Modi, Trump set their sights on win-win deal

Surendra Kumar
Former Ambassador

AHEAD of the bilateral meeting in New York, facing the media, the comments of the acerbic and unpredictable US President, who often shoots off verbal missiles, gave the impression as if the effect of what he witnessed at the ‘Howdy, Modi’event in Houston  hadn’t dissipated. He seemed to be mesmerised by the enthusiasm shown by over 50,000 Indian Americans for visiting Indian PM Narendra Modi. Donald Trump even compared Modi with rock-and-roll king Elvis Presley.

For the Indian PM, who is constantly accused back home by his detractors of following divisive policies, being called ‘Father of India’ must have been the ultimate tribute ever paid.

“I remember India before, it was very torn. There was a lot of fighting and he brought it all together like a father would bring it all together. Maybe he’s the Father India... We’ll call him the Father of India... So he’s done a fantastic job,” Trump said.

Earlier, at his meeting with Imran Khan, Trump had alluded to Modi’s strong statement in Houston about Pakistan’s role in terror without naming it and found it very aggressive but well received. He hoped that “they’re going to be able to come together, India and Pakistan, and do something that’s really smart and good for both...” He expressed his willingness to mediate but with a caveat, “If I can help. I would certainly do that. It will be dependent on both these gentlemen (PM Modi and PM Khan)”. Fully aware of India’s opposition to any third party mediation, Trump’s offer to mediate seems just to keep Pakistan in good humour.

At the press meet with Modi, Trump was stressing the bilateral track: “I really believe that PM Modi and PM Khan  will get along when  they get to know each other, I think a lot of good things will come from that meeting.”

As for the much anticipated trade deal, he said, “We’re doing very well. And Bob Lighthizer (United States Trade Representative) who’s right here was negotiating with India and their very capable representatives. And I think very soon we’ll have a trade deal.”

On his part, the Indian PM stressed that the MoU signed by Petronet LNG Ltd with Tellurina Inc in Houston on September 22 to invest $2.5 billion in the energy sector will result in a trade of $60 billion in the coming decades and create 50,000 jobs. Trump appreciated the Petronet-Tellurina MoU and welcomed JWS’s plan to invest $500 million in Texas. 

At the watershed ‘Howdy, Modi’ in Houston, Trump had flagged the burgeoning defence cooperation, “Our relationship today is stronger than ever... US and India are forging an even stronger security partnership with both sides set to conclude several new defence deals very soon.” He had mentioned that US defence exports to India in the last 10 years have crossed $18 billion. As all the three wings of India’s Defence Force: Army, Navy and the Air Force have their long inventories, defence trade is tipped to expand. While joint military exercises have reached new heights, the same can’t be said about the laudable idea of joint research and joint production in the defence field.

The current President of the US and the Prime Minister of India, representing respectively the oldest and the largest democracy, are tough negotiators; one is a self-made billionaire-turned-President who prides himself on being the best deal-maker and the other a product of the RSS shakha, who grew in the folkloric Gujarati business environment and honed his deal-making skills as the state’s Chief Minister. They seem to have two contrasting negotiating approaches: Trump believes a deal is a good deal if it results in surplus for the US but Modi firmly believes that the best deal is the one in which both sides feel they are the winners; it must be viewed by their constituencies as the win-win deal. It seems Modi’s approach has found some acceptance in the Trump camp as well. The US Secretary of State, Mike Pompeo, showed this flexibility at his 2+2 meeting with his counterpart, S Jaishankar, in Delhi a month back when he reportedly said that compromises and tradeoffs usually lead to agreements.

India and the US trade negotiators have reportedly been working on a document tentatively titled “Indo-US shared vision: near-future outcomes”. While its details have not been revealed, it is expected to address the issues related to restoration/partial restoration of the Generalised System of Preferences (GSP) which was abruptly withdrawn by Trump, impacting the export of thousands of Indian products; data localisation, e-commerce, certain healthcare and pharma items like stent, knee implants, information and communication (ICT) products, solar panels, export of US apples, almonds, pork and other farm products and, of course, Trump’s favourite Harley-Davidson motorbikes. For long, the US has been complaining about India’s high tariffs and non-adherence to intellectual property rights (IPRs). Since the G-7 meeting in France, India and the US have been striving to reach a mutually acceptable understanding. Presently, 17 India-US trade disputes are pending with the World Trade Organisation (WTO).

According to the office of the US Trade Representative, in 2019, Indo-US bilateral trade in goods and services stood at $142.1 billion; India's exports amounted to $83 billion and imports from the US were worth $58.9 billion thus leaving a trade surplus of $24.2 billion. China has a trade surplus with the US of over $500 billion. The US trade deficit with India in 2016 and 2017 was around $29.6 billion, so it now seems to be shrinking. By 2017, the US invested $44.5 billion in foreign direct investment (FDI) while India’s investment in the US is valued at $9.8 billion which supports 1,97,000 jobs.