The winds of change have arrived with outcome of the US elections as the new administration shall assume charge of the world's largest economy. This could mean medium-term directional change in the geo-political world order, particularly for India, which has been increasingly engaged with successive US administrations in elevating ties on multiple fronts.
From being hyphenated earlier with Pakistan in its international policy, India's statute in the US outlook has significantly upended for multifarious reasons such as its increasing economic and global clout, opportunity for US' commercial interests in large Indian markets, countering China in its own backyard, etc. Let's review the state-of-play and the likely changes which would expectedly beset the ties between world's oldest and largest democracies.
Here are some key issues that deserve immediate attention. Both nations have a long list of grievances on the trade front, highlighting tariff and non-tariff barriers as coming in the way of multi-fold expansion in trade ties.
Simultaneously, both nations maintain an elevated priority for their domestic economies, particularly the US in Trump era and to some extent a mild retaliation by India.
The new environment is in any case expected to witness larger cooperation and boost in trade ties in key industries, such as pharmaceuticals, defence, heavy machinery, agriculture and technology.
However, a comprehensive trade relationship may remain elusive unless the discussions fructify on the Free Trade Agreement. Given that such agreement would go a long way in facilitating an open market for producers of both countries, bringing down costs and expanding trade partnerships, the change of guard will provide fresh energies for fostering a lasting partnership.
Upping cooperation at the multilateral level would be another expectation of India. Reviving the crumbling framework of the World Trade Organisation, restoring the Paris climate change accord, reform of the United Nations' Security Council, etc. are continuing priorities addressing which should not brook further delays.
Given its penchant for multilateral solutions, India can be expected to both partner and shine, in continuation of its ongoing stance. On an immediate basis, given the steering impact of COVID-19 on world-economies, the Marshall Plan of 2020 appears to be in order.
India should excitedly participate in a global revival stimulus as its impact is likely to stay for years and will further elevate India's international ties and standing.
Big tech, whose intrinsic involvement in the daily lives of one and all is unmissable, is likely to shape Indo-US ties. The success of India's attempt to implement a robust privacy law and data protection concerns has brought hinges upon cooperation by the US tech-giants, whose steering attempts to expand business presence in India is likely to dominate the US administration's discourse.
The likes of Amazon, Walmart, Google, Facebook, etc. and their relative positioning in the US can be expected to influence the policy drivers.
Similar is the situation with the impending divide over the issue of digital taxes; whether it be unilateral measures such as India's equalisation levy or US' 301 investigations, or the larger platform of OECD's ongoing Pillar One discussions, expect movement in the near future.
One must also be mindful that the Democrats in the US have traditionally pushed other nations to enhance human rights protection, minority rights, press-freedom, space for NGOs, etc.
One would hope that the burgeoning Indo-US partnership is not derailed by the new administration linking the trade-relation enhancement with allied issues, such as CAA, J&K, etc. which India perceives as integral to its domestic policy.
It would be a travesty if differences in the respective outlook on these aspects affect bilateral trade and investment relationships which have a significant headroom for growth.
The silver lining which keeps the enthusiasm high and positive outlook within the vicinity is both the historical accord and the accentuating priorities of the current times.
India has fared well under both dispensations, for illustration, the Bush-era Nuclear deal and Obama's support for India's NSG membership or the more-recent 2+2 dialogue and Basic Exchange and Cooperation Agreement.
Trade relations and strategic partnership of the two countries have, in the last two decades, received consistent bipartisan support from lawmakers on both sides.
With recent developments on health and security, such cooperation will merely add new dimensions considering that both sides are aligned on the need to address the increasing assertiveness of China viewed as a threat to rule-based global order.
At a strategic level, Quad initiative, which is in its infancy, may turn out to be the new NATO of the east, offering limitless potential for enhancement of relationship. We are confident that the two administrations realise the massive geo-political and geo-economic opportunities and invest in the partnership to join the journey towards mutual growth.
(Mukesh Butani & Tarun Jain are Partners at BMR Legal.)