US enticed into creating an Indian Asia Bazaar
The recent virtual meeting with the US exemplifies that India does a great balancing act magically prioritising billions of business sops to mighty powers and making the US announce, “Energy imports from Russia are not banned and do not violate the US' sanctions amid the war in Ukraine."
The US means business and profits. The US President Joe Biden and Prime Minister Narendra Modi’s virtual meeting followed by the 2+2 summit between Indian Minister of External Affairs S. Jaishankar and Defence Minister Rajnath Singh in Washington with U.S. counterparts Antony Blinken and Lloyd Austin stressed on hefty $ 150 billion business agenda and expanding its deals in a stream for the last many years on nuclear, space and cyber security. The energy import from Russia is a minor irritant as it is a mere 2 per cent of Indian business that would be in the Russian ruble. India’s biz offers huge savings to the US arms producers who have raked in $5.436 billion profits for several trillion dollar sales since 2001 largely from the Indian subcontinent. The US is lured by the expanding new arms bazaar.
“India has concerns about the links between Russia and China,” the US press secretary explained after the 2+2 Defence Ministerial meeting between the two countries to the American
Press. In response to why India does not choose to opt for a harsh tone against Russia, US officials emphasised New Delhi's diplomatic approach to ensure regional security. The US official says, “India, of course, is facing a very tense situation along the Line of Actual Control. And when India sees the tight links between China and Russia, that’s obviously going to impact their thinking."
The US understands that even if its companies set up manufacturing units in India, as per its ‘make in India’ priority, they will repatriate huge profits and the 20 largest US arms manufacturers will continue to create employment at home. A country in economic crisis, particularly post-Afghanistan scenario, finds the Indian magic touch soothing even as European NATO allies remain cautious on the Ukraine war.
The gap between India and the US on the Ukraine issue was evident. The White House's expansive preamble spoke of close consultations on the consequences of the brutal war. Prime Minister Modi was unequivocal on the Bucha killings in Ukraine. The terse Indian preview outlines a broader agenda and exchange of views on developments in South Asia, the Indo-Pacific region, and global issues of mutual interest.
Both sides look forward to India’s co-hosting of the Indo-Pacific Armies Chiefs Conference (IPACC) and Indo-Pacific Armies Management Seminar (IPAMS) in 2023. Rajnath Singh visits the Pacific Command in Hawaii for greater cooperation. In support of the Indian military’s expanding operational reach and emerging opportunities for cooperation in the Indian Ocean and the wider region, the ministers welcomed regular bilateral logistics operations such as replenishments at sea, air-to-air, and ground-refuelling and committed to increasing such cooperation, including through the Logistics Exchange Memorandum of Agreement (LEMOA). Both sides also reaffirmed the importance of regular bilateral and multilateral exercises, including the Malabar exercise with the inclusion of Australia, the tri-service Tiger Triumph exercise, the multilateral Milan naval exercise, the bilateral Yudh Abhyas, and Vajra Prahar Army exercises, the bilateral COPE India air exercise, and Indian participation in Red Flag. They supported increasing the scope and complexity of these exercises and emphasised deepening cooperation between the Special Forces of both countries.
India has separately entered into a nuclear deal with Westinghouse and other firms committing to invest $ 30 billion in nuclear, space, and cyber security. They applauded the ongoing development of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite, planned for launch from India in 2023. The NISAR mission will collect data vital to tackling the climate crisis. The space ventures would have $5 billion or Rs. 38,000 crore investments. The ministers also looked forward to the convening of the next India-US Civil Space Joint Working Group in 2022.
Westinghouse is keen on setting up six nuclear power reactors worth Rs. 60,000 crore. It will also invest Rs. 10,000 crore for developing exportable mini-modular reactors. Under South Asia Regional Energy Partnership, US AID and private American firms to build Smart Grid Knowledge Centre for Rs. 3800 crores. The US would invest $2 billion or about Rs. 15,000 crore in the clean energy agenda. The US International Development Finance Corporation (DFC) will invest $500 million in debt servicing for an integrated solar photovoltaic plant in Tamil
Nadu under Modi’s international solar alliance with an annual capacity of 3.3 gigawatts. Bill Gates’ Breakthrough Energy Ventures-backed 1366 technologies plan to invest $300 million to set up a 2-gigawatt (GW) solar wafer and cell manufacturing facility in India under a productionlinked incentive (PLI) scheme. The DFC will also invest $350 million for multiple projects in India in financial services, health infrastructure, renewable energy, and food security. These businesses are projected to generate billions of dollars in profits for US firms.
Virtually, all US majors are making a beeline to India. The US aerospace company Lockheed Martin is open to setting up a maintenance, repair, and overhaul facility in India for F-21 to sweeten its bid for the 114 fighter aircraft for the Indian Air Force. Meanwhile, US-based Fisker Inc sets up its India headquarters in Hyderabad for electric vehicle manufacturing.
The summit is beneficial to the US as it proposes to invest large sums in multiple projects and many of these are very strategic as the US tries to capture the Asian market. It saves huge sums as India is cost-effective and provides easy access to the Asia market at a low cost. South Asia and Southeast Asian economies as per the US perspective have hefty foreign exchange reserves, stronger financial systems, and an unassailable place as the world’s manufacturing powerhouse. Their stock markets like those in the developed world have posted gains during the pandemic while other emerging regions lost.
This strategic interest makes the White House ignore India’s deals like oil and other purchases from Russia. It is as per their estimate not more than 2 per cent of overall Indian engagements. The way the US intends to proceed is expected to give it a wide leeway and boost a sagging economy. The Indian soft push helps the US gain in monetary terms and India develops a manufacturing Asian export bazaar in over a decade.
This strategic interest makes the White House ignore India’s deals like oil and other purchases from Russia. It is as per their estimate not more than 2 per cent of overall Indian engagements.