Approach

Introduction: Highlight the shared interests and values between India and US.

Body: Discuss the Economic, Strategic aspects along with the challenges.

Conclusion: Give a balanced holistic conclusion.

Answer:

Rooted in shared democratic values and common interests, India and the US share a multifaceted relationship and are hailed as a "defining relationship" of the 21st century. The strong bipartisan support is evident in the invitation extended to Prime Minister Modi by both chambers of the US Congress. This invitation grants him the privilege of addressing a joint meeting of Congress for the second time, a distinction previously bestowed to Winston Churchill, Nelson Mandela and Benjamin Netanyahu

Economic relation:

1. Trade and Investment: Bilateral trade has expanded exponentially, reaching nearly $191 billion making the US India’s largest trading partner. For the US, India is the ninth largest trading partner.
2. Foreign Direct Investment (FDI):  American companies have invested around $60 billion in India in sectors ranging from manufacturing to telecommunications and consumer goods to aerospace. And Indian companies have put in more than $40 billion in sectors such as IT, pharmaceuticals, and green energy. E.g.- Air India announced the purchase of more than 200 Boeing aircraft.
3. Technology and Innovation: Cooperation in sectors such as information technology, biotechnology, space exploration, and clean energy has expanded rapidly, bolstered by joint research projects, academic exchanges, and private-sector partnerships. E.g.- Patent licensing agreements between Indian and US Pharma.

Strategic relation:

1. QUAD: A four-country grouping, which has Australia and Japan alongside India and the US, was repurposed in 2017, primarily as a counter to China’s growing influence in the Indian Ocean region, and as a forum for redoubling focus on the Indo-Pacific region.
2. I2U2: India, Israel, the US and the United Arab Emirates, are focused on joint investments and new initiatives in water, energy, transportation, space, health, and food security.
3. US-India initiative on Critical and Emerging Technologies: taken up by India’s National Security Advisor Ajit Doval and his US counterpart Jake Sullivan.
4. Supply Chain Resilience: Partnership on the Semiconductor supply chain to make it more resilient through private sector cooperation. It creates the possibility of India getting aligned for a more central role in the global electronics supply chain. E.g.- the ‘Chip 4’ alliance initiative of the US with three other top semiconductor makers, Taiwan, Japan, and South Korea.
5. Defence Collaboration:
1. War exercises: Tiger Triumph, Vajra Prahar, Yudh Abhyas, Cope India, and Malabar Exercise
2. Defence Technology and Trade Initiative (DTTI) aim to foster co-development and co-production efforts.
3. Foundational agreements like GSOMIA, LEMOA, COMCASA, and BECA enhance military information, logistics exchange, compatibility, and security between the two countries.

Challenges in the bilateral relations:

1. Withdrawal of Generalized System of Preferences: The Generalized System of Preferences (GSP) provided special privileges to India, allowing duty-free exports of goods like textiles and engineering products to the US market. However, the US has withdrawn these benefits, impacting Indian exports.

1. Minerals Security Partnership (MSP): India is not a party to MSP, a US-led partnership to secure supply chains of critical minerals that are aimed at reducing dependency on China.
2. Crude oil from Russia: At 1.96 million bpd, Russian crude accounted for almost 42 per cent of India’s total oil imports in May 2023, beating the cumulative import volumes from at least the next five major suppliers, like Iraq and Saudi Arabia, as per the Vortexa data.
3. Visa Delays and H1B Visas: The US has imposed restrictions on H1B visas, which affects Indian professionals seeking work opportunities in the US. There is now a cap on the number of H1B visas issued, creating limitations for Indians moving to the US for employment.
4. Significant export controls on India inhibit the free transfer of technology. Eg- Import of Dual-use goods which can have civilian as well as military applications

• Data localization move of India: The US, is home to major data giants like Google and Facebook that gather significant amounts of data from Indian consumers. India's plan to implement data localization rules, requiring data to be stored within the country, is being opposed by the US.
• IPR: US has accused India of Intellectual Property Rights (IPR) violations and has placed India on the "Priority Watch List."

The US-India relationship holds immense potential not only in advancing their respective national interests but also in shaping global governance, promoting peace, and addressing shared challenges. Continued commitment to strengthening this partnership will undoubtedly have a lasting impact on the trajectory of the 21st-century geopolitical landscape.