United States President Donald Trump will arrive in Ahmedabad on Monday to commence his two-day visit to India – a visit, which is likely to be high on optics, but low on substance.
"The ties between our two nations are grounded in our common values and our shared commitment to democracy. We are governed by the rule of law, guided by a commitment to justice, and strengthened by our love of liberty," a tweet by White House quoted United States President just after his special aircraft – 'Air Force One' – departed from the Joint Base Andrews near Washington.
Trump and his wife and First Lady of the United States, Melania Trump, will be received by Prime Minister Narendra Modi, himself, at the Sardar Vallabhbhai Patel International Airport in Ahmedabad. Prime Minister and the United States President will then drove to Sabarmati Ashram to pay homage to Mahatma Gandhi. They will later address a rally at a newly-built cricket stadium across the Sabarmati River. The rally – titled "Namaste Trump" – will be much like the "Howdy! Modi" event in Houston on September 21 last, when Prime Minister was joined by the US President to address an audience of about 50000 Indian-Americans.
Trump repeatedly said over the past few days that Modi had promised him a rousing welcome by about six to 10 million people in Ahmedabad. He reiterated it just before leaving White House on Sunday.
"Well, I look forward to being with the people of India. We’re going to have many millions and millions of people. It’s a long trip," said the US President. "But I get along very well with the Prime Minister, Prime Minister Modi. He’s a friend of mine. I committed to this trip a long time ago, and I look forward to go — going."
"We’re taking — as you know, the First Lady is coming. Some of you are coming. I hear it’s going to be a big event. Some people say the biggest event they’ve ever had in India. That’s what the Prime Minister told me. This will be the biggest event they’ve ever had," he said, adding: "So it’s going to be very exciting. I’m going to be there one night. That’s not too much."
Foreign Secretary Harsh Shringla, however, recently said in New Delhi that "tens of thousands" people would line up along the roads to welcome President and First Lady of the United States in Ahmedabad.
The stadium, where the "Namaste Trump" rally would take place, could accommodate about one lakh more people.
There may be a difference in perception about the numbers, but the grand Modi-Trump show in Ahmedabad on Monday is undoubtedly going to be the biggest ever event held in India to welcome a foreign leader.
And, it is perhaps going to be the only highlight of US President’s visit to India. For, with the much-awaited trade deal being taken off the table, for now, the formal talks between Prime Minister and the US President in New Delhi on Tuesday is unlikely to have a big-ticket breakthrough, except formal announcement on some defence deals and five Memorandums of Understanding in areas like Intellectual Property Rights, Homeland Security and Energy.
Collapse of trade talks
India-US bilateral trade has been growing at an average rate of 10 percent year-on-year and grew from $100 billion in 2014 to $160 billion in 2019. Two-way investment between India and the US reached $60 billion in 2018. Over 2,000 US companies have a presence in India, while more than 200 Indian companies have invested $18 billion in the US, creating nearly 1,00,000 direct jobs, Taranjit Singh Sandhu, New Delhi’s envoy to Washington D.C., said recently.
But, ever since Trump took over as American President in January 2017, the US has been complaining about the imbalance in its trade with India. Trump in February 2018 expressed his displeasure over high import duty imposed by India on motorcycles like the ones made by Harley-Davidson and other US companies. During his visit to New Delhi in May 2019, American Secretary of Commerce, Wilbur Ross, pointed out that the US was India's largest export market and accounted for about 20 percent of its total export. Yet, he added, India was only the 13th largest export market of the US, "due to overly restrictive market access barriers".
New Delhi and Washington D.C. have been negotiating a trade deal for the past several months. The two sides had initially planned to sign it on September 24 last, when Prime Minister and US President had met in New York on the sideline of the United Nations General Assembly (UNGA) – just days after they had appeared together at the "Howdy! Modi" rally in Houston. But notwithstanding bonhomie between Modi and Trump, Commerce Minister Piyush Goyal and US Trade Representative Robert Lighthizer had failed to narrow differences on several key issues. Speaking to journalists along with Modi, Trump had then said that while both sides would work out a comprehensive trade deal later, a limited-scope pact would be inked soon.
Though Indian and American officials did make some headway in narrowing differences and moved closer to finalizing a deal; the tariffs, fees, and cesses proposed by Finance Minister Nirmala Sitharaman in Union Budget 2020-2021 on agricultural products, medical devices, auto-mobile accessories, electronics and electric vehicles emerged as new irritants.
New Delhi, however, conveyed to Washington D.C. that reduction of duties proposed by Finance Minister in her Budget 2020-21 on several items like fuel oil, petroleum coke, plastic, liquid crystal polymers, platinum and microphone parts opened up opportunities for the US companies to do business in India.
Trump Administration has been prodding the Modi government to remove the price caps on coronary stents, knee implants and other medical devices imported to India from the US. The two sides had by the middle of the last month agreed that the price caps would be replaced with limits on trade margins, particularly on the high-end and premium medical devices imported from the US to India. But the new 5 percent cess on import of medical devices proposed in Union Budget thwarted an agreement on the issue.
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India agreed to open up its market for US milk and dairy products, but insisted that the source animals must be fed on vegetarian diets. Since Trump Administration was not ready to provide the guarantee New Delhi asked for, the negotiators could not make progress on this issue too.
The US officials blamed Prime Minister’s Make-in-India programme and the new tariffs announced in the Union Budget 2020-21 for the collapse of the trade talks.
New Delhi has been nudging Washington D.C. to restore the Generalized System of Preferences (GSP) trade privileges for India. The special trade privilege was granted to India in 1976 for exporting goods to the US duty free. India's exports to the US under the GSP were worth $5.6 billion in 2017. But Trump Administration withdrew it in May 2019. "The concerns that led to the revocation, suspension of India's GSP access remain concerns for us," a senior Trump administration official said recently during a teleconference with journalists on US President’s visit to India – ruling out an early restoration of the privilege. "It was really the failure of the Indian government to provide equitable and reasonable access to its markets in numerous sectors."
US, India not on same page over terrorism
Trump is also likely to touch a raw nerve when he will convey to Modi the concerns of the US over the new Citizenship (Amendment) Act of India and nudge him to ensure equal treatment for all under the rule of law. New Delhi is likely to strongly reject any reiteration by the US President of his offer to mediate between India and Pakistan to help resolve the dispute over Kashmir.
India and the US are also not on the same page over the export of terrorism from Pakistan. The US of late tacitly helped Pakistan to escape blacklisting by Financial Action Task Force even as a review by the intergovernmental organisation found that Prime Minister Imran Khan’s government in Islamabad had failed to fully implement the measures it had promised to put in place to squeeze flow of illicit funds to the terrorist organizations.
What also raised hackles in New Delhi is the Trump administration's plan to restart training for soldiers of the armed forces of Pakistan. The US State Department of late sought approval from the American Congress to spend $72 million in the next financial year to restart the International Military Education and Training scheme for Pakistan. The IMET scheme was a component of the larger US security aid package, worth $2 billion annually, for Pakistan, but the entire programme was suspended by Trump Administration in January 2018 to force Islamabad to combat the menace of terror more effectively. The US move to restart the IMET programme for Pakistan signalled a change in the Trump administration's approach to the Khan government, which might hold it up as an endorsement by Washington D.C. for its endeavour to combat terror.
India also has reservations over the US move to clinch a deal with the Taliban in Afghanistan on February 29 too. New Delhi has been warning Trump Administration about the possibility of Pakistan continuing to provide support to terrorists in Afghanistan even after the peace deal.