New Delhi: US President Donald Trump’s strong criticism of India’s trade policies just ahead of his maiden visit to the country has not surprised many pundits who say that the US leader is known for this kind of idiosyncrasies and it shows his desperation to reduce his country’s trade deficit with India.
India has been hitting the US 'very hard' on trade with high tariffs for many years, complained the US President Donald Trump just days before his maiden visit to India. Addressing a rally in Colorado on Thursday, the US leader told his supporters said that he will talk business with Prime Minister Narendra Modi to promote American products.
The US President Donald Trump, his wife and first lady Melania Trump and daughter Ivanka Trump are coming to India on Monday on a two-day state visit.
“The basic thing is that they (US Government) want to reduce their trade deficit, so if we are buying something in the defence sector, and if we are buying something in the energy sector, they will be very happy,” said a former top bureaucrat.
“The defence industry in the USA is very big and they are very friendly with the top leadership of the country, same is true with the energy industry in the country and any business avenue for them will make US leaders very happy,” he told ETV Bharat.
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Defence deals to dominate India-US partnership
India this week cleared the purchase of 24 MH-60 Romeo anti-submarine helicopters from the US company Sikorsky Helicopters, a unit of US defence and aerospace major Lockheed Martin. The $2.4 billion deal was cleared just ahead of President Trump’s maiden visit to India next week. Earlier this month, the US state department also cleared the sale of an integrated air defence weapon system to India.
Two top US defence and aerospace companies – Lockheed Martin and Boeing Defence & Space - are also trying to hard-sell their fighter jets F16 and F/A-18 Super Hornets to India under the defence ministry’s new proposal to buy more than 110 medium weight combat jets. The deal, which has been pegged at over $15 billion, is being considered the world’s biggest defence deal in recent times.
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US-India trade deficit
“If you look at the overall picture, if we are able to buy something else from them that reduces the trade deficit by a significant amount then they (President Trump) will go back quite satisfied,” he added.
“They will be able to show to their people. So all of their demands may not be met in substance but the basic thing for them is to ensure the reduction of their trade deficit with India.”
According to the data provided by the US Trade Representative (USTR), the bilateral trade between the two countries was $142.6 billion in 2018, while India exported goods and services worth $84 billion, its import from the US has been estimated at $58.7 billion.
It leaves a trade surplus of over $25 billion in India’s favour, a situation not much liked by the US President who has often blamed India and China of taking advantage of developing country tag in the world trade.
The former bureaucrat advises the government to deal with the US President’s demand in a manner which is suitable to India. “After all India does require defence equipment and India does require energy,” he said while explaining the synergy between Indian requirements and the expectation of the US industry.
“If India buys things that it requires and at the same time it reduces the trade deficit and keeps the USA satisfied then it’s a win-win situation for both the countries,” he said.
