Comment by Riaz Haq on June 8, 2023 at 10:33am

Chris Kay
@christopherkay
The more India tries to ramp up production, the more it depends on China for components and raw materials, report
@vrishtibeniwal

https://www.bloomberg.com/news/articles/2023-06-08/modi-s-make-in-i...

https://twitter.com/christopherkay/status/1666641446869544960?s=20

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Fun Zoo Toys is an Indian manufacturing success story. The maker of heart-shaped cushions and “Little Ganesha” dolls started out as a family business in 1979 and has grown to be one of the nation’s major manufacturers of fluffy toys.

Sales doubled after Prime Minister Narendra Modi’s Made-in-India push saw import duties on toys ramped up from 20% to 70% over three years to 2023. But that’s just half of the story: the production surge to meet those sales wouldn’t have been possible without raw materials like metallic pins, integrated circuits and LEDs imported from China.

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The Make in India dream keeps colliding with the Chinese reality

Read more at:
https://economictimes.indiatimes.com/news/economy/policy/the-make-i...

Last month, External Affairs Minister S. Jaishankar said Indian businesses need to stop looking for a "China fix", while terming the Make in India programme a strategic statement to spur the country's manufacturing.

Jaishankar was voicing the general sentiment that China's cheap imports de-industrialise India, take away millions of jobs and keep it dependent on China, therefore India's trade imbalance with China calls for more local manufacturing. India's trade gap with China widened to $83.2 billion in the last fiscal as against $72.91 billion in 2021-22. Exports to China dipped by about 28 per cent to $15.32 billion in 2022-23, while imports rose by 4.16 per cent to $98.51 billion in the last fiscal.

The solar dilemma
India's solar industry is an example of how India faces a complex challenge to fulfill its Make in India ambition. India might cut its import duties on solar panels to half, Reuters has reported recently. The renewable energy ministry has held talks with the finance ministry to approve its request to cut the import tax on solar panels from 40% to 20%,

India's nascent solar modules industry, which has been growing in the shelter of high tariffs, dread such a steep cut in import duties. The duty cut will deliver a blow to India's ambition of quickly expanding local production.

But local plants can’t keep up with rising demand and India must import solar modules to fill the gap. India is aiming to install 280 gigawatts of solar generation by 2030, compared to about 64 gigawatts now, as it overhauls its coal-dominated power grid, according to news agency Blomberg. That would require the addition of 27 gigawatts of capacity every year for the rest of the decade — more than double the volume installed last year.

While its local industry can't meet the rising demand, India must import more solar modules. But that imperils its nascent domestic industry which must grow to support the solar energy targets. “Such volatile changes in government policy show that businesses can’t be dependent on policy support,” Vinay Rustagi, MD at Bridge To India, a renewable energy consulting firm, told Bloomberg recently. “It’s a dampener for domestic manufacturing prospects.”

The China conundrum
Even when India tries to become more self-reliant by increasing local manufacturing capacity, it still has to depend on China for critical intermediate inputs. Take the case of Apple's iPhones made in India by Tata. Almost 90% components used for Apple phones by Tata are sourced from Mainland China, even as Apple looks to shift manufacturing to India, ET has reported recently. Items such as brackets, industrial glues, screws, mesh, pressure sensitive adhesives and metal parts are all shipped from China as per Apple’s instructions.

Comment by Riaz Haq on June 8, 2023 at 10:33am

The Make in India dream keeps colliding with the Chinese reality


The China conundrum
Even when India tries to become more self-reliant by increasing local manufacturing capacity, it still has to depend on China for critical intermediate inputs. Take the case of Apple's iPhones made in India by Tata. Almost 90% components used for Apple phones by Tata are sourced from Mainland China, even as Apple looks to shift manufacturing to India, ET has reported recently. Items such as brackets, industrial glues, screws, mesh, pressure sensitive adhesives and metal parts are all shipped from China as per Apple’s instructions.

