Transcript of Interview with Rick Rossow of CSIS

Speaker 1: Kerav Agarwal, Founder of 2Republics 

Speaker 2: Rick Rossow, Senior Adviser and Chair on India and Emerging Asia Economics

 Speaker 1: So, looking ahead, what do you think is the most important area where India and the United States should work together over the next decade, especially now with the new Trump administration? 

 Speaker 2: Well, there's a couple of things I'll mention to that. You know, I always kinda break up the relationship. There's 3 main buckets. People to people, that I don't think they need to work on.They just need to make sure they don't break anything. You got students moving. You got H1B tech workers. So that's going okay. So I wouldn't say that's an area for working on, but it's an important area that's going relatively well right now.The 2 areas that need a lot more work, first is on security and military cooperation. The threats that China poses, which has really been the gel that's brought us together, continues to evolve in, for the most part, dangerous ways. And both the United States and India feel that our security interests are being impinged upon directly and indirectly. The United States and India don't have a long track record of figuring out ways to work together militarily. So we're still trying to feel out what that looks like.

To most American security analysts, when you think about the China threat, you think primarily of the East Asia context. Taiwan Straits, South China Sea, East China Sea, Pacific Islands. But understandably for India, the main concern is the Indian Ocean and China's increasing, military presence in the Indian Ocean. So figuring out ways that our militaries can further deepen collaboration and bridge this gap where we both look at different regions as the main security threat, We need to find pathways to accommodate the other's concerns, and I think that'll unlock a lot of new promising areas for military collaboration. The other big area is commercial.

We've got a healthy commercial relationship. You know, to India, the United States is the ultimate commercial partner. We're the largest partner for IT services trade. We're the largest or second largest partner depending on the year on goods trade. We're a major source of foreign direct investment into India.You know, to the United States, India is a rising economic partner. They're our 9th largest trading partner. They're a growing source, although still relatively small in foreign investment. But these numbers are still minuscule. You know, considering that by the end of this we're gonna be the number 1 and number 3 largest economies in the world.

. The level of the economic integration remains small. So finding ways to resolve some of our commercial disputes to, especially for India to expand, foreign investment limitations, that will really unlock the commercial promise, which today, you know, certainly has grown over the last 20 years, but underperforming when you look at the size of our economies. 

Speaker 1: So you're saying in the areas of defense and commerce are the 2 areas where both countries should work the most together?

 Speaker 2: Yeah. Really prioritize those areas. I agree. Yep. 

Speaker 1: One question that I've always wanted to ask an expert is that India has very close ties to Russia.And with US positions on Ukraine and India's position on the war a little bit different, has the given how historical the Soviet Union and now Russia's relationship with India, has it ever, like, harmed the US India relationships considering how close India and Russia are?  Speaker 2: It is. I mean, you know, the United States, the main reason for engaging India on security cooperation is not to sell more stuff. But that's always a nice thing to be able to do.

It makes our militaries look more similar to each other. It provides an economic incentive, for more US states, for congressmen, and others to care about making this relationship work. And so the fact that, you know, Russia had basically crowded out sales of almost any other country up until 20 years ago, you know, that was part of the reason why we didn't see a lot of economic promise or promise in the security relationship. Now we've been chipping away at that. United States has become a significant partner.India's heavy lift aircraft, light howitzers, drones now, helicopters, attack helicopters and heavy lift helicopters. So a lot of this has now become US based platforms. So India is moving in the hard direction. They're buying from France. They're buying from France.They're buying from Israel, and starting to peel away. Now with the war in Ukraine, you know, we saw India kinda doubling down. Russia went from India's 25th largest trade partner to its number 5 trading partner. You know, they're getting access to relatively cheap hydrocarbons, fertilizers, even textiles are coming in. And that may be kind of a short term blip, India taking advantage of a moment of relative Russian weakness.I think that, when you talk about the impact this has on the relationship, I would say, you know, as you see from the big summits that happened last year when Prime Minister Modi came here, US National Security Advisor Jake Sullivan was just in India this week.At the high levels, they're not letting this impede the relationship in a major way. They're going full gusto. They realize Russia's a declining power.India's a rising power. And if you're thinking of the future, let's bet on the rising power. But I would say across the board in the United States, when you get the lower levels of people inside the US government, people that have real decision making authorities further down the line, there, you know, concerns and frustrations about India basically giving Russia a pass after the invasion of Ukraine, increasing its trade, there is where things become a little bit trickier. Not everybody at medium and low levels across the US government has bought in that the promise of the relationship with India is big enough to kind of forgive what we see with the continued, and and in some ways growing partnership with Russia.So high levels, we're doing okay. People will work through it, despite India's continued ties with Russia. At the working levels, that's where you see a lot of frictions that continue and sometimes grow. 

