Indo-American relations

From Wikipedia, the free encyclopedia

Indo-American relations
Flag of India   Flag of the United States
     India      United States

Indo-American relations refers to the bilateral relations between the United States of America and the Republic of India.

India, though being one of the founding members of the Non-Aligned Movement, developed a close relationship with the Soviet Union which plagued Indo-American relations throughout the Cold War. However, after the collapse of the Soviet Union, relations between the two countries have warmed considerably with the Bush Administration seeing India as its new ally in Asia.[1][2]

Contents

[edit] History

Swami Vivekananda in Chicago, 1893.
Swami Vivekananda in Chicago, 1893.

The historic relationship between India and the United states was very strong. One event is the visit of Swami Vivekananda who introduced Yoga and Vedanta to America. Vivekananda was the first known Hindu Sage to come to the West, where he introduced Eastern thought at the World's Parliament of Religions, in connection with the World's Fair in Chicago, in 1893. Here, his first lecture, which started with this line "Sisters and Brothers of America," [3] made the audience clap for two minutes just to the address, for prior to this seminal speech, the audience was always used to this opening address: "Ladies and Gentlemen". It was this speech that catapulted him to fame by his wide audiences in Chicago and then later everywhere else in America, including far-flung places such as Memphis, Boston, San Francisco, New York, Los Angeles, and St. Louis.

After Indian independence to the end of cold war, the relationship between the two nations have often been thorny. During 1961–1963 there was a promise to help set up a large steel mill in Bokaro that was withdrawn by the US. The 1965 and 1971 Indo-Pakistani wars did not help their relations. During the Cold War, the US asked for Pakistan’s help because India was seen to lean towards the Soviet Union. Later, when India disagreed to support the anti-Soviet operation in Afghanistan, it was left with few allies. Not until 1997 was there any effort to improve relations with the United States.

Soon after Atal Bihari Vajpayee became Indian Prime Minister, he authorized a nuclear weapons test in Pokhran, which got the immediate attention of the US. The Clinton administration and Vajpayee exchanged representatives to help build relations. In March 2000 , President Bill Clinton visited India. He had bilateral and economic discussions with Prime Minster Atal Bihari Vajpayee. Over the course of improved diplomatic relations with the Bush administration, India has agreed to allow close international monitoring of its nuclear weapons development while refusing to give up its current nuclear arsenal. India and the US have also greatly enhanced their economic ties.

During the 9-11 terrorist attacks on the US, President Bush chose India as the country to control and police the Indian Ocean sea-lanes from the Suez to Singapore. The tsunami that occurred in December 2004 saw the US and Indian navies to work together in search and rescue operations and to reconstruct the damaged lives and land. An Open Skies Agreement was made in April 2005. This helped enhance trade, tourism, and business by the increased number of flights. Air India purchased 68 US Boeing aircraft, which cost $8 billion.

Former US Secretary of Defense Donald Rumsfeld and US Secretary of State Condoleezza Rice have made recent visits to India as well. After Hurricane Katrina, India donated $5 million to the American Red Cross and sent 2 plane loads of relief supplies and materials to help. And on 1 March 2006, President Bush made another diplomatic visit to expand relations between India and the United States.

[edit] Economic relations

Economic assistance is also an important factor in the Indo-U.S. relationship.

The United States continues to be largest trading partner for India. India’s exports to the United States during 2003 totalled nearly $13.1 billion, led by export of apparel and household goods, diamonds, and jewellery. American exports to India were valued at $5 billion.[3]

The United States is also one of India’s largest direct investors. From the year 1991 to 2004, the stock of FDI inflow has increased from $11.3 million to $344.4 million, totaling $4132.8 million. This is a compound rate increase of 57.5% annually. Indian direct investments abroad were started in 1992. Indian corporations and registered partnership firms are allowed to invest in businesses up to 100% of their net worth. India’s largest outgoing investments are manufacturing, which account for 54.8% of the country’s foreign investments. The second largest are non-financial services (software development), which accounts for 35.4% of investments.

[edit] Military relations

Naval ships from India, US, Japan, Australia and Singapore during a naval exercise.
Naval ships from India, US, Japan, Australia and Singapore during a naval exercise.

