India-US look forward to trade deal with Trump’s visit to India

indica News Bureau-

With US President Donald Trump’s visit to India, the premiers of the two countries hope to sign new trade deals before the 2020 elections in the US. Trump’s two day visit to New Delhi and Ahmedabad, with Indian Prime Minister Narendra Modi has been scheduled for February 24 and 25. Though so far the two countries have not had much progress when it comes to trade deals, despite several meetings held in Washington, New York and New Delhi in the past one and a half year, the meeting of the two premiers give new hope to the citizens.

“I expect that the trade deal—which has been previewed for months, but apparently at last reaching a conclusion—will be a major focus of the visit,” Alyssa Ayres, senior fellow at the Council on Foreign Relations said in an interview with CNBC.

According to reports by CNBC, experts say the constructs of the trade agreement — and whether it can even be called a trade deal — will be determined by the outcome of U.S. Trade Representative Robert Lighthizer’s trip to India this week. Defense, energy, medical devices and agriculture are among the items said to be on the table, according to Eurasia analyst Akhil Bery.

The New York Times reported on Monday that India was preparing to buy U.S. military helicopters from Lockheed Martin for $2.6 billion ahead of Trump’s visit. Since Modi was elected, the country has been steadily increasing its purchases of U.S. defense equipment.

″[Defense] been an area of significant progress in the relationship,” said Ayres.

In exchange for the purchase of 24 Seahawk helicopters, Jonah Blank of Rand Corp. expects that the U.S. may roll back tariffs on select American exports.

“The main deliverables are likely to include announcements of Indian purchases of US military hardware, particularly a $2.6 billion deal for 24 Seahawk (MH-60R) helicopters; in return, the US may announce a year (or more) of duty-free waivers for some of the 2,000 products on which it levied tariffs last year,” Blank said to CNBC.

Trade in tense times

After US revoked India’s special trade status in May last year, that gave India an access to $5.6 billion of exports, duty free, relations between the two countries have been tense. India also unveiled retaliatory tariffs on 28 U.S. items, including apples and almonds, after the revoking of the special status and since then tensions between the two countries have been escalating.

Though it seems that relations between India and US improved after the ‘Howdy, Mody!’, event in Houston in September last year, where around 50,000 Indian-Americans came out in large numbers to see Modi and Trump together at the NRG stadium.

Political experts also opine that Trump is incentivized to secure some type of deal with India before the presidential election, after signing of the “phase one” trade deal with China.

A senior governmental official in India tells CNBC Modi is also hoping to position Trump’s visit as political win at a time when he’s facing domestic pressures.

“Indians appear quite confident that President Trump has a very good shot at winning the upcoming Presidential election. I just spent 4 weeks in India, criss-crossing the nation. Nobody seems to be treating the visit as a “lame-duck,” said Rick Rossow, Wadhwani Chair in U.S.-India Policy Studies at CSIS, to CNBC.

Kashmir questions

Most policy experts do not think Trump will discuss Modi’s controversial citizenship law and his handling of the disputed region of Kashmir, both of which have drawn criticism and resulted in a wave of protests across the nation.

“What I do not expect Trump to raise, although many in the United States are paying increased attention to these issues, are the questions of Kashmir and ongoing detention of political leaders for nearly six months, as well as the ongoing protests concerning the new citizenship law,” said Ayres to CNBC.

“The visit is another sign that, despite contentious social issues in India driven by the ruling Bharatiya Janata Party, the Trump Administration takes the long view. The relationship is too important, both in economic terms and security terms, to put ties on ‘pause,’” said Rossow.

A senior Indian government official told CNBC that Modi’s administration is preparing a massive rally in Ahmedabad, Gujarat, called ‘Kem cho Trump’,  where both leaders will likely congregate in front of a massive crowd that will be similar to the ‘Howdy, Modi!’ event.