India should cut tariffs for better trade ties, says Donald Trump

Trump said that a comprehensive trade agreement with India would take much longer to finalise than earlier expected

Import duties in India continue to be among the highest in the world, and a trade deal will need to rectify that, US President Donald Trump said on Tuesday. 

However, despite arguing that some progress had been made, Trump did not give a deadline for the signing of the deal, and said it was unlikely before the year-end. Addressing a large gathering of the Indian and foreign media, Trump also announced his support for Prime Minister Narendra Modi’s policies. 

“We talked for a long time. Prime Minister Modi is a religious and calm man. But he is also a very strong and tough person,” he said, vouching for the PM’s ability to counter the threat of terrorism.

However, the personal bonhomie may not lead to a change in America’s position on economic relations. 

While applauding the investments pledged by Indian corporates in the US, Trump repeatedly pointed out that current bilateral business ties would need to be assessed in the light of high tariffs. He also brought up the example of Harley Davidson bikes, saying these were costly to sell in India due to tariff barriers. He also said any trade deal would need to reduce tariffs across the board. "If they want a trade deal, they'll get one. We also did one with China recently. I'll win it. It's too easy," Trump said, suggesting that the US might pursue an aggressive tact when it comes to negotiating a pact. 

Before leaving for India, Trump had said that a comprehensive trade agreement with India would take much longer to finalise than earlier expected. The sudden cancellation of US Trade Representative Robert Lighthizer’s visit to New Delhi as part of the vanguard negotiations team shut down the talks, diplomatic sources said. 

Trump also hinted that the US was not willing to back down on trade measures taken against India. "Recently tariffs were raised (by India). We also did some things in return. You can call it rent control," he said, referring to Washington DC's move to exclude India from the crucial export incentives offered under its Generalized System of Preference Trade scheme. According to the commerce department figures, India had a trade surplus worth $12.6 billion with the US in the April-December period of 2019-20.