The Americans have apparently done their home work in details before coming over to India. They have identified the areas for collaboration and exactly what to work for.

Vice president Vance has pointedly identified areas where India and USA could work together to achieve greater results. He particularly, mentioned that India might remove some of the non-tariff barriers which prevent entry of US products into India. The non-tariff barriers are a major obstacle to freer flow of merchandise trade.

Besides, USA has identified several areas for greater “collaboration” the two countries, including joint defence production, in the energy sector, in high technology, pharmaceuticals and in setting up data centres. These are the future industries for the world and countries are vying with each to establish themselves in these industries.

Vance and the US background papers indicate already the intense research work undertaken to clearly delineate the areas of joint work. These go far beyond only merchandise trade between the two countries and collaboration —the word emphasised by Vance— is the key to future relations.

Vice president Vance was particularly emphatic that India should buy more of US defence products and then “collaborate” in areas of defence production. Vance claimed the US defence products were the “best in the class” and these should help India better its “people and the country”. USA is well aware of India’s large purchases of defence items from Russia.

In the context of the on-going war in Ukraine, Russia is often not able to maintain its supplies of critical defence items and thus India met serious drawbacks. Diversified defence procurement could help India overcome strategic shortfalls in defence supply chains.

Vance particularly has mentioned Indian purchase of the fifth generation F-35 aircraft which is one of the most lethal weapons of war. Until now, there have been serious restrictions on sale of these F-35s. It looks as though the United States is seeking to push these war planes to India. Indian purchases of aircraft could run into billions of dollars.

Besides, in veiled references to Chinese practices of unfair trade, Vance said that joint collaboration between USA and India could help overcome such restrictive and unfair practices which stall the market entry of genuine players. United States is talking of Indo-American collaboration in energy industry and exploitation of India ample reserves of natural gas and oil ii its offshore areas.

America maintains that technologies wee available for a more energy friendly war of growth. Vance pointed out that USA has the capability and willingness to collaborate with India to achieve such energy efficient modes of production. These kind of collaboration would mean a faster growth with less consumption of energy products.

Additionally, United States appears to be willing to work with India in the areas of pharmaceuticals and chemicals. So far, the pharmaceutical products have not been brought under the purview of the reciprocal tariff regime. However, if these are also brought under the reciprocal tariff regime, India could be grievously hurt.

India has a large export of Pharma products to United States. These are mainly from the Indian industry, but produced mainly by converting Chinese basic pharmaceutical inputs — the APIs. Indian Pharma industry could get crippled if the Chinese inputs are restricted to India.

Hence, there is a window of opportunity for India to collaborate with the United States for setting up a base of basic pharmaceutical inputs for the production of drugs. This could usher in a new age for the Indian drugs industry.

In this area at least, India must remain wary. China has warned that any country working in collaboration with USA to thwart Chinese trade and economic activities, would be face severe restrictions and sanctions from China.

One possibility could be that China could impose restrictions on supply of critical input materials to Indian industry meant for the American markets which can help USA overcome temporary shortages.

In the current trade dynamics of the world, India is emerging as a key and critical player among rival blocs — US led countries and the China led ones. In between EU is wavering between its traditional ally, USA, and its present predicament with American stance. Hence, India, being aligned to USA, along with its old links with Russia, could become a key banking factor.

India should realise its destiny by grabbing the opportunities it is seeing to establish itself in the most advantageous position for the future. Until now, India had at best some nodding acquaintance with the United States. There are opportunities on the way, which could transform India’s position strikingly on a different plane. The first round of talks could be the beginning.

If the current momentum of conversation between the two countries are taken forward, the current trade talks could be widened into a dialogue for greater economic co-operation between the two countries. (IPA Service)