On 27th October 2020, India and US signed the critical Basic Exchange and Cooperation Agreement for Geospatial Cooperation, commonly known as BECA, to pave way for India’s access to critical military grade satellite data from US. The signing of BECA in the presence of India’s Defence Minister Rajnath Singh and External Affairs Minister S Jaishankar, and their US counterparts, namely the US Secretary of State Mike Pompeo and Defence Secretary Mark Asper, has led to the final conclusion of the triad of COMCASA, LEMOA and BECA that institutionalises the path for deepening of Indo-US strategic partnership and enhanced integrated coordination through sharing of critical intelligence inputs, better interoperability through secure communication mediums, based on mutual trust, shared principles, and well defined mutual goals and concerns.
The US Secretary of State and Defence Secretary were in India to attend the third edition of the Indo-US 2+2 Ministerial Dialogue that involves participation of defence and foreign ministers from both the countries. Over the last few years, the 2+2 Ministerial Dialogue has evolved into a structured mechanism to deepen the Indo-US strategic partnership through an institutional framework that not just works for taking forward the areas of convergence between India and US, but has also been extremely effective in terms of chiselling out differences or managing areas of divergence of views that the two countries may have on certain issues.
How the ‘2+2 Ministerial Dialogue’ Helped US get Better Understanding of India’s Concerns
Interestingly, in its very first edition, the 2+2 Ministerial Dialogue played an extremely constructive role in terms of US Administration understanding and appreciating the concerns of India related to American imposition of CAATSA (Countering American Adversaries Through Sanctions Act) on Russia and Iran, and its impact on India’s procurement of weapon systems from Russia as well as crude oil from Iran. Eventually India did buy S-400 and other key weapon systems from Russia and US did not impose sanctions on India in spite of CAATSA in place.
Likewise, on the issue of procurement of oil from Iran, India did get a temporary waiver from US to adjust its supply side dynamics so that sudden halt of procurement from Iran did not lead to supply side shocks in the Indian domestic market. One has to take note of the fact that India is perhaps one of the very few countries in the world that has been steadily improving its relationship with US even while maintaining the depth of its tried-and-trusted bonhomie with Russia, and this is happening at a time when the Moscow and Washington have not been having the best of the relationships in the recent times. This itself reflects the growing maturity of India’s foreign policy based on the basic framework of maintaining strategic autonomy, as well as evolution of Indo-US strategic partnership wherein both sides have developed the capacity of duly considering the concerns of each other, and approving concessions for the same. The 2+2 Ministerial Dialogue, one may say, has started playing the key role of a catalyst in chiselling out differences and making sure that areas of divergence are managed well so that they do not end up hampering progress in areas of convergence. The direct communication between key ministers that the 2+2 architecture provides, has also helped in developing a more empathetic and considerate view of each nation towards the other.
Further, the institutionalisation of the 2+2 Ministerial Dialogue as well as Washington’s understanding of India’s concerns are also reflections of the kind of importance that US is giving to India as a strategic partner in the Indo-pacific region. The same goes for India as well, which is now more willing to deepen relationship with US even while maintaining its strategic autonomy on certain issues.
Why the 2020 Edition of ‘2+2 Ministerial Dialogue’ was Markedly Different from the Previous Ones.
This year’s 2+2 Ministerial Dialogue took place against the backdrop of a tumultuous phase that the world has been going through over the last eight-nine months due to a combination of factors including a devastatingly contagious Covid pandemic, as well as rising tensions with China along South China Sea, Taiwan Strait and along the Line of Actual Control (LAC) region in Eastern Ladakh.
In this context it is important to mention that during this phase, it is for sure that the stature of India in the eyes of US has risen considerably because of a series of factors. This includes India’s massive military deployment, including heavy artillery, tanks and combat aircrafts, along the LAC, naval deployment over the Indian Ocean Region, stationing of IAF’s combat aircrafts, armed with harpoon anti-ship missiles, in the Andaman and Nicobar Islands, major surveillance operations being conducted by Indian Navy’s P8I Poseidons in Indian Ocean Region, as well as India’s deployment of some frontline ships in the South China Sea region. These deployments by India have been presumably in response to rising tensions with China along the LAC.