Speaker 1: Thank you. I think the million dollar question is now that as President-Elect Donald Trump prepares to take office, do you think that India US relationships will change and will these be positive, negative?What are your what's your take on this?

Speaker 2: Yeah. It'll be a mix of positive and negative. I think, you know, again, getting back to the 3 main fronts, that we talked about before, people to people ties. There's been some concerns that, crackdown on immigration, including even for technology workers, which has been much debated within the Trump camp.If they do put clamps on H1Bs and potentially scare off, Indian college students who want to come here and study, because of course part of the promise isn't just the degree, but the hopes you can stay and work later on. You know, that might put a damper a little bit on the people to people ties. We saw that to some extent when you saw a drop in student numbers the last time that Trump was in office. On defense relations, I think things are gonna continue zooming absolutely in the right direction. Trump doubled down on India as a security partner, not just bilaterally, but also by augmenting the quad, the partnership between the United States, India, Australia, and Japan.And I suspect that he'll further embrace the quad, further embrace India as a security partner. We'll continue to sign important agreements that remove some of the obstacles to military cooperation, potentially get some additional sales and potential co-development opportunities. So security, I think, will continue and grow. Commercial is gonna be an area that I think is gonna be the rockiest. You know, India, as an attempt to try to build a domestic manufacturing ecosystem, has imposed a lot of restrictions on imports to try to give domestic producers some space to be able to grow and supply. And the last time Trump was in office, you saw a medium intensity trade war between the United States and India. Biden has chosen to kind of ignore that. And in fact, they resolved a few of the commercial disputes. And they've been directly encouraging American companies in strategic sectors to consider making investments in India, semiconductors, solar panels, things like that.I think that dies pretty quickly under the Trump administration. I don't think you're going to see I don't think you're going to see the direct cheerleading in support for outbound investment. You're gonna see a lot more pressure on it. 

Speaker 1: Will we see tariffs on India under the Trump administration? Yeah.

 Speaker 2: I think that's reasonable I mean, you never know. I mean, nobody can exactly predict. But last time that Trump was in office, you saw it in a few ways. Some of the globally applied tariffs on steel and aluminum hit India very directly. They evoked a trade preference program for India called the generalized system preferences.And so that increased tariffs on a lot of Indian goods coming into the United States. So you saw, you know, a few areas that were directly hit last time around. And so as Trump talks about applying tariffs specifically to China, but some tariffs that looked at if I globally, India was not carved out last time when they had globally applied tariffs on steel and aluminum. So based on the past track record and some of the announcements so far, I think there's a pretty good chance that we'll see increased trade pressures in India in the next administration. And some of that deserved.I mean, India has done a lot of the things that Trump complains about. Yeah. Higher customs duties, local manufacturing rules, some quality control mandates that have basically limited US companies' ability to export to India. So, you know, it's not that, you know, Trump is being a madman and doing this because there's no reason. But actually what he's responding to are some of the steps that India's actually taken that actually hurt the commercial opportunities for American companies.

 Speaker 1: Right. Finally, if you could share just one piece of advice with those working to strengthen India-US relationships, whether it's policymakers, researchers as yourself, students like me, what would that be? 

 Speaker 2: Well, you know, for me, the one thing that I always push my own team, we have a motto in the office, which you can see on my wall, called read big and write small. You know, I find that spending a lot of time reading newspaper articles about what's happening in US India relations and trying to learn about things like power grids and water and defense ties. You don't get enough substance out of that.And there's a lot of really thorough, exhaustive reports done by technical experts out there. And I think that to me is a lot better grounding in what's actually transpiring. If you if you read the headlines, you can imagine that the whole place is constantly in disorder and chaos and fighting. If you read a lot of technical reports about how the country actually functions and operates, whether it's power grids or water and things like that, you know, you find that, a lot of the challenges India faces are ones that we also face as well. There's a lot of space and scope for technical collaboration.So, so I'd say, you know, read better stuff. And, when you're traveling to India, get out of Delhi. Much of India is driven by state policies, and increasingly, I think cities are gonna play a big role. So, if you really wanna learn what's transpiring on India's development trajectory and what that means for US partnership, a lot of those answers are gonna be driven in places like Bhubaneswar and Patna rather than Delhi in the future. So, read big, read better, and get out of Delhi when you're traveling to India.

 Speaker 1: And just as a final, fun question, what's your favorite Indian food? 

Speaker 2: Favorite Indian food, moorkh marg, chicken, butter chicken. I could eat that forever. 

Speaker 1: Thank you so much. Yeah.

Link to Interview: https://www.youtube.com/watch?v=wuqno355G0U