India not treating US 'very well' on trade front, but I like PM Modi a lot, Donald Trump says ahead of first visit

India does not treat the United States well, American President Donald Trump alleged early on Wednesday, even as he confirmed that the much-anticipated trade deal between the two nations would not be inked during his visit to Ahmedabad and New Delhi next week.

Trump quickly added that he happened to like Prime Minister Narendra Modi a lot. He also said the US would clinch “a very big trade deal” with India, not during his visit to the country on Monday and Tuesday, but in future.

New Delhi indicated that the US president’s visit to India might see Modi and Trump affirming commitment to continue negotiations for a larger Free Trade Agreement.

“Well, we can have a trade deal with India, but I’m really saving the big deal for later on. We’re doing a very big trade deal with India. We’ll have it,” Trump told journalists at Joint base Andrews in Maryland, early on Wednesday. “I don’t know if it’ll be done before the (presidential) election (in the US), but we’ll have a very big deal with India,” he added, carefully avoiding committing a time limit for clinching the much-awaited pact.

A source in New Delhi later said that Commerce Minister Piyush Goyal and US trade representative Robert Lighthizer, who had been leading the negotiations for the agreement, had decided against rushing into a deal just on the eve of the American president’s visit.

The two sides wanted to reach an understanding to ensure an outcome that would balance the interests of both sides, said the source, adding that negotiations had involved deciding on several complex issues “having long-term economic consequences and impact on lives of people”. “We look to the future and seek to achieve a win-win solution for both sides”.

Goyal and Lighthizer had agreed to continue talks and look at a larger Free Trade Agreement between India and the US, said the source.

Trump’s complaint

“We’re not treated very well by India, but I happen to like Prime Minister Modi a lot,” said Trump, reiterating his complaint about New Delhi imposing high tariff on imports from the US.

India-US bilateral trade has been growing at an average rate of 10% year-on-year and grew from $100
billion in 2014 to $160 billion in 2019.

But ever since Trump took over as president in 2017, the US has been complaining about imbalance in its trade with India. In February 2018, Trump expressed displeasure over the high import duty imposed by India on motorcycles like the ones made by Harley-Davidson and other US companies. During his visit to New Delhi in May 2019, American Secretary of Commerce Wilbur Ross pointed out that the US was India’s largest export market, accounting for about 20% of its total export. Yet, he added, India was only the 13th largest export market of the US “due to overly restrictive market access barriers”.

New Delhi played down Trump’s complaint. “He and the US trade establishment have always maintained that India is a high-tariff country... We don’t necessarily agree. Our tariffs are not higher than other developing countries. Japan and Korea have higher tariffs,” a government source in New Delhi said.

He added that the yardstick applied to measure tariffs as high or low should be different for a developing country like India from that of a developed nation
like Canada.