From: Great Game India
According to leaked information of a high-level meeting, the United States and India’s failure to reach a long-expected trade deal on Sept. 24 has sparked fears of a full-fledged India US trade war.
On Sept. 24, U.S. Trade Representative Robert Lighthizer and Indian Commerce Minister Piyush Goyal met on the sidelines of the U.N. General Assembly, raising expectations that the two sides were poised to reveal a new trade deal following months of talks. But according to information leaked from the meeting as reported by Stratfor, the negotiators failed to agree on Indian concessions on information and communication technology, dairy, pharmaceuticals, agriculture, e-commerce, and data localization — in short, every bone of contention that have stymied an agreement for months. Still, U.S. President Donald Trump told visiting Indian Prime Minister Narendra Modi the same day that they would be able to announce a trade deal soon.
India, which is the tariff king — they called us, and they say, “We want to start negotiations immediately.” When Bob Lighthizer said, “What happened? He would never do this.” They said, “No, we want to keep your President happy.” Isn’t that nice? Isn’t that nice? It’s true. They have to keep us happy because they understand that we’re wise to what’s been happening.
India charges tariffs of 100 percent. And then, if we want to put a tariff of 25 percent on, people will call from Congress: “But that’s not free trade.” And I’d look back to people; I’d say, “Where do these people come from? Where do they come from?”
– Remarks by President Trump on the United States and India tariff issue.
In the absence of a deal, both countries will retain high tariffs against each other. In June, Trump revoked India’s tariff benefits under the Generalised System of Preferences after receiving complaints from the U.S. medical devices and dairy sectors about difficulties in accessing the Indian market. That move prompted India to institute tariffs in June against 28 U.S. goods, hurting apple exporters from Washington state and almond exporters from California, among others.
New Delhi wants to clinch a trade deal to allay its fears of fomenting a bigger trade dispute that could draw an investigation under Section 301 of the Trade Act of 1974, bring even higher tariffs on Indian products that, potentially, would involve a wider range of goods. However, India is unlikely to agree to any deal if it involves every trade issue that has split the countries for months. As a result, the two sides will continue to plug away in talks as Trump searches for some sort of trade victory to tout on the campaign trail ahead of next year’s presidential election.
Defense Technology and Trade Initiative
Main article: India US Strategic Partnership
At the heart of the Indo-US Strategic Partnership is what is known as the Defense Technology and Trade Initiative or DTTI. DTTI was launched in 2012 with Secretary Leon Panetta appointing the then Deputy Secretary of Defense Ashton Carter to lead the ambitious initiative “to pursue four pathfinder DTTI projects for possible co-development and/or co-production, as well as cooperation on aircraft carriers and jet engine technology”.
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