Nice memories but no trade deal for Trump

US president's visit to New Delhi, ends with disappointment despite deepened defence ties

Photo: EPA Indian Prime Minister Narendra Modi (R) stands with US President Donald Trump on Tuesday after a meeting at Hyderabad House in New Delhi, India.

The President of the United States Donald Trump failed on Tuesday to strike a trade deal with India at the end of his two-day visit, which was big on photo opportunities but short on substance and overshadowed by deadly riots. Speaking at the end of a short tour that saw him hold hands at the Taj Mahal with First Lady Melania and address a huge rally, Trump said only that they had made "tremendous progress" towards an accord - a statement later repeated by White House's press service.

"The United States has to be treated fairly and India understands that," the US president told a news conference along with Indian Prime Minister Narendra Modi, continuing that "if a deal happens with India, it will be towards the end of the year."

Modi also struck an optimistic note about a potential trade agreement, saying ties were expanding in spheres ranging from defence, the energy sector and information technology, and that a resurgent India would present new opportunities for the US. Calling the two countries "natural partners," Modi said they can help bring peace, progress and security not just in the Indo-Pacific region, but in the entire world.

"We are inspired by a long-term vision, not just short term considerations," Modi insisted.

US-Indian trade relations have worsened in recent years as Trump's "America First" aim of reducing deficits has collided with the "Make in India" mantra of Prime Minister Narendra Modi. While minor compared to his battle with China, Trump has imposed tariffs on Indian steel and aluminium and suspended duty-free access for certain goods in an effort to cut the $25bn US trade deficit with Asia's third-biggest economy. Under pressure to deliver ahead of his November re-election battle, Trump has pressed for greater access to the vast Indian market of 1.3 billion people for US dairy producers and makers of medical goods. But Modi, battling to fire up a slowing economy hampered by inflation and a widening budget deficit, has responded with higher tariffs on US goods including $600m worth of Californian almonds.

Yet, the pair did announce $3bn in defence deals, including for the sale of naval helicopters, proof of their deepening strategic alliance to counter the rise of China in the region. The agreement follows a $1.9bn deal of an integrated air defence weapon system to India, approved by the US State Department on 10 February, in addition to a 2015 contract for the sale of 22 Apaches to the country.

"The strengthening in defence ties between India and US is an important aspect of our partnership," Modi commented.

A hoped-for finalisation of a limited trade deal between the two nations, however, did not materialise, dashing earlier speculation of a possible partial compromise that would have seen India lowering tariffs on Harley-Davidson motorcycles and other items. Modi said the two sides would instead shoot for a "bigger deal" while the US president said if a trade deal doesn't happen there will be "something else" satisfactory.

"Harley-Davidson has to pay tremendous tariffs when they send motorcycles in here. When India sells motorcycles into the US there is virtually no tariff... That's unfair," Trump told a news conference with Modi.

"I want reciprocal, it has to be reciprocal," he said.

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