US, India at odds over trade as Trump heads for face with Modi
Trump administration officials on Friday acknowledged that US President Donald Trump's visit to India in a few days will not result in a good limited trade deal, saying they still have major concerns over India's trade barriers.
Hopes that the world's two major democracies could negotiate a "confidence building" deal in time for Trump's arrival Monday on a two-day visit have faded in recent days as dissimilarities over agriculture, medical devices, digital trade and proposed new tariffs fester, according to business groups.
US concerns that led this past year to the suspension of India's tariff free access for a few $5.6 billion in exports beneath the 1970s-era Generalized System of Preferences still remain, a senior Trump administration official told reporters on a conference call.
"We do want to make certain that we understand this balance right. We want to address a lot of concerns and we're nearly there yet," the official said, adding that Trump will probably discuss these concerns with Indian Prime Minister Narendra Modi.
Trade talks will continue, but new Indian tariff proposals targeted at strengthening the country's "Make in India" domestic manufacturing push have made them more challenging, the official said. Aside from growing protectionism, the Trump visit comes against the backdrop of India's multibillion-dollar purchase of a Russian missile shield system, which added friction to its ties with Washington.
India in its Feb. 1 budget proposal announced new import tariffs on medical devices, walnuts, toys, electronics and other products in a move targeted at reducing imports from China but affecting many US firms.
The new tariffs surprised US negotiators, especially as they were dealing with Indian counterparts to lessen the impact of India's price controls on US medical devices such as for example cardiac stents and knee implants.
"We are discussing those concerns and what we see a rise in barriers not really a decrease. This will surely appear among the leaders," the US official said. The official did not completely eliminate any trade related announcements through the trip, but said this is "really wholly dependent on what the Indians are ready to do."
US Trade Representative Robert Lighthizer, who has been leading the trade discussions, will never be among the united states delegation accompanying Trump, the official said. Earlier this month, Lighthizer cancelled a vacation to India to work through a package, even while India made some new proposals to improve US dairy and poultry access.
US Commerce Secretary Wilbur Ross is joining the trip, that will include announcements of commercial transactions in the energy and defence sectors, the officials said.
