"We are seeing great history being made right now and also a great chemistry." Narendra Modi, Houston 23 September 2019
"You (India) have never had a better friend as President as President Donald Trump." Donald Trump, Houston 23 September 2019
The "Howdy Modi" rally in Houston Sunday, was an occasion for India and the U.S. to showcase their rapidly warming relations – and for their leaders to indulge in some self-congratulatory PR.
Fifty thousand Indian Americans and Non-Resident (expatriate) Indians rapturously greeted the double bill of Indian Prime Minister Narendra Modi and U.S. President Donald Trump, signalling the growing heft of America's Indian diaspora.
The high-achieving nearly four million-strong Indian diaspora in the U.S. has been an important factor pulling the two countries closer. Although they've lived in the U.S. for a long time, it is the Modi government which has made a point of reaching out to overseas Indian communities in a way like never before – not least, for mutual economic and political support.
Clearly, neither leader wanted to sour the festive atmosphere by mentioning the issues on which the U.S. and India don't see eye to eye. They'll be left for the bilateral meeting scheduled for Wednesday in New York.
But despite the synchronized energy of the Houston mega-event, and the very real progress between the countries, the issues on which Trump and Modi disagree - on trade, Iran, the Taliban and Russian missile systems - aren't minor details at all. Each has the potential to explode into a serious challenge that neither leader can easily dismiss.
There are a host of factors bringing India and the U.S. closer. Geopolitically, the U.S. has much to gain by having close ties with a democratic India, even as it tightens the screws on Beijing, on both economic and military fronts.
First among those specific factor is defense, and military collaboration. In Houston, Trump celebrated the two countries' "even stronger security partnership."
The United States and India have of late engaged in in a host of bilateral and multilateral exercises of late. In terms of the defense industry, India is now importing a wide array of U.S.-made weaponry. Recently, it inducted eight U.S.-made AH-64E Apache attack helicopters.
New Delhi has already signed agreements like the Logistics Exchange Memorandum of Agreement with the U.S., unthinkable in an earlier era. The LEMOA allows U.S. and Indian defense personnel to use designated military bases in each country for refueling and replenishment.
There are also symbolic changes. India's increasingly military significance can be seen in the renaming of U.S. Pacific Command as the Indo-Pacific Command.
Back in February, in the immediate aftermath of the Pulwama terror attack - when a suicide bomber killed more than 40 Indian troopers – then then U.S. National Security Advisor, John Bolton assured his Indian counterpart that "the U.S. supports India’s right to self-defense."
In his speech at the Houston Rally, Trump said, to a standing ovation, that the United States is "committed to protecting innocent Indian Americans from the threat of radical Islamic terrorism." That phrase was perhaps also a signal of support for India in its ongoing conflict with Pakistan-backed Islamist militants.
From his side, President Trump backed India’s need for "border security," which some have parsed to mean Washington backing India's change of status for Kashmir – scrapping at the beginning of August the Indian constitution's Article 370, which gave special powers to the Muslim-majority border state.
That may indicate a change in Trump’s position; initially he had said that he was "ready to assist India and Pakistan over the Kashmir issue, if both sides ask for it," though he later backtracked after meeting Modi on the sidelines of the G7 Summit Meeting later that month. Tuesday, Trump is meeting with Pakistan's prime minister, Imran Khan, to discuss Kashmir and Afghanistan, along with other regional security issues.
Both leaders loudly touted their welcoming economic climate for the other country's investors. Modi mentioned the recent lowering of corporate tax rates and the relaxation of rules for foreign direct investment into India. Trump declared: "India has never invested in the U.S. like it is doing today, and I want to say it’s reciprocal because we’re doing the same thing in India."
India could prove a boon for struggling U.S. firms in specific areas – such as the aircraft industry. India is aircraft manufacturers and is poised to become the world’s second biggest aviation market (after China) by 2038, welcome news for companies like Boeing.
Despite the "Howdy Modi" rally's resounding success, there are several core areas where India and the U.S. need to sort out their differences.
To begin with, there are tensions on the trade front. Earlier, this year, the U.S. withdrew preferential trade treatment for India under the Generalized System of Preferences program, which allowed Indian exports (to the tune of approx $5.6 billion) to enter the U.S., duty free. New Delhi also imposed retaliatory tariffs on 28 items imported from the U.S.
The two nations have differences over Iran, though New Delhi has now ended imports of Iranian oil after the waivers granted by the U.S. to countries including India to import Iranian oil ended in early May this year.
India has invested a huge deal of money, prestige and resources in the Iranian port of Chabahar - its strategically critical gateway to Central Asia. Pakistan won't allow India overland transit rights through its territory, and thus Chabahar is essential – and India won't give up its investment there.
Trump’s penchant for cutting quick deals has New Delhi worried. It seems that Trump was all set to cut a deal with the Taliban in Afghanistan - even as the Taliban was staging raids and killing U.S. servicemen, among others.
Washington has expressed its displeasure with India: it has "serious concerns" about the long-term strategic implications of the purchase for U.S.-India ties, as a defense department spokesperson noted: "At a certain point, a strategic choice has to be made about partnerships and a strategic choice about what weapons systems and platforms a country is going to adopt." When Turkey gained delivery of the S400 systems this year, the Trump administration threatened to impose sanctions.
But the story in Houston was upbeat, and there's still plenty to satisfy both Modi and Trump. Last year, total bilateral trade reached $142 billion. U.S. energy supplies to India are increasing.
In public, both sides are reveling in a mutual appreciation society, with an economically and electorally beneficial twist. As Modi announced in Houston: "[Trump] often calls me a top negotiator, but he himself knows the art of the deal and I am learning from him."
India is big business - and leading up to an election year, Trump is more than aware of its attractions.
Dr. Rupakjyoti Borah is a Senior Research Fellow with the Tokyo-based Japan Forum for Strategic Studies. His latest book is "The Elephant and the Samurai: Why Japan Can Trust India?" Twitter: @rupakj
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