As India prepares for 5 bilateral deals, US says it will take measured steps

At least five pacts including those on homeland security, trade facilitation and intellectual property rights, are likely to be finalised between India and the US during president Donald Trump’s visit next week.

Both sides have, however, clarified that no major deal will be signed during the visit, with Trump even reiterating on Thursday (February 20) that he may slow down on some until the completion of the US elections if they do not work out during his India visit.

The discussions are expected to cover trade, counter-terrorism, matters of strategy and the Indo-Pacific region, said Union foreign ministry spokesperson Raveesh Kumar during a press briefing on Thursday.

Reports said, while at least eight pacts are under consideration, it is highly likely that only five will be inked.

The pact on homeland security will delineate the joint role of both nations in countering terrorism, while the trade facilitation pact will aim to provide a single-window system for US companies to do business in India.

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Kumar said the government has been in talks with the US on trade pacts for some time and wants want to strike the right balance instead of rushing into a deal.

“We do not want to rush into a deal as the issues involved are complicated, with many decisions potentially having real impact on people’s lives and long-term economic consequences. We do not want artificial deadlines,” Indian Express quoted Kumar as saying.

It is being speculated that India will join hands with the US to boost their counter terrorism operations and gathering intelligence and remove irritants in commercial relations, said a Livemint report.

Both the leaders are also expected to issue a joint statement on their stand on counter-terrorism, Indo-Pacific, space and nuclear issues.

The pact to acquire 24 Seahawk helicopters for the Indian Navy, a deal worth $2.6 billion, is also expected to be signed this time.

Pointing to a progressing trade relation that is growing at 10 per cent per annum and a diminishing trade deficit, Kumar said the trade between the two democracies will be more balanced with increasing imports of US oil and gas and purchase of US-made civil aircraft by India.

He also stressed on the growing partnership between the two countries in space science.

“Currently our sides are cooperating in Mars exploration, heliophysics and human spaceflight. On the commercial front, ISRO has launched 209 satellites from US, on-board, PSLV, as co-passengers,” he said.

Besides, negotiations are underway with US companies Westinghouse and NPCIL to build six 1100 MW reactors at Kovvada, Andhra Pradesh.

Tremendous deal or maybe slow down

The US president who will be in India on February 24-25, has however has said that the US may “slow down” if it is unable to work out a good deal with India.

“Were going to India, and we may make a tremendous deal there,” Trump said in his commencement address at the Hope for Prisoners Graduation Ceremony in Las Vegas on Thursday (February 20).

Trump, accompanied by wife Melania, is scheduled to travel to Ahmedabad, Agra and New Delhi on February 24 and 25.

“Maybe well slow down. Well do it after the election. I think that could happen too. So, well see what happens,” he said.

“But were only making deals if they’re good deals because were putting America first. Whether people like it or not, were putting America first,” Trump said.

Bilateral India-US trade in goods and services is about three per cent of the US world trade. In a recent report, the Congressional Research Service (CRS) said the trading relationship is more consequential for India — in 2018 the United States was its second largest goods export market (16.0 per cent share) after the European Union (EU, 17.8 per cent), and third largest goods import supplier (6.3 per cent) after China (14.6 per cent) and the EU 28 (10.2 per cent).

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“The Trump Administration takes issue with the US trade deficit with India, and has criticised India for a range of unfair trading practices,” the CRS said.

“Indian Prime Minister Modi’s first term fell short of many observers’ expectations, as India did not move forward with anticipated market opening reforms, and instead increased tariffs and trade restrictions,” it said. “Modis strong electoral mandate may embolden the Indian government to press ahead with its reform agenda with greater vigour. Slowing economic growth in India raises concerns about its business environment,” CRS said.

As per a fact sheet issued by the Council on Foreign Relations (CFR), trade in goods and services between the two countries from 1999 to 2018 surged from USD 16 billion to USD 142 billion. India is now the United States eighth-largest trading partner in goods and services and is among the world’s largest economies. India’s trade with the United States now resembles, in terms of volume, the US trade with South Korea (USD 167 billion in 2018) or France (USD 129 billion), said Alyssa Ayres from CFR.

“The United States for two years now has set out in stone pretty clearly the things that they wanted to see to try to get an agreement, and it’s basically then on India’s doorstep on whether they want to take those steps,” Rick Rossow, Wadhwani Chair in US-India Policy Studies at the Center for Strategic and International Studies think-tank told reporters during a conference call.

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“The list of US asks has been pretty static all throughout. Not to say that any of these things are easy for India to do, but the United States to my knowledge didnt change the goalposts just because we now consider India to be a middle-income country. The things that we wanted to see happen to get this trade agreement have been pretty static all throughout, no matter how difficult they are,” he said in response to a question.

(With inputs from agencies)