Sanctions and trade to make for touchy talks

NEW DELHI: Sanctions and stents will be among the sources of contention at the coming India-US 2 + 2 strategic and economic dialogue in Washington in July.

At the top of the list will be the US’s sweeping Countering America’s Adversaries Through Sanctions Act (CAATSA) that imposes sanctions on countries which trade with Russia and Iran.

External affairs minister Sushma Swaraj said on Monday that India will only abide by sanctions by the UN. New Delhi also plans to announce its purchase of the Triumf S-400 missile defence system from Russia this year.

CAATSA gives exemptions for non-significant purchases and if Russia’s “behaviour” is shown to change. However, US sources say sanctions could kick in for purchases as low as $15 million.

The US is expected to point a finger at India’s applied tariffs, which are nearly four times those of the US, the arbitrariness of India’s price controls on medical device manufacturers, its new

INDIA MAY FIND IT HARDER TO ENSURE TRADE ISSUES DO NOT COMPLICATE STRATEGIC RELATIONS GIVEN THE TRUMP MERCANTILIST ATTITUDE OF THE US UNDER TRUMP.

data localisation policies and the WTO incompatibility of Indian export subsidies.

India will also worry about the US review of its textile export privileges under the general system of preferences programme. The US will note India’s actions against medical devices and other exports are the reason for the review.

However, New Delhi believes the US has gone too far with CAATSA. It is being driven by the US Congress and even President Donald Trump has expressed disapproval. A number of US treaty allies such as Indonesia, who use Russian weapons, will be affected as will many US firms that buy parts and services from Russia.