US and India Deepen Ties with Deals in Defense and Tech

Indian PM Narendra Modi was on a four-day state visit to the USA, from 20 to 23 June 2023. Several notable agreements were signed during Modi’s passage in America.

The US is now India’s top trading partner, surpassing China, with a trade volume of USD 130 billion in 2022. However, the potential is huge and largely untapped. In a bid to boost trade, India has been pushing for FTA with several countries, but no such agreement is yet on the table with US.

Currently, there are about 5 million people of Indian origin in US. The Indian diaspora is one of the largest immigrant groups in the US and is also the fastest growing at the moment. In some swing states, the Indian vote bank could play a decisive role in the US Presidential election scheduled for next year.

Following the onset of the Ukraine-Russia conflict, the US has been trying to lure away India from Russia when it comes to military supply. Thus, several items which were stalled have now been cleared.

Some of the military agreements include:

  • JV between General Electric and Hindustan Aeronautics to produce F414 jet engines in India
  • US navy ships to dock at Indian shipyards for service and repairs
  • US to supply India with MA-9B Sea Guardian drones

In addition, both parties signed an India-US Defense Acceleration Ecosystem Agreement aimed at fostering partnership between US and India defense industries.

Several other agreements covered access to #CriticalMinerals and semiconductors, use of telecoms equipment and collaboration on #AI. During his speech in Congress, Modi jokingly expanded the definition of #AI to mean America-India and received a standing ovation.

Moreover, the US will increase the Indian student visa quota by 20%. Last year, the US issued 125,000 student visas to Indians and with this increase, Indian students are set to become the largest foreign student community in the US.

Applied Materials CEO Gary Dickerson announced plans to open a new semiconductor center for in India. On the space front, US NASA and Indian Space Research Organization (ISRO) will partner to conduct a human spaceflight mission.

Musk Meets Modi in New York

During the visit, PM Modi is scheduled to meet with several industry leaders who are of Indian origin such as Satya Nadella, CEO of Microsoft, and Sundar Pichai, CEO of Google. Modi will also have a chance to further discussions with Tim Cook, CEO of Apple, who transferred part of the manufacturing of iPhones to India as part of the MakeInIndia drive and #derisking strategy by diversifying away from China.

Modi also had a meeting with Tesla CEO Elon Musk while in New York. Without giving out too many details at this stage, Musk declared that Tesla intends to make a ‘significant investment’ in India. Elon Musk underscored that he is “incredibly excited about the future of India and that India holds more promise than any large country in the world.”