Only Apple’s old-time vendors such as Foxconn, Pegatron and Wistron manufacture “end-to-end” phones in India. In FY23, India accounted for 5% of iPhone’s total global production and exported phones worth $5 billion, a near four-fold surge compared with a year ago.

Localisation of manufacturing, the domestic value addition, however, can't happen before manufacturing achieves critical mass. Till then, India will have to depend on China for imports of intermediate goods. If you add to it the import of finished items where India cannot compromise growth, such as in the solar sector, it indicates a heavy reliance on China. It means India's project to become self-reliant in manufacturing must depend on imports from China, at least initially.

Many electric two-wheeler companies cornering subsidies, aimed at promoting domestic manufacturing to meet the ambitious green mobility goals, from the government without fulfilling the localisation requirements is a case in point. Many parts are imported from China due to lack of sufficient local manufacturing.

What are the prospects?
Global supply chains are not easy to shift from countries where they got embedded in a vast local manufacturing ecosystem. The countries trying to do that must develop comparable ecosystems which can't happen overnight. Meanwhile, they will have to depend on imports from China. Tariffs alone can't help local industries.

But India's concerted push for self-reliance in manufacturing, powered by hefty production-linked incentives, is not without results. India's imports of electronic goods such as laptops, personal computers, integrated circuits and solar cells from China declined during 2022-23, according to a report by economic think tank Global Trade Research Initiative (GTRI). The fall in imports is notable in electronic items where the incentives scheme is operational. Import of medical equipment declined 13.6 per cent to $2.2 billion last fiscal year as compared to 2021-22. Similarly, import of solar cells, parts, diodes slumped 70.9 per cent to $1.9 billion in 2022-23.

However, import of lithium-ion batteries surged about 96 per cent to $2.2 billion last fiscal year. India's green mobility goals will only increase these imports steeply. For India to keep its growth steady, meet its energy goals and expand its manufacturing base, the Make in India must be supported by Make in China.

Read more at:
https://economictimes.indiatimes.com/news/economy/policy/the-make-i...

Comment by Riaz Haq on June 19, 2023 at 7:59am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states


As the former diplomat Dennis Kux wrote in India and the United States: Estranged Democracies, “The effort succeeded.” During President Dwight Eisenhower’s second term, Kux notes, “US assistance grew substantially, surging from about $400 million in 1957, to a record $822 million in 1960.” Eisenhower himself seemed committed to India’s democratic future. As the president stated in remarks at the opening of the World Agriculture Fair in New Delhi in December 1959, “Whatever strengthens India, my people are convinced, strengthens us, a sister republic dedicated to peace.” Six months later, Eisenhower signed a breakthrough multiyear deal with India to deliver $1.28 billion in food aid under the United States’ Food for Peace program, because India’s domestic farmers were routinely unable to meet the country’s food needs.

But if Kennedy and Eisenhower hoped that praising India would turn New Delhi into an ally, they were sorely mistaken. In 1954, Indian Prime Minister Jawaharlal Nehru had explicitly declared that his country would remain nonaligned in the Cold War, rankling Eisenhower. Kennedy, as president, hoped he could bring India closer by having Nehru visit Washington in 1961, but the trip changed nothing. The prime minister rebuffed all his efforts to bring India into the United States’ orbit.

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As Kux recounts, Kennedy’s Cold War successors were similarly frustrated by New Delhi. President Lyndon Johnson found Indian Prime Minister Indira Gandhi’s 1966 criticism of U.S. involvement in Vietnam to be particularly galling; his ambassador to India later recalled that the president’s reaction ranged “from the violent to the obscene.” Gandhi’s subsequent decision, in 1971, to conclude a “Friendship Treaty” with Moscow was later described by former U.S. Secretary of State Henry Kissinger as a “bombshell” that threw “a lighted match into a powder keg,” inflaming relations between India and Pakistan. And in January 1980, when India’s permanent ambassador to the United Nations effectively endorsed the Soviet Union’s invasion of Afghanistan, President Jimmy Carter was livid. Carter’s ambassador in New Delhi told Gandhi “what a devastating statement it had been from the American point of view and what a terrible backlash it had caused in the United States.”

