India, U.S. trading dispute lingers ahead of Trump visit
WASHINGTON — American dairy farmers, distillers and drugmakers have been eager to break into India, the world’s seventh-biggest economy but a tough-to penetrate colossus of 1.3 billion people.
Looks like they’ll have to wait.
Talks between the Trump administration and New Delhi, intended to forge at least a modest deal in time for President Trump’s visit that begins Monday, appear to have fizzled. Barring some last-minute dramatics — always possible with the Trump White House — a U.S.-India trade pact is months away, if not longer.
“I’m really saving the big deal for later on,” Trump said this week. “I don’t know if it will be done before the election, but we’ll have a very big deal with India.’ The U.S. presidential election is Nov. 3.
For now, the failure to reach a deal, despite the pressure of an approaching summit, may reflect not so much the differences between Trump and Indian Prime Minister Narendra Modi as the similarities. Both men are fierce nationalists who favor protecting their own producers over opening their markets to foreign competition.
“You’ve got two leaders who are looking at trade very much as a zero-sum game,’ said Richard Rossow, a specialist in U.S.-India relations at the Center for Strategic and International Studies.
Long notorious for high trade barriers and a cumbersome bureaucracy, India had for the past two or three decades been slowly reforming and opening its economy. Under Modi, that trend has reversed.
Regarded as a business reformer when he took office in 2014, Modi has increasingly turned protectionist, matching Trump’s “America First” example with “India First” policies of his own.
“U.S. behavior on the trade front has pushed India in the opposite direction of where we could like it to go,’ Edward Alden, senior fellow at the Council on Foreign Relations, told reporters Friday.
One of Trump’s first acts was to withdraw from a 12country Asia-Pacific free trade pact negotiated by the Obama administration. Similarly, Modi last year abandoned another Pacific Rim trade agreement, worried that India would be overwhelmed by Chinese imports.
Modi may be even more sensitive about exposing Indian companies to foreign competition because his country is in an economic slump. The International Monetary Fund last month scaled back its expectation for India’s growth this year to 5.8% from the 7% it had expected back in October. Indian loan companies, struggling to collect on bad debts, have reduced lending, thereby squeezing Indian consumers.
The Trump administration escalated the pressure on India last year by denying some of its products preferential duty-free entry to the American market. In effect, that move raised tariffs on Indian imports.
The administration is annoyed by a deficit in the trade of goods with India that last year reached $23.3 billion.