If the first three months of the year are any indication, the rest of 2023 is going to be a highly productive period for U.S.-India relations.
In February, the newly privatized Air India created headlines when it announced a deal with Boeing to acquire 220 aircraft. Around the same time, the word came out that Prime Minister Narendra Modi will be in Washington later this summer for his first state visit to the White House.
In March, U.S. Secretary of State Tony Blinken visited New Delhi to attend a G20 diplomats’ meeting, during which he entered the U.S. embassy in an “autocade” — a convoy of autorickshaws.
The historic Air India-Boeing deal set the ball rolling for the year for U.S.-India relations. When U.S. President Biden announced the deal in Washington, on Valentine’s Day, he said that the “purchase will support over one million American jobs across 44 states.”
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Considered the largest commercial aviation order ever, the transaction includes the purchase of 20 787 Dreamliners, 10 widebody 777X, and 90 737 Max jets, which could cost up to $34 billion.
“This announcement also reflects the strength of the U.S.-India economic partnership,” said Biden in a White House press release.
Air India and Boeing go a long way back. More than six decades ago, Air India was the first airline in Asia to operate an aircraft powered by jet turbine engines and one of the first globally to have an all-jet fleet.
The deal between the two companies is significant not just because of its size. The same day it was announced, Air India, now owned by Tata Sons, also revealed that it would buy another 250 planes from the European giant Airbus.
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Together, the two deals are a testimonial to the consumption power of the Indian market. Currently, the third largest in the world behind China and the United States, India’s aviation industry is also the fastest-growing market globally. Last year, the government signaled that it was building 21 greenfield airports across the country.
From the U.S. standpoint, the Air India Boeing deal provides the clearest sign to date that the decades-long investment of Americans in India is paying off. Recognizing the country’s potential, since the 1990s, the U.S. government and the country’s businesses have consistently invested in India. While their investments in sectors such as information technology have paid big dividends for both countries, the U.S. investments have not panned out as expected in a number of other areas.
For instance, when the historic U.S-India Civil Nuclear Agreement was signed in 2008, there were expectations in Washington that American companies would get a large chunk of business resulting from that agreement. For a variety of business and political reasons, that large volume of business did not materialize.
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Another problematic area identified by many, including U.S. lawmakers in Washington, is India’s overdependence on Russia and European nations for its defense needs.
The Air India deal, will no doubt cause U.S. businesses, especially in high technology sectors, to take a second and more enthusiastic look at India.
Another offshoot of Air India’s order is that it will boost the U.S.-India bilateral trade to new heights. Last year, the trade between the world’s largest and fifth-largest economies was $133 billion.
While that was a record year in bilateral trade between the two countries — the previous high was $113 billion registered in 2021 — in volume, it constitutes just 1.8 percent of America’s global trade. By contrast, U.S. trade with China is nearly nine times higher than U.S. trade with India.
The Air India deal also has strategic implications. President Biden made that clear in his announcement when he said, “Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges — creating a more secure and prosperous future for all of our citizens.”
During the same time period that Air India and Boeing were negotiating their deal, the U.S. and Indian governments were in talks over the dates and details of Modi’s state visit to Washington, which is likely to occur later this summer.
On the sidelines of the G20 foreign ministers’ meeting in March, Secretary of State Blinken reportedly had a discussion with his counterpart, India’s Minister of External Affairs S. Jaishankar regarding the visit, which will be the first state visit by an Indian prime minister to the U.S. since 2009.
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These communications are ongoing and the two sides are still working out the specifics of Modi’s visit.
The Modi visit is not going to be the only high-level bilateral visit of the year. In September. President Biden is expected to visit New Delhi for the G20 summit, chaired by Modi. This will be Biden’s first India visit as the commander-in-chief.
To cap off the year, the United States and India will join dozens of other nations at the 28th United Nations Climate Change Conference to be held in Dubai toward the end of the year.
The interactions cited here constitute just a few highlights of an eventful and potentially highly productive year in U.S.-India relations.
The unanswered question, given the general elections that will be held in both India and the U.S. in 2024, is how will this year’s positive results influence and shape U.S.-India relations for the years to come. The outcomes of those elections will start to answer that question.
(The author is an entrepreneur, civic leader, and thought leader based in Washington, DC. The views expressed here are personal.)