Major Takeaways from the Inaugural 2+2 Dialogue between India and USA


India US relations

The first-ever 2+2 dialogue between India and US was held at New Delhi on 06 September 2018.

United States was represented by Secretary of State Mike Pompeo and Defence Secretary James Matis and the Indian side was represented by Minister of External Affairs Sushma Swaraj and Minister of Defence Nirmala Sitharaman.

The primary objective of the meeting was to discuss and strengthen strategic, security and defence cooperation between the two nations.

The biggest take-away from the 2+2 dialogue between the two countries is the signing the Communications Compatibility and Security Agreement (COMCASA).

India has already signed two other foundation agreements with US, which include:

  1. General Security of Military Information Agreement (GSOMIA) in 2002.

  2. Logistic Exchange Memorandum of Agreement (LEMOA) in 2006.

Why is it called 2+2 Dialogue?

A ‘two plus two dialogue’ primarily means establishment of dialogue mechanism between defence and external affairs ministries of two countries.

In other words, it is an expression used to indicate that, the two appointed ministers from each country, the ministers of defence and external affairs in this case, will meet up to discuss the two countries’ strategic and security interests.

The 2+2 (diplomatic and security) dialogue format between India and Japan was launched in 2010.

The format of diplomatic meetings between India and United States which focused on regional security, economic cooperation, defence, trade and climate challenges was called ‘India-US Strategic Dialogue’ and was in place since 2009.

The above said format was upgraded to ‘India-US Strategic and Commercial Dialogue’ in 2015 during PM Modi’s visit to Washington and its second meeting was held in New Delhi in 2016.

The 2+2 format of dialogue between India and US was mutually announced by the two countries last summer, after Prime Minister Narendra Modi’s successful meeting with Trump.

The next 2+2 meeting is to be held in the United States in 2019.

Contentious Issues at the Backdrop of 2+2 Meeting-2018

Waiver from US Sanctions under CAATSA (Countering America’s Adversaries through Sanctions Act)

United States had imposed sanctions against Russia for annexation of Crimea and for meddling in US election in 2016.

CAATSA mandates the Donald Trump administration to punish entities and countries engaging in significant transaction with the defence or intelligence establishment of Russia.

India has recently finalized the deal to procure Russia’s most advanced long-range surface-to-air missile defence system, called S-400 Triumf at a cost of 40,000crore. Incidentally, Indian Army preferred S-400 against the Thaad missile system of US, which was also under consideration.

India now seeks a waiver from the Trump administration for the mega deal, citing its requirement for the missile system in the wake of the evolving regional security architecture as well as considering its close defence ties with Russia.

Moreover, it is felt that the signing of the COMCASA agreement could also reduce the chances of the United States imposing sanctions on India for looking to buy Russian S-400 surface-to-air missile systems.

Restrictions Imposed by US on Import of Iranian Oil

The United States had asked all countries to stop all imports of oil from Iran by 04 November 2018. The Trump administration has ruled out any exemption to India and Indian companies from its re-imposed Iranian sanctions regime.

It may be noted that India is the second largest buyer of petroleum from Iran after China, and Iran is the third largest supplier to India after Saudi Arabia and Iraq. Hence, it may not be feasible for India to pull out of the Iran nuclear deal so easily.

Moreover, India has committed an investment to the tune of $500 million to develop the Chabahar Port. The first phase of which was inaugurated recently, when India sent it’s first in a series of six shipments of wheat to Afghanistan via this Port and ratified the Trilateral Agreement between India, Iran and Afghanistan aimed to establish international transport and trade corridors.

Hence, India’s close and inextricable ties with Iran will continue to impinge upon the veracity of India-US relations.

India’s Trade Surplus with US

India, at present has a surplus of $23billion in trade with America. Naturally, for the Trump government it is an unacceptable development and US has lodged protests with multilateral agencies regarding higher import duties imposed by India on US merchandise.

