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Following a number of agreements, India’s defence capabilities are expected to improve, which experts say also demonstrates Washington’s aim to strengthen ties with New Delhi in order to offset China’s dominance in the Indo-Pacific area.

The agreements, which were inked last week in Washington during Prime Minister Narendra Modi’s visit with US President Joe Biden, covered a wide range of topics, including clean energy and pharmaceuticals. Two in particular stand out because they are expected to signal a change from Delhi’s long-standing reliance on Russia as a source of weapons.

Ashok Mehta, a retired lieutenant general in the Indian army and an independent defence expert, stated that he believed the defensive framework to make India strong and increase its deterrent capabilities was the foundation of the accords.

“The current agreements are indicative of that, as Americans have been urging India to wean itself off its reliance on Russian military hardware.”

A high point is an agreement between the US company GE and the government-run Hindustan Aeronautics Limited to co-produce GE-F414 jet engines since it calls for knowledge transfers in machinery currently solely used by Russia, Britain, and France.

The agreement is anticipated to equip India’s indigenous TEJAS light-combat aircraft, which are intended to replace many of the Russian-built aircraft that have long made up the majority of the Indian Air Force.

Since the 1980s, Delhi has struggled to produce its own fighter-jet engines, and the Americans’ readiness to share the technology—though with restrictions—showed how far the partnership had progressed, according to Mehta.

In addition, India intends to buy MQ-9B High Altitude Long Endurance (HALE) unmanned aerial vehicles from General Atomics to help with border patrols on land and at sea, where tensions with China have been high ever since a border incident three years ago.

The Sukhoi Su-30MKI fighter jet is one of the nearly 70% of combat aircraft in India’s air force that are of Russian manufacture and design. The majority of India’s army’s tanks are T-72 and T-90 models built in Russia. Along with one of the nation’s two aircraft carriers, the INS Vikramaditya, several of India’s naval frigate warships are also of Russian construction.

But as Moscow has prioritised supplying spare parts to its own troops to fight the war with Ukraine, which has hampered operations of a number of India’s primary Su-30 fighter aircraft, analysts say, defence ties between the two countries have deteriorated.

The Indian Air Force only possesses 31 aircraft squadrons, despite claiming that it requires 42 to defend the nation against simultaneous attacks by Pakistan and China. To replace an old fleet of MIG-21s, it has been introducing the Indian-designed TEJAS powered by US-made F-404-GE-IN20 engines for the past seven years.

The TEJAS MK-2, a larger and more powerful aircraft than its predecessor, is anticipated to be equipped with the F-414 engine. Additionally, it will be utilised in India’s next HAL Advanced Medium Combat Aircraft.

Since its border conflict with China three years ago, Delhi has increased efforts to produce defence equipment domestically and increased the foreign investment cap in the defence industry from 49% to 74% for giving automatic approvals.

The US government will need to approve the GE-HAL agreement to jointly construct F-414 engines in India. Analysts claim that because it would be at least four to five years before the first engine is produced and the facility is projected to take three years to develop, India won’t be able to quickly lessen its reliance on Russia.

India has also increased its purchases from the US and other Western countries, particularly over the past ten years.

In September 2015, India and American manufacturer Boeing signed a contract for the purchase of 22 Apache helicopters and 15 Chinook helicopters. Both shipments were delivered to India by the year 2020. In addition, Delhi entered into a US$4.1 billion deal with Boeing to purchase C-17 aircraft. Away from the US, Delhi entered into a contract with France and Dassault Aviation in 2016 to purchase 36 Rafale fighter aircraft.

Analysts claim that India’s approach shows its desire to diversify its investments rather than increase its reliance on the West, noting that the nation has persisted in acquiring inexpensive Russian crude oil in the face of Western criticism and sanctions.

Delhi has avoided outright denouncing Russia’s invasion of Ukraine in favour of a diplomatic settlement, drawing further criticism from the West given that it is a member of the Quad, an informal security alliance that also includes the US, Australia, and Japan.

A “rules-based international order” is crucial, the US and India said in a joint statement during Modi’s visit, adding that “the contemporary global order has been built on principles of the UN charter, international law, and respect for sovereignty and territorial integrity of states.”

According to observers, Washington’s eagerness to solidify its strategic partnership with India in order to have a counterbalance to China, particularly in the Indo-Pacific area, was reflected in the measured tone of the joint statement on Russia.

