As the US President’s much awaited India visit will start in two days to come, the United States on Friday said it was unlikely that a trade deal would be inked with India during President Donald Trump’s upcoming visit to the country as the concerns that led to India’s removal from the Generalized System of Preferences still persist.
“The concerns that led to the revocation, suspension of India’s Generalized System of Preferences (GSP) access remains a concern for us. And to remind, it was really the failure of the Indian government to provide equitable and reasonable access to its markets in numerous sectors,” a senior administration official told reporters during a conference call.
Trump had earlier on February 19, said that he is “saving the big deal” with India for later and he “does not know” if it will be done before the presidential election in November, clearly indicating that a major bilateral trade deal during his visit to Delhi next week might not be on the cards.
The dispute between the two countries dates back to 2019, when the US President had suspended India’s special trade designation after PM Modi had put price caps on medical equipments such as cardiac stents and knee implants. Indian Prime Minister had introduced new data localization requirement and e-commerce restrictions.
President Trump along with his wife and First Lady Melania Trump will be on a two-day visit in India on February 24 and 25 at the invitation of Prime Minister Narendra Modi.
US Trade Representative Robert Lighthizer, who has been negotiating a trade deal with India, is not travelling with Trump on the India trip. In fact, he had cancelled his earlier trip to India as well.
“We continue to talk to our Indian colleagues about addressing these market access barriers. Our trade teams, led by the USTR, have been in touch with their counterparts over the past several weeks. That engagement will continue,” the official said.
“The trade and economic relationship with India is critically important to the United States, and I think also access to the United States market is critical to the Indian government. We do want to make sure that we get this balance right. We want to address a bunch — a lot of concerns, and we’re not quite there yet,” the official said in response to a question.
The high-powered American delegation led by Trump will likely have discussion with Prime Minister Narendra Modi about these concerns and continue the discussion beyond this visit, said the senior administration official.
The official said a number of announcements coming from India in the past several weeks, are making the discussions a bit more difficult perhaps.
“Recent announcements on Make in India have made the protectionism concerns in India even greater. So we will be discussing those concerns. And what we see as an increase in barriers, not a decrease, this will certainly come up among the leaders,” the official argued.
“Whether or not there will be announcement on a trade package is, really, wholly dependent upon what the Indians are prepared to do. That said we have a number of significant commercial deals, which are of great significance that we’re very pleased to announce in a number of key sectors,” said the senior administration official.
The senior administration official said “the Make in India push of the Indian government, has made the protectionism concerns” even more of a concern to the United States.
“We’ve seen India’s budget process recently used to raise tariffs on products of interest in the United States. We continue to see important divergences on e-commerce and digital trade. So it’s a pretty wide scope, frankly, of important service and goods access barriers that we need to address,” the official said.
This will be US President Trump’s first visit to India. It will be his fifth meeting with PM Modi in eight months. There are three legs to the US President’s visit with his first stop at Ahmedabad, followed by Agra and finally Delhi.
The Ministry of External Affairs on Thursday said the ‘Namaste Trump’ event scheduled to be held in Ahmedabad for the American President next week will be similar to the ‘Howdy, Modi!’ event held in Houston last September.
The ‘Namaste Trump’ event is being organised by the Donald Trump Nagrik Abhinandan Samiti.
A high-level delegation is likely to accompany President Trump to India including Senior Advisor Jared Kushner, US Trade Representative Robert Lighthizer, NSA Robert O’Brien, Secretary of Treasury Steve Mnuchin, Secretary of Commerce Wilbur Ross and Director, Office of Management and Budget Mick Mulvaney.
Meanwhile, India hopes to sign a trade deal with the United States during Trump’s visit. However, the US president said on Wednesday that he might postpone the trade agreement till the US presidential elections.
However, Trump on Friday said he and Modi will speak on trade issues.
Speaking about the same, Trump said: “I am going to India next week, and we are talking trade. They have been hitting us very hard for many years. I really like PM Modi but we gotta talk a little business. One of the highest tariffs in the world is India.”
Apart from trade-deal, President Trump’s upcoming visit to India demonstrates the strong and enduring ties between the two largest democracies of the world, the White House said today.
“The President is going to India as a demonstration of the strong and enduring ties between our two countries,” a senior administration official told reporters less than 48 hours before Trump departs for his maiden presidential trip to India.
“These are ties based on shared democratic traditions, common strategic interests, and enduring bonds between our people. And, in part, this has been exemplified by the very close relationship between the President and Prime Minister Narendra Modi,” said the official, requesting anonymity.
“The visit will focus on several key areas. First, we’ll focus on building our economic and energy ties,” the official said, noting the two-way trade in goods and services exceeded USD 142 billion in 2018.
Observing that India is the fifth-largest economy in the world with massive energy needs, the official said the US is ready to help India meet those demands.
In 2016, energy exports from the US to India grew by 500 per cent to nearly USD 7 billion.
During the trip, the two countries will focus on defense and security cooperation to fight terrorism and promote a free and open Indo-Pacific.
The US wants an India that is strong with a capable military that supports peace, stability, and rules-based order in the Indo-Pacific region, the official said.
“Indeed, India is a pillar of our Indo-Pacific strategy, and we continue to work together to promote this vision of a free and open international system based on market economics, good governance, freedom of the seas and skies, and respect for sovereignty,” said the senior administration official.
Over the last three years, President Trump and PM Modi have developed a personal friendship and in 2019, the duo met four times including their joint address before a strong 50,000 crowd of Indian-Americans in Houston.
(With agency inputs)