Consequently, the US treasury has put India on a watch-list along with China and many other developed economies for amassing huge reserves and what it calls unfair currency practices.

In order to wipe out the trade surplus, the Trump administration is seeking a formal commitment for an additional purchase of $10 billion in civilian aircrafts and natural gas by India over the next three years.

United States have also unduly increased the tariff on Indian steel and aluminium recently as a means to reduce the trade deficit, which has already fallen by 5% since last year.

Major Takeaways from the 2+2 Dialogue

Communications Compatibility and Security Agreement (COMCASA):

United States has placed India on Strategic Trade Authorization (STA) Tier-1 list, a status enjoyed by only 36 other countries. The same will bolster India-US trade and technology collaboration and help India to get critical technologies from the United States.

The signing of the Communications Compatibility and Security Agreement (COMCASA) during the 2+2 dialogue, will allow for US communication equipment to be transferred to India, thereby increasing the level of interoperability between the two militaries.

The agreement will allow installation of high-security US communication equipments on Indian defence platforms procured from America. Hence, India will have to allow access to sensitive military communication networks to the United States, to which India had reservations due to national security reasons.

Therefore, the Indian government had been negotiating an India-specific agreement, in which specific additional provisions have been incorporated to safeguard security and national interests of India.

It has been mentioned in the text of the agreement that the data acquired through the equipment and systems being fitted with such devices to make it interoperable with US equipment, cannot be disclosed or transferred to any person or entity without India’s consent.

Furtherance of Military Ties and Conduct of Tri-service Joint Exercise

As another measure to further improve the Indo-US military ties, the two sides announced the deployment of an Indian liaison officer at the US Naval Forces Central Command (NAVCENT), which is in charge of naval operations in Afghanistan, Pakistan and the oil-rich Gulf countries.

Furthermore, in order to evaluate the specific requirements and the efficacy of the equipment and weapon systems for interoperability, an Indo-US joint, tri-service exercise will held on the East coast of India in 2019.

Greater Role of Private Sector Envisaged for Manufacture of Defence Equipment

The General Security of Military Information Agreement (GSOMIA) already allows sharing of classified information from the US government and American companies with Indian government and defence Public Sector Undertakings (PSUs), but it does not provide for, sharing of this information with the private sector companies.

The Indian Defence Minister Ms Sitharaman and US Secretary of Defence, James Matis announced to commence early negotiations on an Industrial Security Annex (ISA) that will allow Indian private sector to collaborate with the US defence industry for manufacturing of defence equipment and weapon systems.

Fillip to Innovations and Joint Defence Projects

A ‘Memorandum of Intent’ was signed between the US Defence Innovation Unit (DIU) and the India defence innovation organisation, called the ‘Innovation for Defence Excellence’, to look into joint projects through the Defence Technology and Trade Initiative (DTTI).

Geo-Political Issues

H-1B Visa: The issue of H-1B visa was taken up by the Minister of External Affairs Sushma Swaraj, who appealed to the US to keep this matter at a high-priority in ties between the two countries, as it impacted thousands of Indian IT professionals who are working in United States.

Fight against Terror: Pakistan was named in the joint statement to rein-in terror and not to allow its territory for the launch terrorist attacks on other countries. The two sides also expressed support for an Afghan-led, Afghan-owned peace and reconciliation process.

Speeding up NSG Process: Foreign Minister Sushma Swaraj informed that, US agreed to help India in speeding up the process of India’s entry into the NSG (Nuclear Suppliers Group).” Also, both sides looked forward to full implementation of the civil nuclear energy partnership and collaboration between Nuclear Power Corporation of India Limited (NPCIL) and Westinghouse Electric Company for the establishment of six nuclear power plants in India.

Promoting People to People Contact: Ministers highlighted the unmatched people-to-people ties between their countries and recognized the benefits to both nations and the world from these ties, including the free flow of ideas and collaboration in health, space, oceans, and other areas of science and technology.