Trade deal talks between America and India have stalled. Meanwhile, last Thursday, US Commerce Secretary Howard Latnick claimed that the trade deal between India and the US could not be finalized because Prime Minister Narendra Modi refused to personally call US President Donald Trump, and hence the deal fell apart. Latnik also said, “We have signed deals with Indonesia, Vietnam and the Philippines. We were hopeful that the deal with India would be completed before these. The deal was ready, but PM Modi did not call the President, which hurt his ego, and the deal was not completed.”
Threat of 500 percent tariff on India
Earlier, US Senator Lindsey Graham said that President Trump has given the “green light” to the “Sanctioning Russia Act”. This will put pressure on countries importing crude oil from Russia at cheap prices, which will help in stopping Russian attack in Ukraine. This bill specifically mentions imposing tariffs up to 500 percent on India, China and Brazil. Overall, at present many issues are creating tension between the two countries.
Indian exporters are worried
However, the country’s exporters believe that Indian and American officials should sit down and resolve the issues so that a trade agreement that is beneficial to both can be reached. He says that America has already imposed 50 percent tariff on India, due to which both the countries are suffering losses. Now, if the tariffs increase further, it will be a major blow to businesses in both the US and India. Federation of Indian Export Organizations (FIEO) President SC Ralhan says that both the parties should continue talks for a deal. An exporter from the leather industry said the US is a big market for India, and a trade agreement would boost the country’s exports.
“Although we are looking for new markets, America is a big market,” the exporter said. Another exporter from the engineering field said that the bilateral trade agreement between the two countries will help in reducing uncertainties on the trade front. Think tank GTRI said the blockage in the India-US trade deal reflects difficult policy decisions rather than missed phone calls. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said, “It may be an easy story to call this delay a matter of personal diplomacy, but it masks the fundamental differences that both sides still need to resolve and risks undermining one of the most important trading relationships in the global economy.”