Modi, Trump need to resolve trade friction

The dynamics of the India-US relationship have not been seen to change much with the visit of secretary of state Mike Pompeo to New Delhi. On the contrary, some recent pressure points regarding trade and strategic ties have been highlighted even more. Differences on sticking points like data localisation by American multinationals and the stress on a report on religious freedom in India or the lack of it by the US point to a divergence. India also used the occasion to assert its strategic interests in terms of the purchase of a missile defence shield system from Russia, clearly telling the Americans that it will not sacrifice its friendship and defence ties with Moscow. Mr Pompeo’s visit was in a sense a post-poll ice-breaker than a substantive meeting on friction points in ties that have cropped up only in the recent past.

Prime Minister Narendra Modi’s bilateral meeting with US President Donald Trump at the G-20 summit in Osaka on Friday assumes greater significance in view of the fact that not much progress has been made in Mr Pompeo’s talks with external affairs minister S. Jaishankar in New Delhi. It’s a moot point whether a raft of issues can be tackled at the Modi-Trump meeting on the sidelines of a major summit of world leaders. Mr Trump, who fancies himself more as a salesman than a negotiator, might wish to push more things from America on the plate, including oil and aircraft deals, while also seeking open market access to India. Due to the US sanctions, India had to sacrifice Iranian oil that was being bought on favourable rupee terms. We must now source more oil for our expanding energy needs. It will be interesting to see what breakthroughs Mr Modi can achieve on the strength of his personal equations with Mr Trump, which are very good.

Not only was nothing much achieved in the Pompeo visit, a Reserve Bank directive on data localisation was released while the secretary of state was in India, which may have only exacerbated the situation. India has to deal with Mr Trump’s habit of brinkmanship — he has even been known to have come within an inch of declaring war on Iran. His statement on India’s retaliatory tariffs on American almonds and apples is a stereotypical response to issues that may need negotiation than coercion, specially given that the other party is India, with which his administration claims to have the closest ties. Far from furthering a special relationship, the US government has tended to introduce significant friction in ties as the chairman of the US House Foreign Affairs Committee said in a letter to Mr Pompeo. The US must close the gap between rhetoric and unilateral action. Given what is happening all around, India’s assertion on the S-400 missile deal with Russia is a clear message that this country will look after its own strategic interests.