Trump dashes hope, says not to sign trade deal with India during this visit

The limited US-India trade deal that has been under negotiations for months may not be signed after all during the upcoming visit by President Donald Trump, who said he was saving a “really big” deal for after the November presidential election.

“We can have a trade deal with India but I am really saving the big trade deal for later on. We are doing a very big trade deal with India. We will have it. I don’t know whether we will have it before the election, but we will have a very big deal with India,” Trump told reporters on Tuesday as he left the White House for a trip to California.

The repeated postponement of even a limited trade package between the world’s largest democracies and strategic partners highlights the underlying tensions despite the bonhomie between their heads of states.

“We are not treated very well by India but I happen to like Prime Minister Modi a lot and he told me we’ll have seven million people between the airport and the event. So it’s going to be very exciting,” Trump said, referring to his planned trip to Ahmedabad as part of the 24-25 February visit with his wife, Melania Trump.

The US president, who has often called India “tariff king”, is scheduled to be received by Prime Minister Narendra Modi on Monday in Ahmedabad, in his home state Gujarat, and will travel to Delhi for further talks on Tuesday.

Last week, Trump said he would only sign the “right deal”, while US trade representative Robert Lighthizer cancelled a visit to India due to unresolved differences between the two sides.

The Indian government remained tight-lipped about the progress of the deal, but officials have previously blamed the US for constantly seeking to expand the ambition of the deal.

One of the reasons the trade deal remains elusive is that the goalposts are constantly shifting, said Dhruva Jaishankar, director of US Initiative at the New Delhi-based Observer Research Foundation. “The US sees any concession by India as reason to ask for more, rather than step to resolution. US negotiators also point to changing Indian regulations, such as those floated late last year or during Budget,” he tweeted.

The two sides failed to finalize the deal during a Modi-Trump meeting in Washington in September.

The limited or interim trade agreement was expected to cover tariff concessions for US farm products, pricing of US-made medical products such as stents and knee implants, information and communication technology products as well as the high duty that India places on Harley Davidson motorcycles.

In return, New Delhi has been asking for exemption from high duties imposed by the US on certain steel and aluminium products, restoration of benefits accorded to Indian exporters under the generalized system of preferences, which was terminated by the Trump administration on 5 June, and allowing import of farm items.