The Logistics Exchange Memorandum of Agreement

Military

The U.S. has four “foundational” agreements that it signs with its defence partners. The Pentagon describes the agreements as “routine instruments that the U.S. uses to promote military cooperation with partner-nations”. American officials have stated that the agreements are not prerequisites for bilateral defence co-operation, but would make it simpler and more cost-effective to carry out activities such as refueling aircraft or ships in each other’s countries and providing disaster relief. The first of the four agreements, the General Security Of Military Information Agreement (GSOMIA), was signed by India and the U.S. in 2002. The agreement enables the sharing of military intelligence between the two countries and requires each country to protect the others’ classified information. The second agreement, the Logistics Exchange Memorandum of Agreement (LEMOA), was signed by the two countries on 29 August 2016. The LEMOA permits the military of either country to use the others’ bases for re-supplying or carrying out repairs. The agreement does not make the provision of logistical support binding on either country, and requires individual clearance for each request.

Economic

The United States is one of India’s largest direct investors. From 1991 to 2004, the stock of FDI inflow has increased from USD $11.3 million to $344.4 million, and totaling $4.13 billion. This is a compound rate increase of 57.5 percent annually. Indian direct investments abroad began in 1992, and Indian corporations and registered partnership firms are now allowed to invest in businesses up to 100 percent of their net worth. India’s largest outgoing investments are in the manufacturing sector, which accounts for 54.8 percent of the country’s foreign investments. The second largest are in non-financial services (software development), accounting for 35.4 percent of investments.

Nuclear cooperation

In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India’s nuclear tests in May 1998. A succession of non-proliferation dialogues bridged many of the gaps in understanding between the countries.

In December 2006, the US Congress passed the historic Henry J. Hyde US-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India for the first time in 30 years. US policy had been opposed to nuclear cooperation with India in prior years because India had developed nuclear weapons against international conventions, and had never signed the Nuclear Non-Proliferation Treaty (NNPT). The legislation clears the way for India to buy US nuclear reactors and fuel for civilian use.

The India–United States Civil Nuclear Agreement also referred to as the “123 Agreement”, signed on 10 October 2008 is a bilateral agreement for peaceful nuclear cooperation which governs civil nuclear trade between American and Indian firms to participate in each other’s civil nuclear energy sector. For the agreement to be operational, nuclear vendors and operators must comply with India’s 2010 Nuclear Liability Act which stipulates that nuclear suppliers, contractors and operators must bear financial responsibility in case of an accident.

Prominent industrial accidents (1984 Bhopal chemical-gas disaster and the 2011 Fukushima nuclear disaster) has led to greater scrutiny by civil society into corporate responsibility and financial liability obligations of vendors and operators of critical infrastructure. In 2010, the Indian Parliament voted the Civil Liability for Nuclear Damage Act to address concerns and provide civil liability for nuclear damage and prompt compensation to the victims of a nuclear incident.

Counter-terrorism and internal security

Cooperation in counter-terrorism has seen considerable progress with intelligence sharing, information exchange, operational cooperation, counter-terrorism technology and equipment. India-U.S. Counter-Terrorism Cooperation Initiative was signed in 2010 to expand collaboration on counter-terrorism, information sharing and capacity building. A Homeland Security Dialogue was announced during President Obama’s visit to India in November 2010 to further deepen operational cooperation, counter-terrorism technology transfers and capacity building. Two rounds of this Dialogue have been held, in May 2011 and May 2013, with six Sub-Groups steering cooperation in specific areas. In December 2013, India-U.S Police Chief Conference on homeland security was organized in New Delhi. Police Commissioners from India’s top four metropolis paid a study visit to the U.S. to learn the practices of megacities policing in the U.S. in November 2015. The two sides have agreed on a joint work plan to counter the threat of Improvised Explosives Device (IED). In order to further enhance the counter terrorism cooperation between India and the U.S., an arrangement was concluded in June 2016 to facilitate exchange of terrorist screening information through the designated contact points. India-U.S. Joint Working Group on Counter-Terrorism held its 14th meeting in July 2016 in Washington DC.

Energy and Climate Change

The U.S.-India Energy Dialogue was launched in May 2005 to promote trade and investment in the energy sector, and held its last meeting in September 2015 in Washington DC. There are six working groups in oil & gas, coal, power and energy efficiency, new technologies&renewable energy, civil nuclear co-operation and sustainable development under the Energy Dialogue. Investment by Indian companies like Reliance, Essar and GAIL in the U.S. natural gas market is ushering in a new era of India-U.S. energy partnership. The U.S. Department of Energy has so far given its approval for export of LNG from seven liquefaction terminals in the U.S., to countries with which the U.S. does not have a free trade agreement (FTA) - with two of these five terminals, the Indian public sector entity, Gas Authority of India Limited (GAIL) has offtake agreements, totaling nearly 6 million metric tonnes per annum (MTPA). These terminals are expected to be complete and in a position to export cargoes by late 2016/early 2017. As a priority initiative under the PACE (Partnership to Advance Clean Energy), the U.S. Department of Energy (DOE) and the Government of India have established the Joint Clean Energy Research and Development Center (JCERDC) designed to promote clean energy innovations by teams of scientists from India and the United States, with a total joint committed funding from both Governments of US$ 50 million.

