22-February-2025-Special-Article

INDIA-US COMPACT INITIATIVE: STRENGTHENING BILATERAL TIES

The US-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century was launched to enhance cooperation between the two nations in defense, trade, technology, and regional security. This initiative aims to deepen strategic, economic, and technological ties, ensuring long-term collaboration between India and the US.

Key Aspects of the India-US COMPACT Initiative

Defense Cooperation

• A new 10-year Framework (2025-2035) for the US-India Major Defense Partnership will be signed.
• Expansion of defense sales and co-production, particularly Javelin Anti-Tank Guided Missiles.
• Increased joint military exercises like Tiger Triumph.
• Implementation of the Reciprocal Defense Procurement (RDP) Agreement for smoother defense trade.
• Establishment of the Autonomous Systems Industry Alliance (ASIA) to boost AI-based autonomous defense technology.

Trade and Investment Growth

• Launch of ‘Mission 500’, targeting USD 500 billion bilateral trade by 2030.
• Negotiations for a Bilateral Trade Agreement (BTA) to facilitate trade.
• Reduction of tariff barriers on beverages, vehicles, and ICT products.
• Greater market access for Indian agricultural goods and industrial exports in the US.

Energy Security

• Strengthening energy trade, including oil, gas, and nuclear cooperation.
• US support for India’s membership in the International Energy Agency (IEA).

Technology and Innovation

• Rebranding of iCET (Initiative on Critical and Emerging Technologies) as TRUST (Transforming the Relationship Utilizing Strategic Technology).
• Focus on semiconductors, quantum computing, and AI advancements.
• Expansion of critical mineral supply chains, including lithium and rare earth metals.
• Strengthened space cooperation, featuring:

• NASA-ISRO collaborations.
• Indian astronaut’s participation in the International Space Station (ISS) mission.
• Launch of NISAR (NASA-ISRO Synthetic Aperture Radar) satellite.

Regional and Multilateral Cooperation

• Strengthening Quad partnerships (India, US, Japan, Australia).
• Enhancing counterterrorism and Indo-Pacific security.
• Advancing connectivity projects such as the India-Middle East-Europe Corridor.

People-to-People Engagement

• Facilitating academic and workforce mobility.
• Easing legal migration policies.
• Enhancing law enforcement collaboration to counter human trafficking and transnational crime.

India-US Relations:

Trade and Investment

• India-US relations are now a “global strategic partnership”.
• In 2024, bilateral trade stood at USD 129.2 billion.

• India’s exports to the US: USD 87.4 billion.
• Imports from the US: USD 41.8 billion.
• Trade surplus in India’s favor: USD 45.7 billion.

• US is India’s third-largest investor, with FDI inflows of USD 65.19 billion (2000-2024).

International Cooperation

• Collaboration in multilateral forums like the UN, G20, ASEAN, WTO, I2U2, and Indo-Pacific Economic Framework for Prosperity (IPEF).

Defense Collaboration

• India and the US signed the 2005 Defense Framework, renewed in 2015.
• India is recognized as a Major Defense Partner and has Strategic Trade Authorization-1 (STA-1) status, easing access to US defense technology.
• Joint military exercises include:

• VAJRA PRAHAR (Army).
• SALVEX (Navy).
• Cope India (Air Force).
• Malabar Exercise (Quadrilateral Naval Exercise).

People-to-People Ties

• The Indian-American community (3.5 million people) plays a crucial role in strengthening bilateral relations.

Challenges in India-US Relations

Trade Barriers

• High US tariffs on Indian exports impact trade.
• Lack of a Free Trade Agreement (FTA) restricts market access and trade expansion.
• Achieving the USD 500 billion trade target may require India to increase imports, potentially reducing its trade surplus.

Immigration Policies

• India agreed to repatriate undocumented Indian immigrants (220,000-700,000), aligning with US policies.
• No concrete commitments on H-1B visas, crucial for Indian IT professionals.

Technology Transfer and Data Sovereignty

• US restrictions on AI, drones, and missile technology hinder India’s defense advancements.
• Differences on data localization laws:

• India prioritizes national security and data sovereignty.
• The US argues that such laws hurt American tech companies.

Geopolitical Differences

• Despite US support for India’s permanent seat at the UNSC, differences remain on global governance.
• US pressures India to reduce ties with Russia, but India maintains a neutral stance.
• India’s defense and energy partnerships with Russia conflict with US efforts to isolate Moscow.

Way Forward

Strengthening Economic Cooperation

• Finalize the Bilateral Trade Agreement (BTA) to ease trade barriers and enhance investment flows.
• Improve supply chain integration in semiconductors and pharmaceuticals.
• Align regulatory standards with global norms to boost investor confidence.

Enhancing Workforce Mobility

• Push for higher H-1B visa quotas and faster visa processing for Indian professionals.
• Promote mutual recognition of professional qualifications to boost employment opportunities.

Balancing Data Governance

• Consider relaxing certain data localization norms while ensuring national security.
• Encourage US tech investments in India’s digital infrastructure.
• Develop joint cybersecurity frameworks to build trust in digital governance.

Diplomatic and Strategic Engagement

• Strengthen collaboration in multilateral forums like Quad and IPEF.
• Leverage India’s role in the Global South to address global challenges.
• Maintain a balanced approach in geopolitical alignments, ensuring both strategic autonomy and enhanced US-India cooperation.

Conclusion

The India-US COMPACT Initiative represents a major step forward in bilateral relations. By addressing trade, defense, technology, and diplomatic challenges, both nations can enhance their strategic partnership. Strengthening economic ties, advancing technological cooperation, and maintaining diplomatic flexibility will be key to deepening India-US relations in the years ahead.

Mains Question:

1. Discuss the significance of the India-US COMPACT Initiative in strengthening bilateral relations, highlighting its impact on defense, trade, technology, and regional cooperation. (150 WORDS)