On Wednesday, June 26, US Secretary of State Mike Pompeo visited India to meet with Prime Minister Narendra Modi ahead of the G20 Summit in Osaka, Japan.
Tensions between the US and India have been escalating because of trade tariffs and the US’ insistence that India halt all oil imports from Iran. Indian officials also wanted clarity from the US on whether or not there will be a cap on H-1B visas for countries that engage in data localisation.
“The Prime Minister expressed his strong commitment to achieve the full potential of bilateral relations in trade and economy, energy, defence, counter-terrorism and people-to-people contacts,” said the Press Information Bureau.
Spokesperson for the Ministry of External Affairs Raveesh Kumar said Minister Subrahmanyam Jaishankar and Secretary of State Mike Pompeo had “constructive talks” and were “continuing the wide-ranging partnership” between their two countries.
Russia’s S-400 missile system creates a wedge
NDTV reports that the US has taken issue with India acquiring Russia’s S-400 missile system despite American sanctions. The missile system is long-range and costs $5 billion. India has also been investing in its own domestically made long-range missile system under the Mission Shakti programme.
However, the US Congress passed a law that gives ally countries like India a waiver for maintaining relations with heavily sanctioned countries like Iran, North Korea, and Russia. So, India says this law, although not signed yet by US President Donald Trump, protects India’s tryst with Russia.
“We have a longstanding defence relationship with Russia, which we cannot wish away,” said an official to NDTV.
Still, while India meets the legal criteria for being exempt from following American sanctions, the US can change its stance depending on the current political context, said an official.
The US has also given India Tier-1 status under the Strategic Trade Authorisation (STA) that allows India licence-free imports of defence equipment from NATO members. In the eyes of the US, India’s tier-1 status should be reason enough to forgo the S-400 missile system.
Of H-1B visas and Iran oil imports
Pompeo and Modi have also discussed the energy sector. The State Department said Pompeo will relay the urgent need for India to isolate Iran by cutting oil imports.
In April, the US announced that it was ending a sanctions waiver for some allied countries, including India, that still import oil from Iran. Wanting to crush oil revenue for Iran, the Trump administration said it will not renew any sanction waivers for Iranian oil imports.
The waivers expired on May 2. At the time, India said it only complies with international sanctions and will take a decision on Iranian oil imports based on national interests. However, a US State Department official said the country has since changed its tune and reduced imports.
The US also allowed a continued exemption of the Chabahar Port in Iran that India uses to deliver humanitarian aid to Afghanistan.
The two countries also touched base on immigration, particularly the H-1B visas.
Pompeo told Modi that despite data localisation, the US is not imposing a cap on the number of H-1B visas Indian nationals can acquire.
Why this matters
India has been receiving pushback from other countries over its new e-commerce and data localisation policies that ask for all big data scrubbed from economic transactions to be stored on servers physically located in India. Data localisation is expensive for MNCs and other countries because it requires them to invest in digital infrastructure.
Regardless of these complex issues, dialogue between the countries is of utmost importance. Therefore, Pompeo sitting down with Modi ahead of the G20 Summit is a good sign, because it shows that each side is aware of the other’s allyship, wants to keep diplomatic relations strong, and is willing to come to a mutually beneficial compromise.
Rhea Arora is a Staff Writer at Qrius
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