Trump insists on putting his stamp on every deal, US-India trade talks not yet over: experts

New York, Jul 31 (PTI) US President Donald Trump insists on putting his stamp on every deal, which may require Prime Minister Narendra Modi to directly negotiate with him on the last elements of a trade pact, a former US trade negotiator has said, as experts noted the bilateral trade talks are not yet over.

Mark Linscott, Senior Advisor, US-India Strategic Partnership Forum and former Assistant US Trade Representative, suggested that there has been progress in trade talks between India and the US, given that multiple officials in the Trump administration, including Trump himself, have been hinting at a deal over the last few weeks.   "But the President insists on putting his stamp on every deal. For that to happen with India, I think it required Prime Minister Modi to reach out to negotiate the last elements directly with the President, including any headline commitments on purchases of energy and military equipment and investments in the US. For whatever reason, that did not happen. I'm hopeful that the two sides can resume negotiations in August,” Linscott said.

Trump on Wednesday announced the imposition of a 25 per cent tariff on all goods coming from India starting August 1, plus an unspecified penalty for buying Russian crude oil and military equipment.

The surprise announcement came a day after Indian officials said that a US trade team would visit from August 25 to negotiate a trade deal.

The announcement is being seen as a pressure tactic to get New Delhi to agree to demands made by the US, which has, in recent days, got favourable trade deals with major partners like Japan, the UK and the European Union.

Linscott said the references to Russia “certainly complicate the situation” and add a whole new dimension to the negotiations, and “it’s not clear how this set of issues can be added to a trade package.” Linscott, who served as the former Assistant US Trade Representative for South and Central Asian Affairs and for WTO and multilateral affairs, stressed that Delhi and Washington have substantial shared interests in restarting the negotiations and seeking to conclude an interim deal.   “It would be a feather in the caps for both leaders and would provide increased impetus" to advance negotiations on a larger and comprehensive Bilateral Trade Agreement, as Trump and Modi committed to in February, he said.

"The stakes remain high – the US is India's largest foreign export market and India is the growth market for the future for the United States. Failure to conclude trade agreements will be a drag on economic growth in both countries,” said Linscott.

Aman Thakker, Vice President at Washington DC-based business consulting and advisory firm The Asia Group, said it was unfortunate that the US-India deal on tariffs could not be finalised after both sides seemed very close to a pact earlier this month.

In a statement, Thakker said while India pushed for an overall US tariff rate of 13-15%, President Trump reportedly sought a rate closer to 20%, to which India was not ready to agree. The US also sought greater market access to key sensitive sectors such as agriculture and dairy, and while India reportedly made some concessions in these areas, those were not enough, he said.

Thakker added that while the inability to reach a deal on reciprocal tariffs before the August 1 deadline is a setback, this current phase of negotiations is part of a broader bilateral trade agreement (BTA) that Trump and Modi announced when they met in Washington in February.  Negotiations to take the BTA forward are continuing apace, as of now, with a USTR negotiating team visiting New Delhi in August. "However, given the importance President Trump has placed on trade, it will be even more important for both sides to be ready to deliver a more comprehensive trade agreement that could be delivered on the sidelines of the Quad Leaders’ Summit scheduled for this fall,” he said.

Furthermore, it will be important for both sides to put some wins on the board while trade negotiations continue, he said.

Early progress on other key bilateral initiatives, such as negotiations for the 10-year Framework for the US-India Major Defence Partnership, advancing legislation in the Indian Parliament to amend India’s nuclear liability law, and the formal launch of Transforming the Relationship Utilizing Strategic Technology (TRUST) initiative, can provide a ballast for the relationship while the BTA negotiations continue, he said.  Basant Sanghera, Managing Principal at The Asia Group, said the US-India trade talks are not yet over. “The winds may very well shift in the other direction depending on the mood at the White House. But, at the moment, the best course of action for New Delhi is muddling through,” he said.

"The fact that the President’s comments came amid an Indian Parliamentary debate has made the situation more complicated. But in the meantime, working-level negotiators continue to work on other aspects of a larger trade deal. For New Delhi, showing it is willing to eat higher tariffs, at least temporarily, may end up creating more political space domestically,” Sanghera said.

Sanghera termed Trump’s announcement of tariffs on India as a minor and temporary setback.

“His repeated linking of trade with the Indo-Pak ceasefire in May has led to a growing perception among the Indian strategic commentariat that Washington has 're-hyphenated' India-Pakistan ties. This has become an unnecessary distraction for the larger relationship,” he said.

“The breadth and scope of US-India ties give them a certain degree of resiliency. From space and defence to counterterrorism and technology, there are many lines of effort moving forward. But it will take active leadership from New Delhi and Washington to manage expectations and refocus on the areas of convergence in the partnership, while navigating the headwinds,” Sanghera said. PTI YAS ZH ZH ZH