‘Namaste Trump’: A Show Of Strength For India-U.S. Ties?

‘Namaste [Hello] Trump’ is set to commemorate President Donald Trump’s maiden visit to India. The President loves a good spectacle, which is what the Indian Prime Minister Narendra Modi aims to deliver through this event. The welcome in store for the U.S. President in Ahmedabad, the largest city in Modi’s home state Gujarat, will be unlike any other. A crowd of approximately 100,000 people will expect him to hold a rally in the world’s newly built largest cricket stadium. While an additional 125,000 people, according to the Ahmedabad Municipal Corporation, will line the streets that Trump’s motorcade will take to get to the stadium. ‘Namaste Trump’ is designed specifically to highlight the strengthening relationship between the U.S. and India.

Ironically, ‘Namaste Trump’ comes against a backdrop of strained economic ties between the two countries. The President has repeatedly stated his concern regarding India’s trade barriers, even labelling India the “tariff king”. “We’re not treated very well by India, but I happen to like Prime Minister [Narendra] Modi a lot,” Trump said to reporters on 18th February 2020. India’s External Ministry spokesperson Raveesh Kumar responded to Trump’s comment by stating that “I think the context was in terms of balance of trade. In the last few years, efforts have been made by India to address this particular concern, and now the U.S. is our sixth largest source of crude oil imports. We are also purchasing a large number of civilian aircraft and feel that some of these steps will bridge the trade deficit.”

According to the BBC, India’s average tariff rate in 2018 was 17.1 %, which is significantly higher than the U.S., Japan and the EU. The 2019 National Trade Estimate Report on Foreign Trade Barriers, published by the U.S. government, states that India’s tariff rates on other members of the World Trade Organisation (WTO) remain the highest of any major economy. Conversely, India argues that its average tariffs are within the limits of the WTO rules on trade. New Delhi also added that India performed better in a different measure of tariff rates, called the trade-weighted average. This measure takes the volume of imports and calculates the average of all tariffs which are actually collected. According to the trade-weighted average, India’s average tariff rate was 11.7%, significantly lower than what the previous measure demonstrated.

The primary aim of Trump’s visit to India was to address these strained economic ties by drafting together a trade deal. Negotiators from both sides were trying for weeks to come to an agreement however, no breakthrough has been announced yet. Reuters reported that a planned trip by the United States Trade Representative Robert Lighthizer was also cancelled amidst the challenges faced in negotiations by the two sides.

“We can have a trade deal with India, but I’m really saving the big deal for later on,” said Trump on 18th February. “We’re doing a very big trade deal with India. We’ll have it. I don’t know if it’ll be done before the election, but we’ll have a very big deal with India,” he said in a transcript released by the White House. In India, the External Ministry spokesperson was noncommittal regarding a trade agreement with the U.S., “We would not like to rush into a deal as…there are many decisions which actually could impact millions of people on the ground, and some also [come] with long-term economic consequences. So, we don’t want to create an artificial deadline.”

Instead, New Delhi and Washington have now decided to focus on their strengthening political and security alliance at ‘Namaste Trump’. According to Reuters, Modi is set to procure US$2.6 billion worth of military equipment ahead of Trump’s visit to India. Defence has become a central driver of the strengthening bilateral relations between the two countries, with more deals worth US$3.5 to US$ 4 billion in the pipeline, according to the Nikkei Asian Review.

All in all, while ‘Namaste Trump’ has failed to bring about a trade agreement between India and the U.S., the event will bolster the bilateral political and security alliance. Both countries are motivated by levelling the intra-Asian balance of power, to keep China’s rise in Asia, in check. Ultimately, President Trump’s visit to India will become a show of strength for India-U.S. ties, despite the friction in their economic relations.