Further, it is also to be noted that India has been a pioneer over the last few months in terms of not just banning several Chinese mobile applications (for security reasons), in the aftermath of the Galwan clash, but has also been taking a series of critical steps towards decoupling of the Indian economy from over-dependence on Chinese supply chain for both finished products, critical intermediaries and components. India has started work towards developing a robust and seamless internal supply chain, and has given a massive impetus to recalibrate domestic manufacturing, which would be resilient from external shock waves and would significantly reduce over-dependence on any particular country for any product or ingredient in future. While on the face of it, Indian Government has maintained stoic silence and has not directly named China, its firm actions have definitely send a strong message to the rest of the world that surely has not gone unnoticed, be it in Beijing or Washington.
In this league, it is also important to mention that India’s decision to invite Australia for the Malabar Exercise is a key step signalling structural shift in India’s strategic decision making, especially in the realm of maritime security in the Indo-Pacific region. This too has been welcomed by US.
Therefore, against this backdrop, it is quite natural to conclude that this year’s meeting is happening against the backdrop of global uncertainty and geopolitical upheavals resulting in major churning across the world in trade relations, military equations, renewed interest of countries in domestic manufacturing, apprehensions on cyber and telecommunications network security and profound possibilities of global realignments, as nations strive to find new equilibriums through the tumultuous times. If one analyses the take-aways from this year’s 2+2 Dialogue and what to expect in future, then here are the following areas when one can expect positive developments in the times to come.
BECA Clears the Path for India’s Acquisition of Armed Drones from US
Just as the signing of COMCASA (Communication Compatibility and Security Agreement) allowed communication interoperability through secure channels and gave India access to cutting edge and sophisticated American communication equipment to facilitate high-end military grade encrypted communications for Indian armed forces, signing of BECA ensures that India gets access to military grade precision coordinates, geomagnetic, geophysical and geodetic data as well as nautical and aeronautical charts from US. All these act as major force multipliers and increases the effectivity of India’s weapons delivery platforms.
Further, signing of BECA was crucial before India could acquire armed drones from US since delivery of weapons by armed drones, as well as navigation of drones, depend considerably on geodetic and navigational data provided by satellites.
The Quad Factor
It is also important to note here that US has shown considerable interest in institutionalising Quad and elevate it from its present status of a strategic dialogue forum to a more structured security organisation that may eventually take the shape of a NATO type entity for taking care of mutual security and shared concerns of US, its allies and strategic partners, in the Indo-Pacific region.
While Quad as a strategic dialogue forum is now a reality and Australia’s inclusion in the Malabar Exercise is indicative enough that it would be more than just a forum for dialogue, whether India, Japan and Australia would readily reciprocate and agree to Washington’s aspiration to institutionalise Quad into an Asia centric multilateral security organisation, is to be seen in the times to come. In the realm of naval cooperation, joint patrolling and military exercises, joint development of both technology and resilient supply chain, as well as development of global infrastructure, Quad members are expected to play a major role in a synergised manner.
However, on the issue of a NATO like framework for Quad, the Asian partners of US may still take their own sweet time to allay their apprehensions, reservations and concerns, and would seek more clarity on the overall objectives before agreeing to making Quad the Asian version of NATO. An Asian NATO may not be impossible, but that idea, as per many analysts, is still premature and ahead of time.
Blue DoT Network and Why India is Expected to Join it Soon…
Quad nevertheless, is expected to act as a galvanising force in developing collaboration between the concerned countries in several areas beyond defence or maritime cooperation as well. One key area is that of infrastructure development. Incidentally, Blue Dot Network (BDN) was formally launched last year as a multi-stakeholder initiative for global infrastructure development with US, Japan and Australia being the key players in it.
