A proposed trade deal between India and the US was not “stuck” and both sides mutually agreed “not to rush” into it, official sources in New Delhi said hours after American president Donald Trump suggested that such a pact may not be sealed during his maiden India visit as he is “saving the big deal” for later.
Ahead of his two-day visit, starting from February 24, Trump also told reporters in Washington that India has not treated the US “very well” on the trade front but “I happen to like Prime Minister Modi a lot.”
Full-scale preparations are afoot in New Delhi, Agra and Ahmedabad to welcome Trump, his wife Melania Trump and a high-level delegation from the US administration. The first couple of the US will begin their much-anticipated India visit from Ahmedabad, where they will attend “Namaste Trump” event at the newly built Motera Cricket Stadium. Prime Minister Narendra Modi will be present at the event.
A number of deals including the USD 2.6 billion contract to procure 24 naval helicopters from the US by India could be fructified during Trump’s nearly 36 hour-long scheduled visit that is aimed at further invigorating defence, trade and strategic ties, official sources said.
India does not expect that Jammu and Kashmir will figure in the talks as the US State Department has already said that it is an issue which should be resolved bilaterally between India and Pakistan, sources noted.
On the trade deal, a source said, “we do not want to rush into a deal as it will have long-term economic consequences. We do not want to take decisions for short term.”
Besides the trade deal, sources said both the countries are also looking at a Free Trade Agreement for deeper trade and investment ties, adding India will seek inclusion of India under the Generalized System of Preferences by the US.
During an interaction with reporters at the Joint Base Andrews outside Washington, Trump said, “well, we can have a trade deal with India, but I’m really saving the big deal for later on.”
“We’re doing a very big trade deal with India. We’ll have it. I don’t know if it’ll be done before the election (in November), but we’ll have a very big deal with India,” he added.
Trump, forcefully pursuing his ‘America first’ policy, has previously described India as a “tariff king” for imposing “tremendously high” tariffs on American products.
The US president will be accompanied by a high level delegation which is likely to include Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross. However, there is uncertainty surrounding the visit of US Trade Representative Robert Lighthizer, the point-person for trade negotiations with India.
Multiple rounds of telephonic conversations have taken place between Commerce Minister Piyush Goyal and Lighthizer in the past few weeks ahead of the presidential visit.
India is demanding exemption from high duties imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their Generalised System of Preferences (GSP), greater market access for its products from sectors including agriculture, automobile, auto components and engineering.
On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items and medical devices, and cut on import duties on some ICT products. The US has also raised concerns over high trade deficit with India which was USD 16.9 billion in 2018-19.
Though Trump is not happy with the bilateral trade ties, he praised Prime Minister Narendra Modi and said he is looking forward to his visit to India.
“I happen to like Prime Minister Modi a lot,” Trump said.
“He (Modi) told me we’ll have seven million people between the airport and the event. And the stadium, I understand, is sort of semi under construction, but it’s going to be the largest stadium in the world. So it’s going to be very exciting… I hope you all enjoy it,” he told reporters.
Trump was referring to a scheduled joint public rally with Modi in Ahmedabad, capital of Gujarat.
Meanwhile, the US-India Strategic and Partnership Forum (USISPF) in a report said the latest quarterly data depict continuation of overall positive bilateral trade trends. The third quarter data reflects some downslide in growth rates.
“It may be due to several reasons, including the unexpected economic slowdown in India’s economic growth, impact of US-China trade war, GSP withdrawal from the US side and retaliatory tariffs on specific US goods from the Indian side,” it said.
According to the report, the data available for the first three quarters of 2019 (January-September) pulled the overall growth rate in cumulative bilateral trade down to 4.5 per cent from 8.4 per cent registered for the first two quarters.
Goods and services trade performance in third quarter was dismal at -2.3 per cent, in contrast with the impressive 9.6 per cent growth witnessed for the first two quarters of the year; while trade in services was up two per cent goods trade dropped five per cent, the report said.
The cumulative US-India trade in goods and services (USD 110.9 billion) for the first three quarters of 2019 increased 4.5 per cent with US exports and imports growing at four percent and five per cent respectively.
The US remains the top trading partner for India in terms of trade in goods and services, followed by China.
The US goods exports to India were mainly in mineral fuels, precious stones, and aircraft. The US faces tough competition with China in the Indian market in areas such as electronics, machinery, organic chemicals and medical devices.
Source : Economic Times