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Days after library jibe, Modi & Trump chat on phone, vow to strengthen ties

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Narendra Modi called up Donald Trump Monday, and the two leaders discussed the 2+2 summit and the delayed Trade Policy Forum.

New Delhi: US President Donald Trump and Prime Minister Narendra Modi had a phone conversation Monday, days after the former riled New Delhi with his off-the-cuff remarks about Indian aid to Afghanistan.

“The leaders agreed to strengthen the US-India strategic partnership in 2019 and exchanged perspectives on how to reduce the US trade deficit with India, expand security and prosperity in the Indo-Pacific, and increase cooperation in Afghanistan,” the White House said in a statement.

“They (Trump and Modi) expressed satisfaction at the progress in India-US strategic partnership in 2018,” the Ministry of External Affairs (MEA) added in a statement Tuesday.

“They appreciated developments such as the launch of the new 2+2 Dialogue mechanism and the first-ever Trilateral Summit of India, the US and Japan,” it added.

“The two leaders took positive note of growing bilateral cooperation in defence, counter-terrorism and energy and coordination on regional and global issues. They agreed to continue to work together for further strengthening India-US bilateral relations in 2019,” the MEA said.

The 2+2 summit between the countries’ defence and foreign ministers was a major highlight for the bilateral relationship last year. However, since the exit of US Defence Secretary James N. Mattis, India has been apprehensive about the roadmap for strategic and defence issues set during the September summit.

Trump and Modi last spoke over the phone in February 2018. The two leaders last met in Argentina in December 2018 for a trilateral meeting between US, Japan and India.

Also read: Bob Woodward’s White House expose just made the India-US talks more interesting

Trade deficit

Although Trump claims to share a warm relationship with Modi, India’s ties with the US have been strained of late, especially since March last year, when America imposed 25 per cent and 10 per cent duties on Indian steel and aluminium, respectively, amounting to around $235 million.

The US’ stated objective for the decision was to control the rising trade deficit with India and secure jobs for Americans.

Two-way trade in goods between India and US reached $74.48 billion in 2017-18, up 15.45 per cent from $64.51 billion in 2016-17. However, the trade deficit widened from $19.82 billion in 2016-17 to $21.26 billion in 2017-18, according to the Ministry of Commerce and Industry.

Although India has threatened to impose retaliatory tariffs on American goods, it has not done anything so far, having deferred a decision on the matter at least four times. The deadline to impose retaliatory tariffs has now been shifted to 31 January.

In their phone conversation Monday, Trump and Modi decided to discuss all these issues at the Trade Policy Forum, sources said.

After failing to make its earlier date in November last year over the steel-aluminium imbroglio, the forum is now expected to take place during the first week of February, sources told ThePrint. The annual event was last held on 26 October 2017, in Washington.

These matters will also be taken up during the visit of US Commerce Secretary Wilbur Ross, who is expected to visit India next month for the US-India Commercial Dialogue and US-India CEO Forum. This, the sources said, suggests the 31 January deadline for retaliatory tariffs may not hold.

Greater defence trade

Trump and Modi also welcomed the inclusion of India by the United States among the countries entitled to licence-free exports, re-exports, and transfers under License Exception Strategic Trade Authorization (STA-1) and also committed to explore other means to support further expansion in two-way trade in defence items.

The Strategic Trade Authorisation-1 (STA-1) status, which paves the way for high-technology product sales to a country, particularly in civil space and defence sectors, was granted to India by the US in April last year. India is the third Asian country after Japan and South Korea to get the status.

Also read: India-US relations survived World War & Cold War. They may not survive Trump

This report has been updated with a correction — that it was Narendra Modi who called up Donald Trump and not Trump who had called Modi. The error is regretted.

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