Nonetheless, U.S. policymakers often praised India in the following decades, and policymakers continued to argue that India’s democratic principles made it a good partner. In his address to India’s Parliament in 2000, President Bill Clinton asserted that the strength of India’s democracy was the first of several important lessons it had taught the world. The administrations of Presidents George W. Bush and Barack Obama routinely employed the “oldest and largest democracies” formulation to describe Washington and New Delhi and their longtime ties. In a 2010 speech to the Indian Parliament, Obama repeatedly stressed the unique bond shared by “two strong democracies.” He then endorsed India’s effort to obtain a permanent seat on the UN Security Council, suggesting that cooperation between India and the United States on the council would strengthen “the foundations of democratic governance, not only at home but abroad.”

Comment by Riaz Haq on June 19, 2023 at 8:00am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states

New Delhi’s position on Ukraine certainly cuts against its espoused values. But it is far from India’s biggest democratic failure. Since winning two sweeping national victories, one in 2014 and another in 2019, Modi’s Bharatiya Janata Party has made India’s own attachment to liberalism more and more dubious. The BJP has hollowed out institutions that can check the prime minister’s behavior, including by politicizing India’s civilian bureaucracy and turning its Parliament into a rubber stamp for the party’s priorities. Modi also tolerates no criticism in the media, academia, or civil society. The government, for example, imposed an outright ban on a 2023 BBC documentary that detailed Modi’s role in the state of Gujarat’s deadly 2002 communal riots. The organizations that compile the three biggest rankings of democracy across the world—the V-Dem (Varieties of Democracy) Institute, Freedom House, and the Economist Intelligence Unit—have all downgraded India’s score since Modi took office.

New Delhi’s democratic failings extend beyond eliminating checks and balances. The BJP is deeply intertwined with the Rashtriya Swayamsevak Sangh, an organization that aims to give India an exclusively Hindu identity (and to which Modi belongs). Created in 1925, the RSS was modeled on interwar European fascist groups and charged with promoting, in the words of one founder, “the military regeneration of the Hindus.” This goal was directly opposed by Mohandas Gandhi and Nehru, who championed freedom of religion, celebrated diversity, and defended minority rights. That is why a radicalized Hindu nationalist and RSS member assassinated Gandhi in 1948.

India’s autocratic turn creates many problems for the United States. One is that it simply makes New Delhi less trustworthy. Democratically accountable leaders need to justify and defend foreign policies to their own citizens, which makes their decisions more transparent and predictable. Authoritarian decisions, by contrast, are far harder to predict. In addition, the more ethnonationalist New Delhi becomes, the less secure India will be. India is home to roughly 200 million Muslims—almost the size of Pakistan’s entire population—and it has an extensive history of communal violence. By repressing its minorities, India risks its tenuous stability in the near term and mounting and debilitating violence in the long term. And an India consumed with internal security challenges will have fewer resources, less bandwidth for foreign policy, and less legitimacy to play a constructive role beyond its borders.

India’s Hindu nationalism at home also leads it to promote illiberal aims abroad. Hindu nationalists believe that one of their top foreign policy achievements has been mobilizing overseas RSS-affiliated groups in the Indian diaspora to lobby other capitals, including Washington, to support BJP initiatives. Hindu nationalists also believe that India should be a sprawling, civilizational power, and many of them say they want to create Akhand Bharat—a greater “Undivided India”—in which New Delhi would build a “cultural confederation” of territory stretching from Afghanistan to Myanmar and Sri Lanka to Tibet. In 2022, for example, the RSS chief Mohan Bhagwat claimed that this could be a reality in as little as ten to 15 years. His statements raised questions about what a Hindu cultural confederation would actually mean, and they have prompted at least some regional consternation about whether India’s drive for leadership will be as peaceful as the country claims.

