“Reduce dependence on China,” the US tells India

The US has urged India to end its "dependence" on China, saying that the country has the potential to replace China owing to its "trustworthiness", while also castigating China for "initiating" the border clash at Ladakh. It seems that the US and India have taken the same side in this new cold war.

China US India

US Secretary of State Mike Pompeo on Wednesday called on India to tamp down its dependence on Chinese goods, amid growing tensions between US and China.

In remarks to a US-India virtual business summit, Pompeo said New Delhi was a natural partner to Washington as “one of a few trusted, like-minded countries”.

US says India can attract global supply chains from China

“India has a chance to attract global supply chains away from China and reduce its reliance on Chinese companies in areas like telecommunications, medical supplies, and others,” he told the meeting organised by the US-India Business Council.

“India is in this position because it has earned the trust of many nations around the world, including the United States.”

Read more: India is using its economic clout to buy friends in its fight against China

US-China relations — already strained over the coronavirus pandemic, the situation in Hong Kong and trade — took a turn for the worse Wednesday when Washington ordered that Beijing shut its consulate in Houston.

Nuclear-armed neighbours China and India, the world’s two most populous nations, also have long had a prickly relationship.

But ties deteriorated significantly following a border clash on June 15 that left 20 Indian soldiers dead as well as an unknown number of Chinese casualties.

US has invested more than $40b in India so far

India has attracted over $40 billion in foreign direct investment (FDI) from the US, after the latest funding spree from major tech giants, such as Google and Facebook, according to a US-based business advocacy group.

American companies have boosted investment in India despite the coronavirus pandemic, the president of the US-India Strategic and Partnership Forum (USISPF), Mukesh Aghi, has said. According to his data, in recent weeks alone, the nation secured over $20 billion in funds, including those from Silicon Valley behemoths as well as investors from the Middle East, among other regions.

Read more: US has poured over $40 billion into India so far

“Year to date investment from the US, including the recent ones, is over $40 billion,” the head of the USISPF, which keeps track of the major US FDIs in India, said, as cited by media. “Investors’ confidence in India is high. India still remains a very promising market for the global investors.”

Earlier this week, Google announced that it will pile $4.5 billion into India’s Jio Platforms, part of the nation’s most highly-valued company, controlled by Asia’s richest man, Mukesh Ambani. Facebook invested $5.7 billion for a 9.99 percent stake in the company in April. In total, investors have bought over $20 billion-worth of shares in Jio Platforms.

American companies invest in India as an alternative to China

The rising interest of American tech giants in India comes as tensions continue to rise between Washington and Beijing. At the same time, the recent deadly clash at their disputed border in the Himalayas soured India-China relations, resulting in New Delhi’s ban of dozens of Chinese apps, its tightening of controls on imports from the country and a possible ban on Huawei from its 5G networks.

“It is harder and harder to do business with China,” said Mark Lemley, director of Stanford University’s program in law, science and technology. “There is also a growing sense that doing business with China involves troubling moral compromises.”

Read more: India-China tension must not rise at US’s instructions: ex-envoy

US distrust of Chinese tech continues to grow. President Donald Trump last week claimed credit for thwarting the expansion plans of Chinese tech company Huawei, and his administration has said it is “looking at” banning hugely popular short-form video app TikTok, owned by China’s ByteDance.

However, India is believed to have long been trying to cash in on the trade tensions between the world’s two biggest economies. Earlier reports signaled that New Delhi was busy creating a framework that will attract global investors looking to shift manufacturing from China.

Pompeo holds China responsible for border clash with India

Pompeo said the clashes were “initiated by” China’s armed forces and were another example of “unacceptable behaviour” from China’s ruling Communist Party.

Read more: India on front in US’s hybrid war against China

He praised India for banning 59 Chinese mobile apps, including TikTok, saying the video-sharing app “presents serious security risks for the Indian people”.

In the keynote speech to the summit, Indian Prime Minister Narendra Modi called on US companies to invest in his nation of 1.3 billion people, saying trade between the two countries would help the virus-hit world economy to bounce back.

GVS News Desk with additional input by other sources

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