Mike Pompeo arrives in India: Despite trade tensions, mixed signals from US, expect New Delhi to continue 'issue-based' policy

Editor's Note: This article was originally published on 21 June. It has been republished after US secretary of state Mike Pompeo arrived in India for his three-day state visit.

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Indian strategic circles are abuzz with speculation about the possible outcomes of the visit of US secretary of state Mike Pompeo, at a time when trade tensions with the US are hogging media headlines in New Delhi even as the Pentagon has declared the India-Pacific as its "priority theatre".

To some, there is something of a mismatch here. At the meeting of the Shanghai Cooperation Organisation, India signed on to “open, inclusive, transparent and rule-based” trade, almost identical language to that used by the US in its Indian Ocean strategy. That could be part of a new “issue-based” policy under Foreign Minister Subrahmanyam Jaishankar. Simply put, Delhi will sign on to what suits Delhi best at any given time.

File image of US secretary of state Mike Pompeo. Reuters

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As of now, trade wars are probably the worst thing that could happen to a new government that is prioritising the Indian economy. That emphasis was apparent as the prime minister recently opted to personally chair two committees, one on investment and the other on employment. Strictly speaking, it is the Commerce Secretary’s brief, and not Pompeo’s to talk about trade. The tariff war however, is beginning to look increasingly like a poker game with governmental characteristics. This became evident when US president Donald Trump announced  removal of India from a list of countries that benefitted from the Generalised System of Preferences, despite some 24 member of the US Congress urging against such a move.

India’s Finance Minister Piyush Goel seemed to accept this ‘gracefully’, only to then take up a long delayed decision to impose retaliatory tariffs on 29 goods. Though the GSP impacts only about $190 million of annual trade, small traders are hurting, with exports of semi-precious stones falling by 24 per cent. These small entrepreneurs are the target for new welfare schemes of the new government, and a key constituency.

Besides, the GSP follows a series of other protectionist moves that have affected India tangentially as an outflow of the US-China tariff war and against Iran, a long time friend and ally. The Modi government can’t be seen to be backing off, and Pompeo can expect to see some digging from India on the issue.

Being a US 'near ally' can be a complicated business in other ways too. Pompeo is likely to flag the projected buy of Russia S-400 air defence systems. There is logic to the US position that growing inter-operability between US and Indian forces will be reversed if there are Russian systems 'listening in' into secure communications networks. But Delhi is probably unwilling to admit just how dependent its forces are on Russia even in terms of keeping its existing capabilities running, particularly in the Indian Army. In addition, it’s far easier to get Moscow to be part of the “Make in India” programmes than US companies bound by red tape almost as bad as New Delhi’s.

India will buy American, if there’s an assurance that Delhi doesn’t again come up against the Red, White and Blue in sanctions or tariff wars. That’s probably not an assurance that Pompeo can give. No, India will probably not give up on Moscow, yet.

Meanwhile, there is obviously good news on the defence front – for the Trump Administration at least. Reports note a ‘G-to-G’ deal for an additional ten Boeing P-10 aircraft which the Indian Navy has found ideal for patrolling of the India’s large coastline and extended interests; Pompeo’s speech at the recent US-India Business Council also flagged the sale of top line fighters to give India the edge to be a "full-fledged security provider throughout the India-Pacific". Delhi also desperately needs new fighter aircraft. But it is equally concerned about the F-16’s that Pakistan used against its military installations, after it targeted terrorist camps at Balakot. A security provider in the East shouldn’t have to look over its back at the west. For Delhi, Pakistan is a dangerous irritant. For the US, it’s a nemesis haunting its plans to exit from Afghanistan. Islamabad’s attempts to trade peace in Afghanistan with concessions from India will and should be resisted entirely. That’s a red line New Delhi is not likely to change.

Pompeo’s advantage is that he’s talking to a counterpart who knows not just exactly what he wants, but the extent of what the US has to offer. Jaishankar has been on this beat longer than anyone else, and has the confidence of a prime minister bent on getting things done, and quickly.

One would imagine that the Trump Adminstraiton as a whole would see that the time for an upping of India-US relations has never been better. Sadly, the signals from Washington continue to be mixed. New restrictions could turn cautious defence planners towards other suppliers, and there are plenty waiting to court a big time buyer for not just fighters aircraft, but a whole panoply of other equipment. Meanwhile, expect a number of actors, some in India, and some within the US itself, to try and sabotage a growing relationship that’s headed in the right direction. Forget the dialogue to rationalise this, when push comes to shove, its common interests that matter.