To limit China, the US is methodically forging a ring of allies. The US’s alliance network is its main competitive advantage against China. Due to long-standing tensions between India and China, India makes a logical partner, according to Pushan Dutt, an INSEAD economics professor.

The four-nation Quad and Aukus, the security alliance between Britain, Australia, and the US, were also components of the ring, he claimed. With the same goal in mind, he continued, Washington has strengthened its defence connections with South Korea, Japan, and Papua New Guinea.

China “looms large in all calculations,” Dutt added, saying that the US “explicitly wants to stifle their development in China” in the areas of semiconductor and defence technology, which is why these areas are being focused on in collaboration with India.

Three years ago, Delhi started a project to strengthen its base of manufacturing, which includes electronic goods, and provided billion-dollar financial incentives. Additionally, a scheme to produce semiconductors was started to reduce imports, which are worth at about US$25 billion annually.

This week, two US semiconductor companies announced plans to invest in India. Memory chip manufacturer Micron Technology announced it would spend up to $825 million building a chip assembly and testing facility in Gujarat, while semiconductor toolmaker Applied Materials intends to spend about $400 million building a new engineering facility there.

According to Saurabh Agarwal, a tax partner at professional services company EY, incentives from the federal and state governments of India “are likely to range from 70% to 125 percent of the investments in semiconductor manufacturing in India, which are likely to attract more investments into the country”.

The complicated value chain of the semiconductor industry can be generally divided into three parts: design, fabrication, and assembly and testing. India is already a leader in semiconductor research and design, two fields that require software expertise, but it lags behind in the other two.

The US companies’ investments may inspire other businesses to start producing chips.

India presently imports all it needs from countries like Taiwan, but authorities are eager to create a semiconductor base there because chips are used in everything from mobile phones to complex aircraft systems.

Other areas of technological cooperation were strengthened by Modi’s visit. Elon Musk, the CEO of Tesla, said his company was looking to invest in India “as soon as humanly possible” following a meeting with Modi.

Since 2017, Musk has been attempting to enter the Indian market, but the strategy has been hampered by Tesla’s attempts to negotiate lower import duties. However, this request has so far been rejected by officials who want the business to first produce cars before considering tax incentives.

“It’s conceivable that Tesla will arrive right away. There is sufficient pressure for them, according to an industry executive who declined to provide his name.

Before Tesla’s anticipated debut, other companies were already making headway. A manufacturing facility for lithium-nickel-manganese-cobalt cells has been announced by the American company International Battery Company for the state of Karnataka in southern India.

With Google CEO Sundar Pichai vowing to invest US$10 billion in a digitalization fund for India to nurture artificial intelligence companies, and Amazon recently announcing that it will increase investment in the nation to US$26 billion by 2030, major tech companies have also warmed up.

The actions follow news that Apple may shift about one-fifth of its worldwide iPhone production to India over the next two years. There are now only 14 Apple vendors in India, compared to 151 in China’s mainland.

According to David Bach, a professor of strategy and political economy at the International Institute for Management Development, “the US government is keen on strengthening ties with India and encouraging companies like Apple and GE to invest there is a key part of this strategy.”

According to analysts, many businesses are attempting to lessen their reliance on China by exploring whether India is a workable substitute due to the size of its market, labour, and extensive digital network.

Before India’s economy was liberalised in 1991, however, a legacy of bureaucracy, rules, and red tape from the socialist era remained a barrier. Although complicated procedures have undergone significant improvement, many potential investors still must navigate them.

An excessive amount of fuss, according to Gautam Mahajan, a former president of the Indo-American Chamber of Commerce, has been made about the red tape problem in India. He claimed that foreign businesses that had done their research might easily set up shop.

According to industry analysts, the trend of US and European companies expanding their operations in India is only anticipated to grow in the next months as ancillary units emerge to support larger production endeavours like the GE-F414 jet engines.

Both the 500-aircraft order from Airbus placed by Indigo and the record-breaking 470 jets ordered by the Indian airline Air India are noteworthy because they are projected to lead to the establishment of several new manufacturing businesses.

The investments are happening, according to Manoj Joshi, a distinguished fellow at the Delhi-based Observer Research Foundation think tank, since the US is focusing on supply chain resilience and sees India as a partner.

“The depth of relations is not on the defence side alone, but there is an overall economic shift,” he claimed. “Globalisation 2 is taking place, and we see some benefits from working closely with the US, just as China did in Globalisation 1,”


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