of U.S. leadership in innovation,” he said, adding that Modi’s state visit has further cemented U.S. investments in Indian critical technology areas.Â
Don’t expect a free-trade agreement soon
The joint statement noted Modi “expressed India’s interest towards being recognized as a Trade Agreements Act-designated country by the US to further enhance the mixing of each economies and to further promote trade and investment between two countries.”
Despite the cozier relationship, ORF’s Pant said a free-trade agreement is unlikely within the short to medium term.
“Comments from each side of the political aisle show that there is no such thing as a real willingness to maneuver forward on free-trade agreements … That appears to be the bottleneck in the mean time,” he said.
Similarly, former ambassador Singh said “the U.S. can also be reluctant to do any such agreements till it has improved its infrastructure and enhanced the competitiveness of the American employee.”Â
Still, the U.S. and India have shown a willingness to enhance their trade relationship. Each parties agreed to finish six outstanding disputes on the World Trade Organization.
— CNBC’s Naman Tandon contributed to this report.