Space

A bilateral Joint Working Group on Civil Space Cooperation provides a forum for discussion on joint activities in space, including (i) exchange of scientists; (ii) OCM2, INSAT3D collaboration; (iii) Cooperation on Mars mission; (iv) nano-satellites; (v) carbon /ecosystem monitoring and modeling; (vi) feasibility of collaboration in radio occultation: (vii) Earth Science Cooperation: (viii) international space station; (ix) global navigation satellite systems; (x) L&S band SAR; (xi) space exploration cooperation; (xii) space debris mediation. The last meeting of the JWG was held in September 2015 in Bengaluru. NASA and ISRO are collaborating for India’s Mars Orbiter Mission and for a dual-band Synthetic Aperture Radar (NISAR). In June 2016, ISRO successfully launched record 20 satellites onboard PSLV rocket, which included 13 satellites from the United States.

Science & Technology (S&T)

The India-U.S. S&T cooperation has been steadily growing under the framework of U.S.-India Science and Technology Cooperation Agreement signed in October 2005. There is an Indo-U.S. Science & Technology Joint Commission, co-chaired by the Science Advisor to U.S. President and Indian Minister of S&T. The U.S. attended as the partner country at the Technology Summit 2014 at New Delhi. In 2000, both the governments endowed the India-U.S. Science & Technology Forum (IUSSTF) to facilitate mutually beneficial bilateral cooperation in science, engineering, and health. Over the past decade, the IUSSTF has facilitated more than 12,000 interactions between Indian and U.S. scientists, supported over 250 bilateral workshops and established over 30 joint research centers. The U.S.-India Science & Technology Endowment Fund, established in 2009, under the Science and Technology Endowment Board promote commercialization of jointly developed innovative technologies with the potential for positive societal impact. Collaboration between the Ministry of Earth Sciences and U.S. National Oceanographic and Atmospheric Administration has been strengthened under the 2008 MOU on Earth Observations and Earth Sciences. A “monsoon desk” has been established at the U.S. National Centers for Environmental Prediction. India’s contribution of $250 million towards Thirty-Meter Telescope Project in Hawaii and Indian Initiative in Gravitational Observations (IndiGO) with U.S. LIGO Laboratory are examples of joint collaboration to create world-class research facilities.

Health Sector

Under the 2010 U.S.-India Health Initiative, four working groups have been organized in the areas of Non-Communicable Diseases, Infectious Diseases, Strengthening Health Systems and Services, and Maternal and Child Health. In order to build up the disease surveillance and epidemiological capacity in India, Global Disease Detection-India Centre was established in 2010 and an Epidemic Intelligence Service program launched in Oct 2012. U.S. National Institutes of Health, the Indian Council of Medical Research, and India’s Department of Biotechnology have developed a robust relationship in the biomedical and behavioral health sciences, research related to HIV/AIDS, infectious diseases, diabetes, cardiovascular diseases, eye disease, hearing disorders, mental health, and low-cost medical technologies. In the first meeting of the Health Dialogue in September 2015 in Washington DC, both sides agreed to collaborate institutionally in the new areas of mental health and regulatory and capacity-building aspects of traditional medicine.

India is in the midst of major and rapid economic expansion. Many U.S. business interests view India as a lucrative market and candidate for foreign investment. The United States supports India’s efforts to transform its once quasi-socialist economy through fiscal reform and market opening. Since 1991, India has taken steps in this direction, with coalition governments keeping the country on a general path of reform. However, there is U.S. concern that movement remains slow and inconsistent.

India is an indispensable partner for the United States. Geographically, it sits between the two most immediate problematic regions for U.S. national interests. The arc of instability that begins in North Africa, goes through the Middle East, and proceeds to Pakistan and Afghanistan ends at India’s western border. To its east, India shares a contested land border with the other rising Asian power of the twenty-first century, China. India—despite continuing challenges with internal violence - is a force for stability, prosperity, democracy, and the rule of law in a very dangerous neighborhood.

For New Delhi, the principal driver behind the transformation of its relations with Washington lies in the Indian ambition to become the world’s third-largest economy by 2025 and, consequently, also emerge as one of the key global political and security actors. This fundamental objective requires two external conditions: first, at the very least, ensuring a nowar environment, particularly in India’s immediate neighborhood; and second, the ability to shape global rules in terms of existing and emerging norms and institutions that have a direct impact on India’s ambitious development goal and economic well-being—particularly multilateral norms and institutions related to climate, cyber, energy, food, outer space, trade, and water (rivers and oceans)policy.

Despite this significant progress, India and the U.S. still have a long way to go to reach their desired goals of enhanced bilateral relation in strategic spheres. In 2015, imports from the U.S. were US$21.4bn while India’s exports to the U.S., which totalled about US$40bn in 2015, stood at less than two per cent of total goods that enter the U.S.

Recommendations

The following three areas offer a way to focus U.S. efforts in the coming months:

Deepen Defense Cooperation

At a time when international norms and institutions are being tested, the U.S. and India have stood steadfast in supporting an Indo-Pacific region that protects freedom of navigation and the sovereignty of states – large or small. The U.S. has recognized that a defense partnership with India will be critical to safeguarding these values. As India seeks to modernize its defense capabilities, Washington should become India’s defense partner of choice by continuing to strengthen bilateral defense cooperation.

Pursue Bilateral Economic Deals

In the coming decades, Asia will be the growth engine for the world, and India will be one of the fastest growing large economies contributing to that growth. This presents an immense market for U.S. goods and services, and an opportunity for India to benefit from greater trade and investment – leading to employment and growth for both countries. However, this requires being able to put in place the necessary policy frameworks that give confidence and certainty to the private sector.

Invest in Connectivity

It is difficult to find a concept that has such widespread support such as improving connectivity, both within India and across the region. Whether it be improving people-to-people ties, economic and development cooperation, physical infrastructure, energy security and access, or collaboration to address transnational threats, greater connectivity can create tremendous security, economic, and geopolitical value to the United States, India, and countries in the region.