India and the US will aim to further solidify their global strategic partnership in the inaugural two-plus-two dialogue on Thursday with a focus on significantly boosting military ties and ironing out differences over India's defence engagement with Russia and crude oil import from Iran, official sources said.
The two sides will also seek to finalise a pact on encrypted defence technologies, deliberate on ways to boost counter-terror cooperation, look for increasing engagement between their navies in the Indo-Pacific region and try to resolve tariff-related issues.
External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman will hold the twice-postponed talks with US Secretary of State Mike Pompeo and Defense Secretary Jim Mattis. Chairman of the US Joint Chiefs of Staff General Joseph Dunford will also be part of the US delegation.
As Secretary Pompeo arrives here tomorrow from Islamabad, India will also try to get his view about his engagement with the new government in Pakistan headed by Prime Minister Imran Khan, the sources said.
They said the focus of the talks will be to lift the strategic engagement between the two countries to a "whole of government approach" covering a wide range of areas for cooperation.
"The two-plus-two dialogue is core of the whole of the government approach and is the highest level political engagement between the two countries this year," said a source.
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In the talks, the sources said, India will also try to "sensitise" the US that any cut in import of Iranian oil in compliance with the US sanctions may impact the country's overall economy as the crude oil from that country is much cheaper.
India is also expected to apprise the US about the importance of the Rs 40,000 crore deal it is about to finalise with Russia to procure a batch of S-400 Triumf air defence missile systems. The US has been indicating that it does not want India to finalise the deal with Russia.
The sources said both sides will also discuss the long-pending Communications, Compatibility, Security Agreement (COMCASA). The COMCASA will help India obtain critical and encrypted defence technologies for Indian defence platforms from the US.
"Both sides are discussing the COMCASA. We cannot prejudge the outcome," said a source.
The two sides are also likely to deliberate on overcoming differences over issues relating to tariffs on still and aluminium besides trying to evolve ways to bridge trade deficit.
Talking about deepening trade ties, the sources said India is expected to procure oil and gas worth USD 2.5 billion in the current calender year.
India is also expected to raise its concerns over the Trump administration's decision to make changes in the H1B visa programme.
The sources said the US delegation will arrive here on Wednesday. Swaraj will have a separate bilateral meeting with Pompeo while Sitharaman will have a one-on-one meeting with Mattis on Thursday morning before the delegation-level two-plus-two talks.
Twelve officials from each side are expected to attend the talks which will be followed by a working lunch. In the afternoon, Swaraj, Sitharaman, Pompeo and Mattis will call on Prime Minister Narendra Modi.
On import of Iranian oil, the sources said India may also convey to the US that some of its refineries are dependent on certain kind of crude oil and making technical adjustments in them may require huge investments as well as time.
"We will take an independent decision on import of Iranian oil. It will not be under any compulsion. We are in touch with many other countries. We are examining various instrument for continuing to import petroleum products from Iran," said a source.
After withdrawing from the Iran nuclear deal, the US has imposed sanctions on Iran. It has told India and other countries to cut oil imports from the Gulf nation to "zero" by November 4 or face sanctions.
As ports in Iran also comes under the ambit of US sanctions, the sources said India was hopeful that it will be allowed to continue its engagement in development of the Chabahar port as it is a major link for trade with war-ravaged Afghanistan.
Iran is India's third largest oil supplier after Iraq and Saudi Arabia. The US's sanctions on import of Iranian petroleum products will be effective from November 4.
On possibility of the US granting a waiver to India on S-400 missile deal, the sources said it was for the Trump administration to take a call on it considering the strategic dimension of its relationship with the country concerned.
The US has imposed military sanctions against Russia under the stringent CAATSA (Countering America's Adversaries Through Sanctions Act) law for its annexation of Crimea.
India's position on the issue has been that it will go ahead with the deal notwithstanding American sanctions on military transactions with Moscow.
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