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Fresh from Howdy, Modi! bonhomie, PM & Trump to get cracking on easing trade tensions

Trade continues to remain a difficult spot in US-India ties, especially amid Trump’s campaign to bridge the US’ trade deficit with countries around the world. 

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New Delhi: If the first leg of Prime Minister Narendra Modi’s ongoing visit to the US was all about a show of bonhomie and bonding with President Donald Trump, as seen at the Howdy, Modi! event Sunday, the coming five days will be all about hard negotiations and business.

When Modi and Trump meet Tuesday on the sidelines of the United Nations General Assembly (UNGA), they will seek to iron out some of the contentious issues dogging bilateral trade. 

At their meeting, both leaders are expected to unveil a small trade deal, sources told ThePrint, though the US is also likely to raise Kashmir, where the communication lockdown entered its 50th day Monday.

Trump’s meeting with Modi will come a day after he meets Pakistan Prime Minister Imran Khan, who flew into the US Sunday. Modi reached New York after the mega show at Houston, where he and Trump addressed a crowd of over 50,000 Indian-Americans. 

Also Read: Modi and Trump likely to unveil ‘limited’ India-US trade package this month 

A package for the US

Trade continues to remain a difficult spot in US-India ties, especially amid Trump’s campaign to bridge the US’ trade deficit with countries around the world. 

Trump believes domestic US industry has suffered as countries like India and China push their exports into the country without buying enough US goods.  

With no headway with Beijing in terms of addressing President Trump’s concerns, Washington is now looking at New Delhi to secure a package.

The package, which will be unveiled during PM’s weeklong visit there, is expected to give greater market access to America’s farm produce and a range of information and communications technology (ICT) products, including mobile phones. 

New Delhi may also give some relaxation on the import of American medical devices.

The US, meanwhile, is expected to waive the additional tariff of 25 per cent and 10 per cent on import of steel and aluminium products, respectively, which it had imposed under Section 232 of the US Trade Expansion Act of 1962 on national security grounds last year.

The US may also reinstate the trade benefits it had granted on some Indian products under the Generalised System of Preferences (GSP) programme, which will benefit Indian shipments worth $6 billion to the US. India was removed from the GSP earlier this year.

“It is incredible to witness this growth in our ties and we commend both leaders who have started off this trip on a very solid footing,” Mukesh Aghi, president and CEO of the nonprofit US-India Strategic Partnership Forum, told ThePrint.

“We are looking forward to some tangible outcomes from the bilateral meeting in New York where the two leaders will discuss our trade ties that have seen an upward trajectory in the last decade,” he added.

Issues to be resolved 

The US and India are fighting out a plethora of trade disputes at the World Trade Organization (WTO), which might see an amicable end after both leaders meet.

Besides, India also raised duties on 28 American goods in June this year in response to the action taken by the Trump administration against New Delhi.

Both sides also did not have the annual US-India Trade Policy Forum dialogue last year, with no signs so far that it will be held this year either.

During his speech at ‘Howdy, Modi!’ Sunday, the Prime Minister called President Trump a “tough negotiator” and praised his “art” of making “deals” even as he hinted at a potential trade deal between both countries.

“We shouldn’t overstate its [Howdy, Modi!] impact on a bilateral relationship that continues to face some notable challenges,” said Michael Kugelman, deputy director of the Asia programme and senior associate for South Asia at the Washington-based thinktank Wilson Center.

“Yes, the bonding on display between Modi and Trump has delivered a much-needed shot in the arm to the US-India relationship, but, despite the rumblings of a trade deal, the two sides certainly aren’t out of the woods just yet,” he added.

According to Alyssa Ayres, deputy assistant secretary of state for South Asia in the Obama administration, the event did not yield anything substantial for both sides.

“It looks like we need to wait for later this week (if at all) to see if the much-discussed possible trade deal will actually reach a conclusion,” said Ayres, senior fellow for India, Pakistan and South Asia at the New York-based thinktank Council on Foreign Relations.

Also Read: With Trump’s presence at ‘Howdy, Modi!’, the Prime Minister pulled off a political coup

Pakistan to feature in bilateral talks

Meanwhile, sources said, the issue of Kashmir and crossborder terrorism with reference to Pakistan will also considerably feature in the bilateral talks between Trump and Modi.

“There is the continued awkwardness in the US-India ties, of the US ramping up cooperation with Pakistan. For all the gushing praise that Trump piled on Modi, he’s about to meet with Modi’s bitter rival,” Kugelman said.

President Trump has stated several times that he is willing to “mediate” on the issue of Kashmir between New Delhi and Islamabad, but Modi has reiterated India’s policy that the dispute doesn’t warrant third-party intervention.

While Modi is expected to reiterate its stance once again, the US will question India on the continued lockdown in the Valley. Washington has also urged both sides not to escalate tensions over Kashmir.

Also Read: The importance of Houston — why this Texan city was picked to host Howdy, Modi! show


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