Donald Trump to Visit India in February to Sign a Trade Deal
ECONOMY /
A year after expressing his
inability to attend the Republic Day parade in the Indian capital, the US
President Donald Trump will be visiting India in February to sign a short term
trade deal, paving the way for a longer-term agreement on a later date.
Officials from New Delhi and Washington are working out mutually convenient
times for the US President Donald Trump’s visit to India.
According to trade observers,
Trump wants to counterbalance China with India, which has a considerable market
and offers high potentials for US investors. The US, which is a prominent
supplier of arms to India, is keen to have greater access to the vast Indian
consumer market. The trade agreement with India will be an essential
achievement of the Trump administration with the US President seeking a second
term in November. With the Modi government, struggling with a slowing Indian
economy and keen to attract investment to revive it, a trade package with the
US. would facilitate better market access to both countries.
During Prime Minister Narendra
Modi’s visit to the United States (US) in September 2019, President Donald
Trump had made an appearance at the “Howdy Modi” event in Houston, and a trade
deal was expected to be announced by the two leaders. But, the two sides
differed on some issues before that landmark trip ended. The two sides have
been in talks to resolve trade differences, and Trump’s visit could pave the
way for an ambitious Free Trade Agreement.
Why the relationship soured
The deal will help to expand
India’s exports, especially if the Generalised System of Preferences (GSP) is
revoked. Tensions over trade tariffs surfaced last year when the Trump
administration hiked tariffs on imports of steel and aluminum from several
countries, including India. Then, in May 2019, Trump abolished the trade
privileges under the US Generalized System of Preferences program, claiming
India is not allowing “equitable and reasonable market access” to American
goods. India struck back two weeks later, hiking tariffs on 28 items imported
from the US worth around USD 220 million.
It may be recalled that since
India opened up its economy in 1991, the US-India bilateral trade has grown at
a spectacular rate. India- US bilateral trade has increased significantly in
the last decade, and it touched approximately USD 160 billion in 2019. The US
is also a prominent investor and a significant source of FDI. If the trade deal
is concluded, then an investment deal can follow. Mike Pompeo, the United
States Secretary of State on a short visit to New Delhi in 2019, said American
investments worth trillions of dollars are waiting to be invested in India.
Trump followed that up in Osaka by promising India “huge things… in terms of
manufacturing, in terms of trade,”- without providing details. India needs to
increase employment which only manufacturing can provide, and an increase in
exports is a must for it.
The United States and India
consider one another as critical strategic partners to advance common interests
regionally and globally. The two nations are keen to transform the long
friendship between two of the largest free and open democracies into a global
strategic partnership. With
India’s growing integration in the worldwide economy, the deal is likely to be
a win-win position for both the nations, with India getting access to markets
where China was the dominant player. Donald Trump to Visit India in February to Sign a Trade Deal
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