Comment by Riaz Haq on June 19, 2023 at 8:00am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states


Despite the obvious evidence of the BJP’s illiberalism, top Biden administration officials have avoided publicly criticizing the Modi government. Instead, they have brushed aside concerns by declaring, as Blinken did in 2021, that every democracy is an imperfect “work in progress.” Presumably, that is because Biden believes that expressing any concerns about Indian policies would cause too much harm to the relationship.

This fear is not baseless. Like most countries, India does not like to be criticized, so an honest airing of grievances would not go down well. But the current, disingenuous approach has its own price. Soft-pedaling concerns about India’s authoritarian slide, for example, weakens Washington’s ability to champion democracy around the world. In fact, it might actively encourage democratic backsliding. India is no garden-variety struggling democracy: it is the world’s most populous country and a leader in the global South. When Modi uses his association with Washington to burnish his democratic credentials and even to strengthen his self-serving narrative that Hindu India is “the mother of democracy” (as he declared during Washington’s 2023 Summit for Democracy), it sets back liberalism everywhere.

Praising India’s democracy also makes it hard for Biden to build the domestic political alliances he needs to cooperate with New Delhi on security. Many powerful U.S. constituencies, including evangelical Christian groups, are deeply concerned about India’s poor treatment of minorities, its crackdown on religious freedoms, and its stifling of the press. The New York Times and The Washington Post, along with other top U.S. media outlets, run stories and columns on these issues so frequently that BJP leaders have gone out of their way to label the publications “anti-Indian.” And influential figures in Washington are expressing growing alarm about India’s illiberal policies. In March 2021, for example, Senate Foreign Relations Committee Chair Bob Menendez wrote a letter to Secretary of Defense Lloyd Austin, asking that he use his upcoming India trip to “make clear that in all areas, including security cooperation, the U.S.-India partnership must rest on adherence to democratic values.” If Biden continues to emphasize principles in his pitch for better relations, his calls could face mounting opposition.

ENEMY OF MY ENEMY
India’s turn away from democracy is deeply unfortunate. But New Delhi is still an invaluable partner for Washington. In addition to being the world’s most populous state, India boasts the world’s fifth-largest economy, the world’s second-largest military, and a significant cadre of highly educated scientists and engineers. It has a large arsenal of nuclear weapons. And like the United States, India is deeply concerned about China, which it sees as a dangerous power intent on challenging the regional and global order. In a way, now may be the best moment for the United States to cooperate with India. The question is how far Washington should go.

In many cases, the decision to help India is easy. When China began encroaching on Indian territory along the Chinese-Indian border, prompting deadly clashes between the two countries’ militaries in 2020, Washington rightfully provided New Delhi with urgently needed cold-weather gear and intelligence on Chinese positions. It also expedited already planned deliveries of surveillance drones. Since then, U.S. officials have correctly concluded that they can have far more candid discussions with India’s leaders than they have had in the past about defense cooperation, both on land and at sea. They hope that the threat from China, combined with Russia’s disastrous invasion of Ukraine, presents Washington with a once-in-a-generation opportunity to decisively (if not immediately) get New Delhi to shift its heavy reliance on Russian-made military gear to U.S. systems.

Comment by Riaz Haq on June 19, 2023 at 8:01am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states



Greater U.S.-Indian alignment on China also means the two states could cooperate on certain kinds of technology. Washington, for example, could work with New Delhi to develop alternatives to Chinese-built information and telecommunications infrastructure as a means to compete in a global industry that Beijing has threatened to dominate. The United States could also speed up its efforts to diversify essential industrial inputs away from China and toward India. New Delhi, in turn, would benefit from new economic investments.

