As Trump-Modi Bonhomie Blossoms, Trade Talks ‘Fail’

Expectations were high since Trump had earlier said, “We will have a trade deal soon.”

2 min read
Prime Minister Narendra Modi and US President Donald Trump. 

While PM Narendra Modi and US President Donald Trump participated in bilateral talks on the sidelines of the UN General Assembly session on Tuesday, 24 September, reports suggest that negotiations for an anticipated India-US trade deal fell through.

Commerce Minister Piyush Goyal and US Trade Representative (USTR) Robert Lighthizer were expected to shake on a trade package on Tuesday, but reportedly failed to reach common ground on key issues that plague bilateral trade between the two democracies.

Expectations were high since Trump had earlier said, “We will have a trade deal soon. We will have a bigger trade deal down the road.”

He had also shared the stage with PM Modi at the ‘Howdy, Modi’ rally on Sunday, where the two had displayed close friendship and a common vision on fighting terrorism.


Though an official reason hasn’t yet been provided, the agreement fell through because the two sides couldn’t reach an agreement on Information and communications technology (ICT) products, sources told The Hindu.

The US reportedly wanted India to do away with the 20 percent import tariff on ICT products for American manufacturers to have easier access to a large and expanding Indian market.

India is reluctant to do that as it would make it easier for China to flood the market with its cheap tech products, hurting local manufacturers, the publication reported.

Another point of contention was that India reportedly wanted preferential market access to US markets under the Generalized System of Preferences (GSP) without having to meet the criteria for it.

India was a part of this programme till it’s GSP designation was revoked by Lighthizer earlier this year, citing the existence of “trade barriers that create serious negative effects on United States commerce”.

India also asked for exemption from high duties imposed by the US on certain steel and aluminium products and greater access to certain US markets including agriculture, automobile, auto components and engineering, reported news agency PTI.



"We did not discuss a timeline on trade we are optimistic that we will be able to conclude an understanding or an agreement fairly soon," Foreign Secretary Vijay Gokhale said on Tuesday, addressing the press. He rejected reports that the trade talks had derailed.

Gokhale added that the two sides had “narrowed the areas of difference”, had made significant progress and were confident of further progress in the future.

"These are issues which are complex. These issues involved industries of both the sides. It involves jobs on both sides," he said, adding that trade talks require a “certain amount of discussions and balance.”

The USTR and Commerce and Industry Minister Piyush Goyal have both expressed satisfaction on their discussions, reported PTI.

(With inputs from The Hindu and PTI)

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