US, India hold high-level talks to reset ties as trade deal remains elusive

By Shruti Srivastava and Sudhi Ranjan Sen

 

Two separate US delegations are in New Delhi this week to hold talks with their Indian counterparts, seeking to repair bilateral ties even as a trade deal remains elusive.

 

Allison Hooker, under secretary of state for political affairs, will meet senior Indian officials including Foreign Secretary Vikram Misri during her visit from Dec. 7-11, the US embassy announced on the weekend. A separate delegation led by Rick Switzer, deputy US trade representative, is expected to arrive Tuesday. 

 

Officials in New Delhi familiar with the matter said they don’t expect the scheduled talks to result in any immediate announcement of a trade deal. However, the meetings signal that both sides are keeping communication channels open and are willing to keep the broader relationship on track, the people said, asking not to be identified because the discussions are private.   

President Donald Trump slapped 50 per cent tariffs on Indian goods in August to penalize it for its trade barriers and purchases of Russian oil. Since then he’s sanctioned two of Russia’s biggest oil producers, forcing refiners in India to seek alternate sources. 

 

Although Trump has since toned down his rhetoric, saying in November he’ll reduce tariffs “at some point,” he remains critical of India’s trade practices. At the White House on Monday, Trump signaled he could take action against the South Asian nation for alleged dumping of Indian rice into the US marketplace.

 

“They shouldn’t be dumping,” Trump said. “I mean, I heard that, I heard that from others. You can’t do that.”   

 

Putin’s Visit 

The US visits come days after Russian President Vladimir Putin’s high-profile trip to India last week to deepen economic ties and showcase his longstanding ties with New Delhi, despite Trump’s pressure.  

 

Switzer is expected to be in India from Dec. 9-11 along with the chief trade negotiator, Brendan Lynch, people familiar with the matter said, to advance negotiations on a broad trade agreement. India’s commerce secretary said recently he was optimistic the two sides could clinch an agreement on the first tranche of the deal, which covers the tariff rates, before the end of the year. 

 

India’s Ministry of Commerce and Industry and Ministry of External Affairs didn’t immediately respond to requests for further information.

 

Officials in New Delhi pointed out that both sides continue to engage at an institutional level, including holding annual military exercises in Alaska in September and discussing security matters at the US-India 2+2 Intersessional Dialogue in August. Last week, the two nations conducted a joint working group meeting on counter-terrorism. 

 

Analysts tracking India-US relations say the nations are making efforts to bring bilateral ties on an even keel after months of tensions.

 

“Both sides are trying to move beyond where the relationship was, and after tariffs were imposed, there have been sustained high-level negotiations between the two,” said C. Raja Mohan, a visiting professor at the Institute of South Asian Studies at the National University of Singapore. 

 

Mohan said the engagement shows that the two nations are working on overcoming the “current bumps in the road.”

 

India-US relations have also soured because of Trump’s assertions he brokered a ceasefire between India and Pakistan during the four-day conflict in May and used trade as a bargaining chip. New Delhi has repeatedly rejected the claims.

 

While the latest talks are a positive sign, there’s still no clarity on the trade deal. 

 

Ajay Srivastava, founder of New Delhi-based think tank Global Trade Research Initiative, said the US should show “goodwill” by removing the 25 per cent penalty tariff imposed on India because of its oil purchases from Russia. “The trade deal is the next step,” he said.