But Washington must be careful about the ways it deals with New Delhi. It must remain keenly aware that India’s desire to work with the United States is born of circumstance, not conviction, and could quickly disappear. New Delhi, after all, spent most of the post–Cold War years vacillating about what role it should play between Beijing and Washington, and it often signed on to the former’s initiatives. Even after the border clashes, China and India have roughly the same volume of trade as India and the United States have. New Delhi is still part of the Beijing-founded Shanghai Cooperation Organization. And many Indian policymakers and analysts would much prefer a multipolar world in which India is free to navigate flexible relationships with other great powers to a world led by the United States or defined by a new cold war between Beijing and Washington—a world in which New Delhi must take sides. One of New Delhi’s greatest fears is being indefinitely consigned to the geopolitical sidelines.

For U.S. officials, then, cooperation with India must be tightly targeted to countering immediate threats posed by China. It is fine, for example, for the United States to conduct joint military exercises with India near the Chinese border, as the two states did in November 2022. It is also fine for Washington to strike transactional deals that obviously advance U.S. interests, such as a deal that gives the United States access to Indian seaports in exchange for finite technology transfers or additional intelligence. But when U.S. policies do not clearly enhance U.S.-Indian cooperation with respect to China, they should not receive the benefit of the doubt. The United States should think twice, for example, before approving a proposal General Electric put forward earlier this year to co-produce and transfer U.S. technology to India for advanced fighter jet engines. Washington may benefit from a better Indian military in the short term, but the GE deal could strengthen India’s indigenous defense industry for decades, which might not serve U.S. interests in the long term.

U.S. officials must understand that, deep down, India is not an ally. Its relationship to the United States is fundamentally unlike that of, say, a NATO member. And India will never aspire to that sort of alliance. For this reason, U.S. officials should not frame their agreements with India as the building blocks of a deeper relationship. The country is not a candidate for initiatives such as the AUKUS deal among Australia, the United Kingdom, and the United States (which will help Australia develop nuclear submarine technologies) because such deals entail sharing important security vulnerabilities that only sturdy liberal democracies—ones with broadly shared values and aspirations—can safely exchange. India’s uncertain commitment to democratic principles is also why Washington will never be able to share intelligence with New Delhi in the way that it does with its so-called Five Eyes partners: Australia, Canada, New Zealand, and the United Kingdom.

Comment by Riaz Haq on June 19, 2023 at 8:02am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states



In fact, Washington should qualify its support for greater Indian participation in the international organizations to which New Delhi already belongs. India’s voice is essential on the world stage, especially because of its vast and diverse society. But considering how often India and the United States diverge on important issues, it is not a bad thing that no one has taken up Obama’s proposal to offer India a permanent seat on the UN Security Council. Washington should similarly temper its expectations for the Quad—the Quadrilateral Security Dialogue, among Australia, India, Japan, and the United States. The White House clearly hopes that the Quad can be an Indo-Pacific league of liberal democracies. But given India’s identity, it simply cannot. What the Quad can do is better deter Chinese aggression in the region, and it should dedicate itself to that task.

TRUTH BE TOLD
As the Biden administration pivots away from seeking an imaginary relationship based on values to acknowledging a real one based on mutual interests, it must be forthright. The administration ought to explain to Indian and U.S. audiences alike that shared concerns about China and a wide array of other common interests create strong and constructive incentives for cooperation; there is much that the two sides can do together. But Washington needs to cease endorsing Modi’s BJP. It must stop altruistically subsidizing the rise of another illiberal Asian giant. And the Indian government should know that its domestic political decisions have the potential to complicate and endanger relations with Washington. Indian voters should know that, too.

