The failure to achieve a trade deal shows the India-US relationship still needs work
By SAIKAT DATTA, NEW DELHI 26 September 2019
Leaders of the world’s biggest and oldest democracies met and walked hand-in-hand in Houston, Texas, but could not make a breakthrough on a crucial trade deal this week.
This sums up the much-hyped trip of India’s Prime Minister Narendra Modi, who addressed a crowd of nearly 60,000 Indian Americans with his US counterpart Donald Trump on Sunday.
Modi’s trip to the US to address the United Nations General Assembly also involved a host of meetings with US officials to address key bilateral issues that have dimmed the relationship in the last few months. Senior Indian government sources told Asia Times that the trade deal, coming in the wake of a tariff war that began last year, was supposed to be the cornerstone of the trip.
But differences cropped up between the Indian trade delegation led by Commerce Minister Piyush Goyal and the US Trade Representative (USTR) Robert Lighthizer. “There were differences over some items such as Information Technology products, and the US is still not keen to return India to the Generalized System of Preferences (GSP) that grants preferential access to US markets. The US revoked that status in early June.
The inability to reach an agreement on what is supposed to be a fairly minor deal was not missed by observers on both sides. As a senior diplomat described it, “this should have been done if we are to believe with the huge optics of the visit. Our prime minister virtually helped the president launch his presidential bid among a very influential cross-section of voters [Indian Americans]. But that did not seem enough to achieve a breakthrough. Clearly, the US is not willing to yield much right now,” the Indian diplomat said.
Playing both sides
A worrying feature of Prime Minister Modi’s latest trip to the US is the return of the “hyphenation” of India with Pakistan by the current US administration. For nearly two decades, Indian diplomats worked hard to change the US administration’s “equitable” approach to India and Pakistan.
“After the terror attack on September 9, 2001 [9/11], it gave us an opportunity to de-hyphenate India and Pakistan. The process started under President Bill Clinton and gathered momentum under President George Bush,” a former Indian diplomat who dealt with the issue said.
However, as President Trump met with Pakistan’s Prime Minister Imran Khan for the second time this year, he displayed warmth that made the Indians uncomfortable.
“I had a very good meeting with Prime Minister (Imran) Khan. It was a long meeting and we discussed a lot,” Trump told Indian journalists who pressed him for a statement on Pakistan’s role in fomenting terror attacks in India. Trump also deflected the question to target Iran. “You mentioned Pakistan, but Iran would have to be at the top of the list. Because if you look at terrorist states, that’s been the number one for a long time,” he told the journalists.
For Indians, this was a very different Trump to the man who two years ago publicly blamed Pakistan on Twitter for US casualties in Afghanistan. Worse, for the third time this year, he offered to mediate between India and Pakistan in Kashmir. India has steadfastly argued that Kashmir is an internal matter and any dispute on the region is a bilateral issue as defined by the Shimla Agreement, which was signed in 1972 after India defeated Pakistan in a 14-day war.
Days before Trump shared the stage with the Indian PM at a rally called “Howdy Modi” in Houston, Indian commentators were ecstatic that this was a “historic” change in bilateral relations with the US. But diplomats now quietly agree that this euphoria dissipated faster than anyone could have anticipated.
“After the 9/11 attack, India and the US moved rapidly in building up the relationship. The US and the EU are India’s most important trading partners. India carried out military exercises every year with the US at various levels, from the tactical to the strategic. But all that seems to be unraveling now,” a former vice chief of the army told Asia Times.
The change in the relationship could be gauged by the bilateral language that shaped joint statements. In the early phase of this bilateral relationship after the 9/11 terror attack, Indian and American troops would exercise quietly. Senior military officers on both sides would caution on use of the word “inter-operability” between Indian and American forces. But by 2014 “inter-operability” was the buzz-word to describe one of the key outcomes of the military exercises.
Clearly, Prime Minister Modi’s long trip to the US, at a time when India’s economy is facing a structural slowdown, has yet to yield the benefits his government desperately needs.