FPI / February 20, 2020
By Lee Cohen
The Trump administration sees India as an important strategic ally in the region, particularly useful in pushing back against China’s Asian reach. While the past several years have yielded little significant progress in trade relations, the bilateral economic and defense relationships between the U.S. and India are too compelling to abandon.
With that in mind, U.S. President Donald Trump and first lady Melania Trump make their first official visit to India next week. The president is using the occasion to “strengthen the United States-India strategic partnership,” according to a White House statement.
From the U.S. standpoint, the visit will strongly encourage the U.S.-India trade relationship in hopes of securing an additional favorable trade agreement.
The agenda includes stops in the capital New Delhi and the western state of Gujarat, the home state of Prime Minister Narendra Modi.
Trump and Modi have a warm personal relationship, particularly after Trump accepted the prime minister’s invitation to attend last September’s Houston-based “Howdy Modi” event, the largest gathering of Modi supporters outside India, at the NRG Stadium. Trump’s attendance at the Houston event was a huge feather in Modi’s cap and a cue to the world of the importance the Trump administration places on the bilateral relationship.
During next week’s visit, Trump and Modi will address a large crowd (estimated to reach 125,000) in a cricket stadium in Ahmedabad. Playing off the Houston event’s name, this rally has been baptized “Namaste Trump.”
According to the U.S. Trade Representative, American goods and services trade with India totaled an estimated $142.6 billion in 2018. Exports were $58.7 billion; imports were $83.9 billion. The U.S. goods and services trade deficit with India was $25.2 billion in 2018.
There have nevertheless been recent trade tensions between the two nations. Early in 2019, Washington removed India from a preferential trade program that allowed duty-free entry of up to $5.6 billion of annual exports to the U.S. At the time, Trump justified the move, stating: “I have determined that India has not assured the United States that it will provide equitable and reasonable access to its markets.”
The new Indian ambassador to Washington, Taranjit Singh Sandhu, said recently that the U.S. is India’s preferred trade partner in its journey to become a $5 trillion economy by 2024, stating, “The relations between our governments has found a new momentum, getting its energy from the warm friendship between our leaders.”
A major shot in the arm to lubricate the relationship could come in the form of defense spending. Reports indicate that India was preparing to buy U.S. military helicopters from Lockheed Martin for $2.6 billion ahead of Trump’s visit. Such a significant investment could conceivably prompt U.S. reversal of tariffs on exports to India.
For his part, Modi will once again bask in Trump’s light as a result of the official visit. After Trump’s acquittal by the Senate and the shambles of the Democrat caucuses, indications are good that strong relations with Trump are a good long-term investment for India.
This seems a good bet as enthusiasm for Trump is not confined to India’s leader. The leader of Hindu Sena, a nationalist Hindu organization, expressed: “We like Donald Trump because he openly spoke about India’s feelings…He openly said that he would eliminate Islamic terrorism from its roots, that is why I am his fan.”
A Telangana villager, Bussa Krishna, told New Delhi TV: “Every Friday I fast for Trump’s long life. I also carry his picture and pray for him before commencing any work.”
During Modi’s 2017 visit to Washington, Trump said: “I look forward to working with you, Mr. Prime Minister, to create jobs in our countries, to grow our economies, and to create a trading relationship that is fair and reciprocal. It is important that barriers be removed to the export of U.S. goods into your markets, and that we reduce our trade deficit with your country.”
Trump’s visit next week could go a long way toward facilitating those goals and to scoring another huge trading accomplishment, a coveted U.S.-India trade agreement.
Lee Cohen is a fellow of the Danube Institute. He was an adviser on Europe to the U.S. House of Representatives Foreign Affairs Committee and founded the Congressional United Kingdom Caucus.