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What Next For The US International Defence Relationship With India? By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

Leave aside how the ‘relationship’ between the Trump administration, China and Russia might develop from here on, but what about the US/India defense and trade relationship?

Speaking at what I suspect was his final press conference at the Pentagon yesterday, outgoing US Secretary for Defense, Ash Carter said that the India/US defense relationship is moving along on the right path and that the two nations are discussing ways to further develop the partnership through technology sharing and  co-production. “We are on the right path” he said “it’s just a matter of taking those steps. These involve “deepening our co-operation in lots of ways” he said and suggested that this included “exercises and other kinds of operational activities”.

With Ash Carter declaring India to be a major defence partner with the US and with the Secretary of Defense having been heavily involved in building a new India/US defense relationship, I am bound to wonder whether a Pentagon administration under the gaze of the future President Trump will see the value of having a close relationship with India in a similar light?

Part of the answer lies in how the Trump administration approaches its future relationship with Iran. We already know what Donald Trump has said in respect of views on the Obama led nuclear deal with the Rouhani led administration in Iran but would Donald Trump in his desire to make America great again really wish to destroy the huge trading opportunities for American companies to do more deals with Iran in favour of working closer with India on potential trade deals many of which would might require some degree of technology transfer to Indian based companies? I doubt that many large US companies are in the mood to agree technology transfer.

My own hunch is that while Donald Trump may have little or no regard for the Iran nuclear deal and although he will continue to sabre rattle on the deal, the reality is more likely that he will leave well alone unless something occurs that causes a justifiable rethink. If this is what Trump does then of course, it may not be to India’s liking particularly as Iran continues to have close relations with Pakistan.

For the incoming Trump administration understanding the complexities of Indian diplomacy and its regional relations will be crucial in deciding the stance it will take. Not least of these will be understanding India/Iran diplomacy moves.

Last May, India Prime Minister Narendra Modi visited Tehran in what was hailed as a long overdue ‘historic’ visit. While relations between the two nations continue to be ‘frosty’ there is no doubt that a substantial amount of goodwill was achieved by the Modi visit. For example, India chose to release around $700 million of what is reputed to be a total $6 billion that it owes Iran for oil, This fact alone undoubtedly helped ‘grease’ the wheels of a future stronger relationship between the two nations. During the Modi visit, India, Afghanistan and Iran also signed a trilateral trade treaty which has gone some way to reviving and maybe facilitating the languishing Chabahar ports project development. That said, long time sceptics of the project have also been quick to point out that the Chabahar project is still a very long way from being implemented and that a great deal more diplomacy and negotiation will be required.

Chabahar is important to India not so much from an economic perspective but from a strategic position. It is and will continue to be an interesting test for regional diplomacy and is also seen as being counter to the Chinese backed development at the Pakistan port of Gwada.

But while India continues to be very suspicious of China it also appears that Iran is now more than ready to embrace a stronger relationship with China. That will displease India just as it will also likely displease the US. Meanwhile Pakistan whose relations with India continue to be very poor is more than ready to embrace a stronger relationship with Iraq, placing additional pressures on both India and Iran.

For all that, the real point is that relations between India and Iran are now seemingly showing early signs of a partial thawing. Strengthening relationships is in the interests of both and particularly for India in terms of this being another counter to its long standing fears of China.

Another factor that the new US administration will wish to take into consideration is India’s traditionally relatively strong relations with Russia and Vladimir Putin. However, the relationship was put into some doubt when the Kremlin announced last September that it planned to carry out joint military exercises with Pakistan. India had backed Russia’s intervention in Syria and it has delicately stayed out of involving itself in criticizing Russia’ adventure in the Ukraine. But there is no doubt that suspicions of Russia’s intentions have grown and this has, along with the clear need to modernize its ageing defence infrastructure,  led to India continuing to increase its defence budget.

For America and indeed, for other western countries such as Britain, any desire by Russia to extend closer ties with Pakistan will be greeted with concern just as it will be seen as increasing opportunities to increase trade with India.

Given that both India and Iran have a long history of cultural ties the opportunities for the US to embrace the potential for trade ties with both countries may prove stronger than being seen to attempt to wreck the Iran nuclear agreement. Should Donald Trump attempt to throw a spanner in those works and seek a return to sanctions I for one take the view that this would clearly impact on India’s intentions in respect of building closer ties with Iran. It may well also damage US prospects in India opening the door up for others.

CHW (11th January 2017)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon






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