Trump Administration officials blow hot and cold on relations with India

From left, USISPF president and CEO Mukesh Aghi, USISPF chairman John Chambers, Senior White House Advisor Jared Kushner and MasterCard president and CEO Ajay Banga at the Second Annual Leadership Summit of the U.S.-India Strategic Forum (USISPF) on July 11 at the Willard InterContinental Hotel in Washington, D.C.

WASHINGTON, D.C.— At the Second Annual Leadership Summit of the U.S.-India Strategic Forum (USISPF) held on July 11 at the Willard InterContinental Hotel, Senior Trump administration officials offered both bouquets and brickbats in describing U.S.-India relations, particularly on the trade front, exacerbating India Inc. concerns of a major trade dispute brewing.

And, these concerns were compounded by yet another swipe against India by President Trump on the eve of the USISPF summit when on July 9, he tweeted that "India has long had a field day putting Tariffs on American products. No longer acceptable!"

Trump’s terse tweet came just days after his meeting with Prime Minister Narendra Modi on the sidelines of the G20 Summit in Osaka on June 28 where both leaders acknowledged the growing trade disputes, especially in the area of tariffs and pledged to resolve these contentious issues.

Earlier, in condescending digs at India over trade, Trump, called India the “Tariff King.”

On the eve of his meeting with Modi in Osaka, Trump had tweeted, "I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn!"

On June 5, Trump had removed India as a beneficiary of the Generalized System of Preference (GSP) — the largest and oldest U.S. trade preference program that allows for duty free exports from developing countries designed to promote economic development in those nations—complaining that India was not providing

"equitable and reasonable access" to its markets for American products.

There are others in the administration, who are more sanguine about the relationship. U.S. Energy Secretary Rick Perry, the first senior administration official to speak at the USISPF summit, predicted, "If India and the U.S. are together pulling this wagon in the same direction, the future of the world will be better and the future of their peoples collectively are better.”

He said Washington and New Delhi have a catalytic role to play in the future progress of the world, and also pointed to the growing energy cooperation between both countries, with the U.S. exporting 36 deliveries of natural gas to India.

He also seemed to shrug off the differences on the trade front between the U.S. and India, declaring that “the end of a disagreement, we're always going to come together and shake hands.”

But U.S. Commerce Secretary Wilbur Ross, who followed Perry, pulled no punches when he said that India’s protectionist policies and tariff rules are a damper on American companies exploring opportunities for foreign direct investment in India.

Referring specifically to recent decisions by India relating to Walmart and Amazon, the Commerce Secretary warned that this could be contagious and preclude other companies also looking to invest in India.

Ross acknowledged, "The Walmart is going to continue to invest in India. I don't mean to suggest that they're not. That's not what they told me. That caused concern on the part of other companies because of this one thing that they really needs to know if they are going into a country that they will be stability of regulation, that there will be transparency and an opportunity to comment on new pending regulations.”

“Uncertainties like that make it very difficult for businesses to make their major and long-term capital decisions,” he added.

Ross said it is imperative that “India needs to start to reconvince the outside world that there will be stability, there will be transparency and provide a level playing field to companies. Such a move would bring in huge foreign direct investment in India.”

But he held out an olive branch, saying that the Modi Government in its second go-around “is in position better than they have been earlier to do something and also that the prime minister is determined to improve the economy.”

Deputy U.S. Trade Representative Jeffrey Gerrish, who kicked off the afternoon session, doubled down on Ross’s assertions, warning that his boss (U.S. Trade Representative) Robert Lighthizer “is frustrated” with the “lack of balance and reciprocity from India when it comes to trade and tariffs,” and that the U.S. wants solutions to be found expeditiously.

Gerrish, whose portfolio includes Asia, Europe, the Middle East and Industrial Competitiveness, said, "There are a number of important issues that we have between us. We certainly have a number of important issues we were working on as part of the GSP review we had. But we need to move beyond the GSP review at this point and tackle the broader issues that we have between us and take a more comprehensive approach to the trade issues that we have.”

He recalled that Lighthizer, had made that abundantly clear to the new Union Commerce Minister Piyush Goyal, and said, “We are hopeful that they will continue to have meaningful, important, productive discussions.”