The Biden administration should also write and publish more reports that accurately depict India’s record on human rights, freedoms, and democratic practices. Such analysis should then become required reading for U.S. leaders, including Pentagon policymakers and uniformed officers, who need to understand how undemocratic the world’s largest democracy is. These reports must be scrupulously accurate, because they will certainly draw fire from Indian diplomats. But Biden should not worry that U.S. criticism will derail cooperation. Unlike Chinese military activities, a critical report from the U.S. Commission on International Religious Freedom does not materially threaten New Delhi. If India and the United States are going to be strong partners, both sides need to learn how to navigate serious disagreements without sweeping them under the rug, even if that means suffering some unpleasantness along the way. U.S. officials can unapologetically explain the American perspective without being undiplomatic, just as their Indian counterparts frequently do.

Many U.S. opponents of the Modi government would go even further, arguing that criticism of India’s democratic shortcomings should be bolstered by active U.S. government initiatives—such as giving material support to Indian rights groups. Some critics have even encouraged Washington to withhold U.S. security cooperation unless India rolls back recent autocratic measures. But New Delhi is likely to balk at conditional defense ties, and pro-democracy investments will not be effective. India is almost unimaginably enormous and complicated, making it nearly impervious to outside political influence. As a postcolonial state, it is quite practiced at resisting, ignoring, or mitigating external interference. Better, then, to leave the task of strengthening India’s democracy to the Indians themselves.

Comment by Riaz Haq on June 19, 2023 at 8:02am

Washington and New Delhi Share Interests, Not Values
By Daniel Markey

https://www.foreignaffairs.com/india/markey-modi-biden-united-states

For now, that means the United States will have to deal with an unsavory government in New Delhi. But for Washington, this is nothing new. The United States has spent years cooperating with regimes it dislikes in order to bolster its security. At one point, it even worked with the country New Delhi and Washington are now trying to outcompete. The Nixon administration’s 1972 opening to China was intended to exploit the differences between Beijing and Moscow to deliver a decisive advantage to the United States in the Cold War. It succeeded: President Richard Nixon’s gambit deepened splits in the global communist movement, helped tie down Soviet army divisions along the border with China, and provided Washington with additional leverage over Moscow.

What followed, however, is much more controversial. Nixon’s opening eventually led to a deluge of U.S. investment in China’s economy and cooperation across many sectors—including, at times, defense and security. The United States’ contributions helped China quickly become the world’s second-largest economy. Washington instead should have had a greater appreciation for the ways in which U.S. and Chinese interests would most likely diverge as China’s power grew. American policymakers could have then lowered their expectations, narrowed the scope of official cooperation, and even ruled out certain types of commerce. In hindsight, it is clear they could have partnered with Beijing to contain Moscow without contributing so much to the rise of a peer competitor.

India, of course, is not China, and it may never pose the same sort of challenge. And New Delhi’s authoritarian turn has not been total. Despite the government’s best efforts, India still has free (if not fair) elections and a vocal domestic opposition. Americans and Indians can, and should, hold out hope that India’s diverse society will remake India into a liberal democracy more fundamentally aligned with the ideals that Washington seeks to uphold.

That, however, is not where India is today. The country is instead led by an ethnonationalist who tolerates little dissent. It is in thrall to an illiberal and increasingly undemocratic party, and that party’s grip on politics is only becoming firmer. Unless that changes, the United States will not be able to treat India as it treats Japan, South Korea, and NATO allies in Europe. It must instead treat India as it treats Jordan, Vietnam, and any number of other illiberal partners. It must, in other words, cooperate with India on the reality of shared interests, not on the hope of shared values.

Comment by Riaz Haq on June 20, 2023 at 8:33pm

India, US need to refresh ties in new world of ‘frenemies’, says Jaishankar | Latest News India

https://www.hindustantimes.com/india-news/india-us-need-to-refresh-...

External Affairs Minister S Jaishankar on Tuesday said India and the United States will need to “refresh” ties as the old globalized world order built after 1945 gives way to an emerging arrangement marked by a “proliferation of frenemies”, friends who differ and competitors who cooperate.

