US President Donald Trump’s two-day India visit is over. He landed in Indian Prime Minister Narendra Modi’s home state, Gujarat, to be greeted with much Subcontinental colours and razzmatazz. He also spoke to a 100,000- strong crowd gathered in the largest cricket stadium in the world. Apart from Modi Dolan-ing Donald and Dolan himself slipping on Hindi names, things seemed to have gone reasonably well for both Modi and Trump — as far as optics go. Beyond that? Well, here goes.
Trump likes spectacles and large crowds. Remember his spat with the US media on the numbers for his inauguration? Well, if you do, you would know what numbers mean for him. In this case, while the ten-million crowd could not materialise, Modi did manage to gather enough for President of the United States, Dolan Trump, to feel pleased.
For the most part, Trump also stayed with the script. Given his penchant for berating even the best allies, this point cannot be overemphasised. The mention of good relations with Pakistan, the offer of mediation on Kashmir, the talk about high tariffs by India on US exports were irritants, but could be managed. Trump did balance that out by praising Modi (Darwin be praised) on his ‘inclusive’ politics. To say that while mobs were on the rampage in New Delhi is what Pankaj Mishra would describe as arriviste politics. That said, it must be big relief for Modi and his cohorts.
The optics were, therefore, good. Trump, as he goes into the campaign, needs to show off to his supporters that he is an international leader; Modi, reeling under tremendous pushback on the controversial Citizenship Amendment Act, needs good headlines. They helped each other achieve that.
The substance? That’s a more tricky area. Trade deficits is a big issue with Trump. He believes that anyone making a profit by trading with the US is stealing from the US. This is also an area where he doesn’t distinguish between friends and adversaries. So, it’s not just with China, the adversary, but also with close allies like Japan, Germany and France to name just three, and leaving aside Mexico and Canada.
Ditto with India. Tensions have been escalating for three years. Trump levied tariffs on imports of steel and aluminium from India, as also the EU, Mexico and Canada. India retaliated with higher tariffs on agricultural goods and restrictions on medical devices from the US. This prompted the US to remove India from the preferential trade programme. The programme allows developing economies to export to the US on favourable terms. Then, just two weeks before his India visit, the US assessed that India, along with certain other countries, belong in the developed economies category and cannot avail the two per cent de minimis standard. The category shields low-income countries from US trade reprisals.
As Trump had indicated before heading out to India, a big trade deal, while being worked at by both sides, was unlikely to materialise. It didn’t. At the joint presser Trump, when asked about the deal, replied: “Yeah. Sure. We know the problems. I know the problems. Previous administrations had no clue. They didn’t know the problems. I know the problems. We’re being charged large amounts of tariffs, and — can’t do that. You can’t do that.” He later went on about how he had squeezed the Chinese and so on. As he tweeted in March 2018, “Trade wars are good, and easy to win.”
This is not an issue on which he is prepared to give up or give in. Modi, for his part, has also gone back to the protectionist playbook instead of opening up the economy. How far he can hold out to Trump’s version of a trade deal remains to be seen.
That said, two deals did happen, the kind Trump likes and which give the US companies leverage and a market: India will buy attack helicopters from the US and import more Liquified Natural Gas from Exxon Mobil. India needs both defence equipment and more energy, so those deals were easy to sign.
On the defence procurement side, the US is the biggest exporter of defence-related equipment while India is the largest importer, despite its attempts to indigenise defence production. India still imports a majority of its defence equipment from Russia, which accounts for almost 50 per cent of India’s imports. Since 2008, India has been trying to diversify its defence portfolio, though Delhi is conscious of not breaking its procurement ties with Moscow. India’s imports from the US since 2008 have reached USD15 billion from near-zero. At the same time in Oct 2019, India inked a deal with Moscow for Russia’s S-400 A2-AD system.
While the two sides want the cooperation to go up to USD150 billion, a Carnegie report says American defence sales to India are far from assured because “The United States and India are still motivated by different objectives, and their respective export and procurement policies reflect this. While the Indian procurement process poses challenges to nearly all foreign vendors, American firms face particularly difficult hurdles due to the unique nature of the US system.”
The issue of 5G wireless technology, the bedrock of cutting-edge digital cellular networks, also poses a problem with the Trump administration having put even allies on notice against doing any deals involving China’s Huawei company, terming Huawei a security risk. As India moves towards 5G, it will become a more thorny dispute.
Trump also referred to the Asia-Pacific region as Indo-Pacific, underlining India’s importance in the US strategy to contain China. He also mentioned “the quad” and the “Blue Dot” project. This underscores India’s importance as part of the alliance including US, Australia and Japan. But India has so far been wary of moving further along that path with the US despite its adversarial relations with China. It will be interesting to see how far Delhi is prepared to go to be seen squarely in the US camp.
There are other headwinds too: India’s divisive, exclusionary politics (Delhi riots amplify that), economic slowdown (several sectors of India’s economy are showing negative growth and unemployment is at a near-half century high); growing social unrest and global slowdown in the last six weeks because of disruption of supply chains, tourism and aviation in the wake of Coronavirus pandemic.
And then there’s Trump himself. Characteristically, unpredictable. That has been witnessed by Shinzo Abe (Japan), Angela Merkel (Germany), Emmanuel Macron (France), Justin Trudeau (Canada) — Trump has publicly and undiplomatically mocked them despite some of them trying their best to massage his ego.
So, while the spectacle was good, the substance would require for both sides to jump through many hoops to get somewhere. And those difficulties are not just procedural, but relate to structural impediments.