While US is represented in BDN by the International Development Finance Corporation, Japan is represented by Japan Bank for International Cooperation and Australia is represented by Department of Foreign Affairs and Trade, respectively. Blue Dot Network has been pitched as a counter to the Belt and Road Initiative (BRI) of China and is aimed at creating a more robust, transparent, shared-interest based development of infrastructure by independent companies, which would develop infrastructure in various developing countries through the collaborative approach. At its core, BDN is aimed at creation of a multilateral framework for infrastructure development and financing, as against the BRI which is exclusively owned by Government of China.
Also, in BDN, by keeping an arm’s length distance from direct participation in projects, member countries of BDN make sure that the sovereign ownership of projects are never in jeopardy and that they remain with the host countries, which would develop infrastructure with participation from independent companies and the process would be certified by BDN. In other words BDN strives to make sure that infrastructure development happens in under-developed countries without any fear of debt-trap, coercion or loss of ownership of projects for the host countries, and with full benefits accruing to the host countries unlike in case of BRI, where it is often alleged that BRI projects have led to debt-trap for host countries.
The Joint Statement released after the 2+2 Ministerial Dialogue mentioned the following, ‘Recognizing the need to contain the build-up of sovereign debt in developing and low-income countries by ensuring responsible, transparent, and sustainable financing practices for both borrowers and creditors, the Ministers looked forward to exploring ways to cooperate under the Blue Dot Network’.
This gives a clear indication of the possibility of India joining Blue Dot Network in the times to come. With the three founding members of BDN being Australia, the US and Japan, all three also, incidentally, being Quad members, India joining the same would only be a logical conclusion in terms of strengthening the alliance framework of the Quad members.
In fact, for India, which did not join China’s Belt and Road Initiative (BRI), BDN gives a much more broader and multilateral framework to participate and leverage opportunities in the realm of developmental projects in developing or under-developed countries in a multitude of sectors. On the issue of India’s refusal to join BRI, India’s External Affairs Minister S Jaishankar had stated, “We have a longstanding position on that. It is connected with sovereign matters. That has not changed,”. Since BDN, unlike BRI, is not exclusively owned by any specific country, and is more of a multilateral consortium which keeps an arm’s length distance from projects, India perhaps would be more comfortable with BDN. This would also open a plethora of opportunities for Indian companies abroad.
The Resilient Supply Chain Initiative and US
In September this year, India, Australia and Japan jointly proposed the launch of Resilient Supply Chain Initiative (RSCI) that is aimed at creating a seamless supply chain management infrastructure which would, in future, strive to mitigate any kind of supply chain related disruptions that was experienced by many countries during the Covid pandemic. Also, RSCI is aimed at reducing disproportionate dependence on any particular country for components or finished products, along with making sure that the supply chain remains trustworthy even during adverse situations. The pandemic situation as well as rising tensions in the South China Sea or the along the LAC, is a clear vindication of how developing a balanced supply chain, devoid of over-dependence on a specific country, is so very crucial to tide over crisis situations.
In this respect it also important to remind that the three founding proponents of RSCI, namely Australia, India and Japan are Quad members as well. Therefore, for United States, which is keen to strengthen its Quad led Indo-Pacific grid, it would only be natural for US to join RSCI, in times to come, which would also give a major boost to the program.
The Journey So Far, and Future Potential of American Investments in PM Modi’s AatmaNirbhar Bharat Initiative
Over the last one decade or so, India acquired weapons systems worth nearly $18 billion, inclusive of recent orders, from US. This, among others, includes C-130J, P8I Poseidons, C-17 strategic transport aircrafts, Apache AH-64 combat helicopters, Chinook CH-47 tactical transport helicopters, M-777 ultra-light howitzers, Sikorsky MH-60 naval helicopters, Sig Sauer assault rifles and Harpoon anti-ship missiles to name a few. It is expected that in the immediate future India may acquire armed drones from US as well. While India and US also signed the nuclear deal in 2006, the formation of the Defence Trade and Technology Initiative (DTTI) has played a key role in streamlining the defence cooperation architecture in the realm of high-end defence technology sales and development.
