This year the US and India are both holding national elections, the outcomes of which will shape the trajectory of relations between the two nations for at least half a decade. Barring a surprise, victory appears likely for the governing Bharatiya Janata Party in the Indian general election, while the outcome of the US presidential race is a toss-up.
Voters in both countries are choosing more than just a leader or party; they are also voting between markedly different styles of interaction with the rest of the world. But just how different would the relationship between Indian Prime Minister Narendra Modi and US President Joe Biden be from the one between Mr Modi and Mr Biden’s primary challenger, Donald Trump? Mr Modi has worked with both presidents, and Indo-American relations have been strengthened under both administrations. However, the trends suggest that while the points of convergence between the two governments in both cases will probably be similar, the points of friction will differ significantly.
This is important, given the gradual shift in the centre of gravity of the relationship between the two countries.
For more than a decade, the force driving increased Indo-American co-operation was a shared concern about China’s increasing strength and assertiveness. But now India is the fastest-growing large economy in the world, while China is seen by some countries as an increasingly risky investment destination. As a result, Wall Street is making big bets on India, viewing it as an exciting new frontier. New Delhi is keen to facilitate this, given its goal to become the world’s third-largest economy before the end of the decade.
In other words, the business and financial sectors in both countries are counting on each other to generate the growth and development they need. Shifting the driver from government to the private sector means that the relationship is likely to be less sensitive to who is in power in Washington and New Delhi. This growing economic interdependence is also constructive because it frees the relationship from a reliance on shared reactions to third parties such as Beijing.
Aircraft carriers and warships taking part in the Malabar joint naval exercise involving India, the US, Japan and Australia, in the northern Arabian Sea in 2020. AP
The Indo-American strategic partnership is growing beyond a shared suspicion of China
Secondly, the strategic partnership is growing beyond a shared suspicion of China.
Both countries depend on security in the Indian Ocean region. But with neither power able to manage the challenges – ranging from piracy to disaster relief, proliferation of weapons of mass destruction, extremism and cybersecurity – on its own, they have increasingly come to rely on each other. India’s growing use of American weapons systems is also creating its own dynamic, deepening and broadening contact between the two militaries, while increasing interoperability.
These avenues have managed to offset some areas of difference, such as India’s energy relationship with Russia and its official position of neutrality on the Ukraine war.
As noted earlier, however, there are also likely to be serious differences during a second Trump or Biden term, but these differences will be specific to the ideological commitments of the two contenders.
For Mr Trump, the sticking point will undoubtedly be trade. Both he and Mr Modi are promising to revive their countries’ manufacturing sectors to bring economic security to their working-class masses. The difference, though, is that Mr Modi is counting on doing it through an increase in exports (that is, free trade), while Mr Trump has a strong preference for protectionism.
The Indo-US trade deal foundered on these rocks during Mr Trump’s first term. And while the Biden administration has entered into deals with New Delhi, Mr Trump has shown his willingness to walk away from agreements signed by his predecessors. Some of the progress made, therefore, could very well be undone, without any guarantees of success in the renegotiation process.
More Indian firms than ever are looking to the US as a source of technology and customers, not just investment. A second Trump term would probably slow the pace of India’s integration into US supply chains. This would be an enormous opportunity cost for India in particular.
Another sticking point in a second Trump term is likely to be migration. The former president is in favour of reducing all immigration to the US, including highly skilled workers. This is something that will especially affect India with its large reservoir of university graduates and sizeable first-generation diaspora. Senior figures within the Trump circle have even publicly expressed concerns about the number of Indian-born chief executives, particularly in the tech sector.
As president, Donald Trump drew the US closer to India. Reuters
Given that India’s most serious unemployment problem is among university-educated urban youth, curbs on foreign recruitment could have economic ramifications. It is also likely to have an adverse impact on US favourability in Indian public opinion, which in turn could pose problems for New Delhi’s security policy alignment with Washington.
On the other hand, a second Biden administration could experience increased frictions with a third Modi term over what can broadly be classed as “values”. Although Mr Modi is enormously popular in large parts of India, his governance style has polarised opinion in the country on a range of issues, from neoliberal economic reforms to crackdowns on opposition parties to overt religiosity in the public sphere.
These are issues that greatly trouble the progressive wing of Mr Biden’s Democratic Party, as well as liberal American institutions. Although the Biden administration, like the Modi government, has worked hard to insulate the strategic relationship from some of the wedge issues, the fundamental difference in ideological perceptions between the two governing parties’ voter bases will be hard to avoid. Any criticism of New Delhi will be seen by Modi supporters as an affront both to their leader and to their country.
In contrast, a second Trump administration is unlikely to express any opinion at all on cultural and social issues, unless it involves India’s evangelical Christian communities.
Given these circumstances, America’s relationship with India could increasingly come to resemble its relationships with some of its allies and partners in the Middle East, wherein deep economic and security ties coexist with seemingly intractable political differences. This is a situation where a mix of personal relations and mutual strategic dependence forms the basis of a long-term, world-shaping partnership.
However, what the path towards such a partnership is going to look like is far from set right now – it isn’t something to be negotiated by diplomats at summits but, rather, by voters at the ballot box over successive elections.
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The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11 What time: Each day’s play is scheduled to start at 2pm UAE time. TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