The U.S.-India defense relationship derives from a common belief in freedom, democracy, and the rule of law, and seeks to advance shared security interests. These interests include maintaining security and stability, defeating terrorism and violent religious extremism, preventing the spread of weapons of mass destruction and associated materials, data, and technologies and protecting the free flow of commerce via land, air and sea lanes.

[edit] Economic relations

United States is India's largest trading partner. In 2007, United States exported US$17.24 billion worth goods to India and imported US$24.02 billion worth Indian goods.[4] Major items exported by India to the US include textiles, machinery, ITeS, gems and diamonds, chemicals, iron and steel products, coffee, tea and other edible food products. Major American items imported by India include aircraft, fertilizers, computer hardware, scrap metal and medical equipment.[5][6]

The United States is also India's largest investment partner with American direct investment of US$9 billion accounting for 9% of total foreign investment into India. Americans have made notable foreign investment in India's power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining industries.[7]

In July 2005, President George W. Bush and Indian Prime Minister Dr. Manmohan Singh created a new program called the Trade Policy Forum. It is run by a representative from each nation. The United States Trade Representative is Rob Portman and the Indian Commerce Secretary is Minister of Commerce Kamal Nath. The goal of the program is to increase bilateral trade which is a two-way trade deal and the flow of investments.

There are five main sub-divisions of the Trade Policy Forum which include: Agricultural Trade group- This group has three main objectives: agreeing on terms that will allow India to export mangoes to the United States, permitting India’s APEDA (Agricultural and Process Food Products Export Development Authority) to certify Indian products to the standards of the USDA, and executing regulation procedures for approving edible wax on fruit. Tariff and Non-Tariff Barriers group- Goals of the group include: agreeing that insecticides that are manufactures by United States companies can be sold throughout India. India had agreed to cut special regulations on trading carbonated drinks, many medicinal drugs, and lowering regulations on many imports that are not of agricultural nature. Both nations have agreed to discuss improved facets on the trade of Indian regulation requirements, jewelry, computer parts, motorcycles, fertilizer, and those tariffs that affect the American process of exporting boric acid.

The two nations have discussed matters such as those who wish to break into the accounting market, Indian companies gaining licenses for the telecommunications industry, and setting polices by the interaction of companies from both countries regarding new policies related to Indian media and broadcasting. This group has strived to exchange valuable information on recognizing different professional services offered by the two countries, discussing the movement and positioning of people in developing industries and assigning jobs to those people, continuation of talks in how India’s citizens can gain access into the market for financial servicing, and discussing the limitation of equities.

The two countries have had talks about the restriction of investments in industries such as financial services, insurance, and retail. Also, to take advantage of any initiatives in joint investments such as agricultural processing and the transportation industries. Both countries have decided to promote small business initiatives in both countries by allowing trade between them.

The majority of exports from the United States to India include: aviation equipment, engineering materials and machinery, instruments used in optical and medical sectors, fertilizers, and stones and metals.

Below are the percentages of traded items India to US increased by 21.12% to $6.94 billion.

  1. Diamonds & precious stones (25%)
  2. Textiles (29.01%)
  3. Iron & Steel (5.81%)
  4. Organic Chemicals (4.3%)
  5. Machinery (4.6%)
  6. Electrical Machinery (4.28%)

Major items of export from US to India: For the year 2006, figures are available up to the month of April. Merchandise exports from US to India increased by 20.09.26% to US $2.95 billion. Select major items with their percentage shares are given below

  1. Engineering goods & machinery (including electrical) (31.2%)
  2. Precious stones & metals (8.01%)
  3. Organic chemicals (4.98%)
  4. Optical instruments & equipment (7.33%)
  5. Aviation & aircraft ( 16.8%)

[edit] See also

[edit] Notes

  1. ^ [1]
  2. ^ [2]
  3. ^ Embassy of India
  4. ^ Foreign Trade Census
  5. ^ India - US Trade and Economic Relations
  6. ^ India (10/07)
  7. ^ India (10/07)

[edit] Sources


v • d • e
Flag of India International relations of the Republic of India
Bilateral
Emblem of India
International
organizations
United Nations · East Asian Summit · G4 · G8+5 · G20 · BRIC · RIC · IBSA · IAEA · IMF · ISO · Commonwealth of Nations · NAM · SAARC · UNESCO · WHO · WTO · SAEU · BIMSTEC
Treaties and
summits
Related topics