Gerrish said, "I think it is important now that we do try to address comprehensively the trade issues that we have between us," and noted that the problems concern everything ranging from market access related to agricultural and non-agricultural products to other critical issues in areas involving digital trade, services and intellectual property protection and enforcement.

He pointed out that even as he was speaking, a USTR delegation led by Assistant U.S. Trade Representative, Christopher Wilson is in New Delhi talking discussing these problems, but said, "They are not there to negotiate at this point. They're just there to lay out the full amount and full slate of issues that we have to try to see if this new Indian government has the willingness and the wherewithal to address these issues and resolve them.”

Gerrish said, "At this point, it's too early to speculate as to what the next steps will be and what the timing will be on those any next steps or any actions that we would take. But I think it's fair to say that this is not going to be an open-ended discussion. We need to move quickly. And time is certainly of the essence.”

He reiterated, "It would be helpful to see some early harvest items that we could achieve here. We do think that most of the market access issues that we have, although longstanding in nature, and even those that were included in the GSP review are ones that should be able to be resolved quickly and without a lot of administrative difficulty.”

"But we really do need to see very strong concerted, expeditious action here to resolve these, as I mentioned, many of them are long standing issues," Gerrish added.

During the question and answer session, he senior trade official said he had also made the case strongly to his Indian counterparts that the date localization policies that the government was considering to impose, would be another major irritant in U.S.-India trade and terminating any such intent would help to remove much of the current tensions.

Gerrish acknowledged, "I think it's been helpful that the new government is indicated that they want to consult on these policies and provisions that they are considering. I certainly welcome that.”

But he warned, “It would be really a problematic step if those were to be put in place and could really hurt the new engagement that we have and potentially halt that altogether across the board on the trade issues.”

The back-to-back attack modes by Ross and Gerrish, were followed by a more optimistic note by President Trump’s son-in-law Jared Kushner, a senior White House adviser, who said that the sky is the limit for the U.S. and India to cement its bilateral strategic ties. He said the White House is “very focused” in this effort, particularly since “there are very few countries like India that possess the potential for growth.”

He then went on to list the various steps being taken by Trump vis-à-vis America First policy, which was really zeroing in on making the U.S. "more competitive globally", and said that in this regard, "Part of that comes with obviously the relationship with India, where you have a fast-growing economy. You have an amazingly, educated population there and then a lot of people who share a lot of similar values with this country."

Kushner said, "Forums like this are critically important because when we think about the world as it is today, there are very few countries like India that possess the potential for growth in what the future strategic relationship can be," especially since “whether it's trade and commerce, or national security, there are so many strategic elements of this relationship.”

Kushner, who earlier presented the USISPF's 2019 Global Excellence Award to Mastercard CEO and President, Ajay Banga, and then engaged in a fire-side chat with Banga, acknowledged that he’s the White House point person when it comes to revamping the immigration policies on behalf of the President.

He asserted that neither the President nor his administration was anti-immigration and declared, "Just to be very clear, the president is very pro-immigrant. He's anti-illegal immigration and what he wants to do is make America the land of opportunity We want to make it a much more clean system, a much more streamlined system, much more fair system and one where most people will have the opportunity to try to become American citizens.”

Kushner argued, "It's the greatest privilege in the world to be an American citizen and that's something that we should make available to people who really want it badly and who want to earn it.”

Meanwhile, Indian’s Ambassador to the U.S. Harsh Vardhan Shringla, assuaged the audience by promising that there would soon be “a mutually satisfactory” solution to iron out the current irritants in the relationship and both countries are committed not to allow these "minor speed bumps" to preclude what is a great and transformational relationship.

He said the relationship have to be seen as “in strategic and not tactical terms,” and added, “what we are talking about really are strategic gains and that larger and broader vision of not just five but 10, but 50 years ahead is how we need to see each other.”

USISPF chairman John Chambers, also expressed similar views and also predicted that that re-election of Prime Minister Modi "is the start of a new era for India and India-US relations."

"It is essential that we level the playing field and stay away from protectionism. I am confident that we achieve $ 327 billion in bilateral trade by 2025 if we grow at 13 per cent every year. I challenge the government and industry to work together to advance this objective,” he said.

USISPF president and CEO Mukesh Aghi informed participants that in collaboration with government and industry leaders, "we are making tremendous strides in moving the needle on our commercial priorities.”

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