Context:
During a two-day visit to India, officials from the Office of the United States Trade Representative (USTR) urged major US technology companies to align with the ‘America First’ strategy, prioritising domestic investments and job creation. The visit occurred against the backdrop of ongoing negotiations on the long-pending India–US Bilateral Trade Agreement (BTA).
Key Highlights:
USTR Delegation & Objective
- Delegation led by Rick Switzer and Brendan Lynch.
- Aim: Resolve key differences delaying the India–US BTA.
Push for ‘America First’ Strategy
- US tech firms were encouraged to:
- Prioritise domestic AI infrastructure
- Create high-value jobs in the US
- Reduce dependence on outsourcing
- Emphasis on retaining leadership in emerging technologies like Artificial Intelligence (AI).
Investments by US Tech Companies
- Google:
- $15 billion investment in an AI data centre in Andhra Pradesh over five years.
- Parallel investment of $40 billion in Texas-based data centres.
- Indicates a dual-track investment strategy amid geopolitical pressures.
US View on AI & Strategic Leverage
- US aims to leverage investments by companies such as Google and Microsoft in India’s AI ecosystem.
- Emphasis on ensuring American participation in India’s AI stack, including data, compute, and platforms.
Trade & Energy Dimensions
- US highlighted its position as the world’s dominant consumption economy.
- Possible revocation of the additional 25% tariff imposed on India over Russian oil purchases in Q1 next year.
- India agreed to import 10% of its LPG from the US, under a deal signed last month.
Trade Negotiations Outlook
- India–US trade deal likely to take longer, possibly until the first half of next year.
Relevant Prelims Points:
- Issue: US push for domestic prioritisation amid global trade negotiations.
- Causes:
- Strategic competition in AI and high-tech sectors
- Domestic political emphasis on job creation
- Government Initiatives (US):
- America First strategy
- Benefits:
- Strengthens US technological leadership
- Challenges:
- Potential constraints on global outsourcing
- Trade frictions with partners like India
- Impact:
- Influences FDI flows, technology partnerships, and trade negotiations
Relevant Mains Points:
- Key Definitions:
- America First Strategy: Policy prioritising US domestic economic and strategic interests.
- Bilateral Trade Agreement (BTA): Framework to reduce trade barriers between two countries.
- AI Stack: Integrated infrastructure including data, compute, software, and platforms for AI development.
- Static + Conceptual Linkages:
- Geo-economics and strategic trade
- Technology as a tool of national power
- India–US Relations Angle:
- Cooperation vs competition in technology
- Energy trade and strategic autonomy
- Way Forward:
- Balance strategic alignment with economic interests
- Strengthen domestic AI capacity while engaging global partners
- Ensure mutually beneficial outcomes in the BTA through phased negotiations
UPSC Relevance (GS-wise):
- GS 2: International Relations – India–US Relations, Trade Diplomacy
- GS 3: Economy – Trade, Technology, Energy Security