In sum, this was neither a veni vidi vici moment for Trump nor for India. Both sides need a win from the other and that’s where things have a way of getting stuck.
The writer is a former News Editor of The Friday Times. He tweets reluctantly as @ejazhaider
Trump likes spectacles and large crowds. Remember his spat with the US media on the numbers for his inauguration? Well, if you do, you would know what numbers mean for him. In this case, while the ten-million crowd could not materialise, Modi did manage to gather enough for President of the United States, Dolan Trump, to feel pleased.
For the most part, Trump also stayed with the script. Given his penchant for berating even the best allies, this point cannot be overemphasised. The mention of good relations with Pakistan, the offer of mediation on Kashmir, the talk about high tariffs by India on US exports were irritants, but could be managed. Trump did balance that out by praising Modi (Darwin be praised) on his ‘inclusive’ politics. To say that while mobs were on the rampage in New Delhi is what Pankaj Mishra would describe as arriviste politics. That said, it must be big relief for Modi and his cohorts.
The optics were, therefore, good. Trump, as he goes into the campaign, needs to show off to his supporters that he is an international leader; Modi, reeling under tremendous pushback on the controversial Citizenship Amendment Act, needs good headlines. They helped each other achieve that.
The substance? That’s a more tricky area. Trade deficits is a big issue with Trump. He believes that anyone making a profit by trading with the US is stealing from the US. This is also an area where he doesn’t distinguish between friends and adversaries. So, it’s not just with China, the adversary, but also with close allies like Japan, Germany and France to name just three, and leaving aside Mexico and Canada.
Ditto with India. Tensions have been escalating for three years. Trump levied tariffs on imports of steel and aluminium from India, as also the EU, Mexico and Canada. India retaliated with higher tariffs on agricultural goods and restrictions on medical devices from the US. This prompted the US to remove India from the preferential trade programme. The programme allows developing economies to export to the US on favourable terms. Then, just two weeks before his India visit, the US assessed that India, along with certain other countries, belong in the developed economies category and cannot avail the two per cent de minimis standard. The category shields low-income countries from US trade reprisals.
As Trump had indicated before heading out to India, a big trade deal, while being worked at by both sides, was unlikely to materialise. It didn’t. At the joint presser Trump, when asked about the deal, replied: “Yeah. Sure. We know the problems. I know the problems. Previous administrations had no clue. They didn’t know the problems. I know the problems. We’re being charged large amounts of tariffs, and — can’t do that. You can’t do that.” He later went on about how he had squeezed the Chinese and so on. As he tweeted in March 2018, “Trade wars are good, and easy to win.”
This is not an issue on which he is prepared to give up or give in. Modi, for his part, has also gone back to the protectionist playbook instead of opening up the economy. How far he can hold out to Trump’s version of a trade deal remains to be seen.
That said, two deals did happen, the kind Trump likes and which give the US companies leverage and a market: India will buy attack helicopters from the US and import more Liquified Natural Gas from Exxon Mobil. India needs both defence equipment and more energy, so those deals were easy to sign.
On the defence procurement side, the US is the biggest exporter of defence-related equipment while India is the largest importer, despite its attempts to indigenise defence production. India still imports a majority of its defence equipment from Russia, which accounts for almost 50 per cent of India’s imports. Since 2008, India has been trying to diversify its defence portfolio, though Delhi is conscious of not breaking its procurement ties with Moscow. India’s imports from the US since 2008 have reached USD15 billion from near-zero. At the same time in Oct 2019, India inked a deal with Moscow for Russia’s S-400 A2-AD system.
While the two sides want the cooperation to go up to USD150 billion, a Carnegie report says American defence sales to India are far from assured because “The United States and India are still motivated by different objectives, and their respective export and procurement policies reflect this. While the Indian procurement process poses challenges to nearly all foreign vendors, American firms face particularly difficult hurdles due to the unique nature of the US system.”
The issue of 5G wireless technology, the bedrock of cutting-edge digital cellular networks, also poses a problem with the Trump administration having put even allies on notice against doing any deals involving China’s Huawei company, terming Huawei a security risk. As India moves towards 5G, it will become a more thorny dispute.
Trump also referred to the Asia-Pacific region as Indo-Pacific, underlining India’s importance in the US strategy to contain China. He also mentioned “the quad” and the “Blue Dot” project. This underscores India’s importance as part of the alliance including US, Australia and Japan. But India has so far been wary of moving further along that path with the US despite its adversarial relations with China. It will be interesting to see how far Delhi is prepared to go to be seen squarely in the US camp.
There are other headwinds too: India’s divisive, exclusionary politics (Delhi riots amplify that), economic slowdown (several sectors of India’s economy are showing negative growth and unemployment is at a near-half century high); growing social unrest and global slowdown in the last six weeks because of disruption of supply chains, tourism and aviation in the wake of Coronavirus pandemic.
And then there’s Trump himself. Characteristically, unpredictable. That has been witnessed by Shinzo Abe (Japan), Angela Merkel (Germany), Emmanuel Macron (France), Justin Trudeau (Canada) — Trump has publicly and undiplomatically mocked them despite some of them trying their best to massage his ego.
So, while the spectacle was good, the substance would require for both sides to jump through many hoops to get somewhere. And those difficulties are not just procedural, but relate to structural impediments.
In sum, this was neither a veni vidi vici moment for Trump nor for India. Both sides need a win from the other and that’s where things have a way of getting stuck.
The writer is a former News Editor of The Friday Times. He tweets reluctantly as @ejazhaider