Indian and US trade negotiators were set to meet on Friday, with little sign of a compromise on a series of protectionist measures taken by the two governments in recent months that have strained ties between the strategic partners.
Indian Prime Minister Narendra Modi, re-elected in May, has been pushing nationalist policies with higher tariffs on everything from electronic goods to tighter controls on foreign firms in the fast-growing e-commerce market to help foster domestic companies and create jobs for millions of youth.
A delegation led by Assistant US Trade Representative (AUSTR) for South and Central Asia, Christopher Wilson, will meet Indian officials to try to restart negotiations on tit-for-tat tariffs that were put on hold because of India’s election.
“Since India’s election period has now passed, USTR officials are visiting India for relationship-building with Indian government counterparts,” a USTR spokesperson said.
The USTR delegation is likely to meet Commerce Minister Piyush Goyal along with key trade officials on Friday. The delegation is also likely to meet top officials at the IT ministry.
Trump and Modi met in Osaka on the sidelines of a G20 summit in June where they agreed to build ties and sort out thorny trade issues.
At Friday’s meeting, New Delhi expects US officials to push against India’s efforts to mandate foreign firms to store more of their data locally, an Indian government official said.
Washington is also expected to seek revisions to foreign investment rules for the e-commerce sector that have forced companies such as Walmart Inc’s Flipkart and Amazon.com Inc to rework their business strategies in the country.
“The meeting with USTR was meant to set the tone for further talks after a positive G20 discussion. But Trump’s tweet has shown their intention is to continue with a tough stance,” another official said. India’s trade ministry did not respond to a Reuters email seeking comment.
Indian Foreign Ministry spokesman Raveesh Kumar said during a briefing that India was looking to resolve trade issues, many of which were discussed in Osaka.”We are looking forward to a constructive engagement,” Kumar said.
One concern among Indian policymakers is that the Trump administration may push for a free trade agreement with India that could dent India’s competitiveness, lead to a flurry of imports and hurt Modi’s “Make in India” plan.
In a recent meeting, Foreign Minister Subrahmanyam Jaishankar told trade ministry officials that, “Trump is clearly preparing for a larger game, a larger opening,” according to one of the officials aware of the discussions.
Mark Linscott, a former USTR official, wrote in India’s The Hindu newspaper on Tuesday that trade should be a bigger part of the strategic partnership and that a free trade pact “is the ultimate example of economic integration”.
Trade between and India and US was worth $142.1bn in 2018, with India having a surplus of $24.2bn.