In retrospect, a series of initiatives that boosted confidence of each on the other, resulted in US according India the status of a ‘major defence partner’ in 2016. US also facilitated India’s entry into the Missile Technology Control Regime or the MTCR club, the Wassenaar Arrangement, the Australia Group and granted India the Strategic Trade Authorisation (STA) level-1 status that significantly did away with most of the restrictions on sale of high-end technologies to India. Simultaneously, India started the process of signing key agreements with US such as LEMOA, COMCASA and finally BECA that completes the triad of Indo-US collaboration in strategic sharing of intelligence, military logistical facilities and sophisticated communication architecture.
During the present context of face-off between India and China along the LAC in Eastern Ladakh, it has been recently reported as to how US delivered to India over 11,000 sets of Extended Cold Weather Clothing Systems (ECWCS), part of which was from its own stock for its armed forces. This was LEMOA in action. Likewise, recently, a US Navy P8 maritime surveillance aircraft landed in Andaman for refuelling.
As has been stated by India’s Defence Minister that India and US are “leaving behind the traditional ‘buyer-seller’ relationship” and becoming collaborators, one is expected to witness, over the next few years, a considerable level of US investments in India’s emerging defence industrial complex. While there are already some major joint ventures in operations, such as the one between Lockheed Martin of US and Tata Advanced Systems, namely Tata Lockheed Martin Aerostructures Limited or the Tata Sikorsky Aerospace Limited, which play critical role in the global supply chain of Lockheed Martin, it is expected that with India pushing for more domestic manufacturing of weapons systems, which is also aimed at simultaneously building India’s own vibrant defence industrial complex, several major US defence companies would, in the near future, form joint ventures with their Indian counterparts, to bid for Indian defence contracts and for making them in India.
With India set to sign defence contracts worth around Rs 4 lakh crore over the next 6-7 years, to shore up its military preparedness, and with most of it is expected to be made in India, it would be a win-win situation for both India and US, to witness US investments in Indian aerospace and defence sector to manufacture a large spectrum of defence platforms and weapon systems, as well as components, for not just the Indian market but for the global market in which India is keen to be a key player.
Further, with Government of India ending monopoly of state owned entities in production of various defence products, and allowing India’s vibrant private sector to play a major role in domestic manufacturing of weapon systems, defence industrial sector is going to be a major contributor to Indian GDP in times to come. With a significant number of Indian companies having considerable proficiency in industrial scale manufacturing, it would not be difficult for global defence giants to find suitable Indian partners to bid for defence projects, especially when some of India’s major industrial conglomerates are showing keen interests in becoming serious players in the defence industrial sector.
Also, it is to be noted that the decision of Government of India to allow 74% FDI through the automatic route in defence sector can act as a major catalyst to kickstart foreign direct investment in India’s defence and aerospace sector. The reason being that the previous policy of 49% FDI that was allowed through the automatic route did not evince interest from several major global players because of their apprehensions related to transfer-of-technology to any Indian subsidiary where they would not be having majority stake. The policy decision to allow 74 % is expected to facilitate seamless transfer of technology and would help India become a major player in global defence manufacturing wherein not just the big players but India’s nimble footed MSME sector too is expected to play a key role, and eventually become part of the global defence industrial supply chain. It is also highly possible that India and US would join hands for development of 5G technologies and their applications for the Indian market. The tying up of India’s Reliance Industries with US-based Qualcomm for development of 5G solutions is a clear indication of that.
The Final Note
On a concluding note it can be stated that the trajectory of Indo-US relationship would only be going upward from here on. Progress in the realm of shared interests and shared concerns, would usher in a new era of collaborations and partnerships, not just in areas of defence but also in energy, infrastructure development, resilient supply chain development and general business endeavours, whose outcomes would not just have positive derivatives for both the countries and other Quad members, but also for the entire Indo-Pacific region as a whole.
Indeed, there is an element of continuity embedded in this relationship, which is expected to cruise through on a defined trajectory irrespective of outcome of electoral results in the ensuing US presidential elections. Needless to say, that both 2+2 Ministerial Dialogue and the evolution of Quad would continue to play major roles in deepening the Indo-US strategic partnership.
(The author is a public policy analyst, columnist and writes extensively on strategic and policy issues. The views expressed are his own)
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