The minister said the emerging order will be “multipolar” and “intensely competitive and driven by balance of power” instead of one based on “shared endeavours” and “collective security”. Competing powers will work together based on “convergence” of interests, not “congruence”.

The new era, the minister said, “calls for both India and the United States to press the refresh button of their relationship as the really important relationships in the world are the less transactional ones. They are driven by global assessments and are based on strengthening each other”.

Jaishankar did not explain what about the current state of India-US ties had prompted his call for hitting the refresh button, but he went on to express confidence in the state of the relationship.



“Recent events in our ties confirm that the deep convergences developed over the last two decades are now in full play. I am confident that a strategic appreciation of the emerging global landscape would only bring us closer.”



India’s relations with the US have been more transactional on President Donald Trump’s watch than in the past, as is true for all the other US relations.

The two sides are negotiating a trade deal to end current and outstanding issues going back by decades. They have also sought to manage competing interests regarding India’s traditional ties with Russia and Iran, one an arch-rival and the other a sworn enemy.

Jaishankar, who is highly regarded as a strategic thinker and is well known in US academia and policy circles, was speaking at the Center for Strategic and International Studies, a leading US think-tank, on “Preparing for a Different Era”, and his vision of a changing world order.

The foreign minister has had a series of think-tank events at which he has spoken expansively on all aspects of international relations with India in the middle — the US, Europe, China, the Gulf and the neighborhood. The host of one of them — not the CSIS — remarked the minister’s pronouncements could be the start of “the Jaishankar Doctrine”.

Comment by Riaz Haq on June 29, 2023 at 8:43pm

US-India relations: A test case for the Sullivan Doctrine
BY NICHOLAS SARGEN, OPINION CONTRIBUTOR - 06/29/23

https://thehill.com/opinion/international/4073792-us-india-relation...

One challenge is that the two countries do not agree on some key international economic issues. For example, India’s minister for power and renewable energy, Raj Kumar Singh, has criticized the Biden administration’s climate initiative, the Inflation Reduction Act, on grounds that it disadvantages developing countries that are unable to subsidize their own transition to green energy. India has also opted out of the Indo-Pacific Economic Framework’s trade pillar, which is the Biden administration’s signature trade initiative.

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the (US Foreign Relations) council also maintains that the relationship needs to be reciprocal and that the U.S. should press Modi to adhere to democratic principles amid signs of backsliding. In this regard, it views the outcome of Modi’s visit as a litmus test for a “values-based U.S. trade policy.”

India also poses a test for how National Security Adviser Jake Sullivan’s vision of international trade might be implemented. In an April speech at the Brookings Institution, Sullivan argued that the “Washington consensus” that favored free trade and globalization should be replaced with a new consensus that “invests in the sources of our own economic and technological strength.”

For Financial Times journalist Edward Luce, however, Sullivan’s vision represents a loss of faith in economic multilateralism. He observes: “The old consensus was a positive sum game; if one country gets richer others did too. The new one is zero sum; one country’s growth comes at the expense of another’s.”

My take is that the rejection of free trade in favor of industrial policies dismisses the achievements from the mid-1980s through 2007 when globalization served as a launch pad for developing economies to emerge from poverty via export-led growth and increased foreign investment.

President Biden’s overture to Modi hopefully will mark a new phase in deepening and broadening U.S.-India relations. While India has a long-standing non-aligned status, Russia’s overtures to China should encourage India to move closer to the U.S. when U.S. multinationals seek to diversify their supply chains away from China. As The Wall Street Journal notes, big deals for jet engines and chips during Modi’s visit are a promising start.

For the ties to be enduring, however, the mutual political and economic interests of the two countries must continue to expand as India becomes more prominent globally.

Nicholas Sargen, Ph.D., is an economic consultant for Fort Washington Investment Advisors and is affiliated with the University of Virginia’s Darden School of Business. He has authored three books, including “Global Shocks: An Investment Guide for Turbulent Markets.”

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