Days ahead of his India visit, US President Donald Trump on Thursday said the two countries could make a "tremendous" trade deal. "We're going to India, and we may make a tremendous deal there," Trump said in his commencement address at the Hope for Prisoners Graduation Ceremony in Las Vegas. Trump, accompanied by First Lady Melania Trump, is scheduled to travel to Ahmedabad, Agra and New Delhi on February 24 and 25.
Ahead of the visit, there have been talks about India and the United States agreeing on a trade package as a precursor to a major trade deal.
During his commencement address, Trump indicated that the talks on this might slowdown if he did not get a good deal.
"Maybe we'll slow down. We'll do it after the election. I think that could happen too. So, we'll see what happens," he said.
"But we're only making deals if they're good deals because we're putting America first. Whether people like it or not, we're putting America first," Trump said.
Bilateral India-US trade in goods and services is about three per cent of the US' world trade.
In a recent report, the Congressional Research Service (CRS) said the trading relationship is more consequential for India -- in 2018 the United States was its second-largest goods export market (16.0 per cent share) after the European Union (EU, 17.8 per cent), and third largest goods import supplier (6.3 per cent) after China (14.6 per cent) and the EU 28 (10.2 per cent).
"The Trump administration takes issue with the US trade deficit with India, and has criticised India for a range of 'unfair' trading practices," the CRS said.
"Indian Prime Minister Modi's first term fell short of many observers' expectations, as India did not move forward with the anticipated market-opening reforms, and instead increased tariffs and trade restrictions," it said.
"Modi's strong electoral mandate may embolden the Indian government to press ahead with its reform agenda with greater vigour. Slowing economic growth in India raises concerns about its business environment," CRS said.
As per a fact sheet issued by the Council on Foreign Relations (CFR), trade in goods and services between the two countries from 1999 to 2018 surged from USD 16 billion to USD 142 billion.
India is now the United States' eighth-largest trading partner in goods and services and is among the world's largest economies.
India's trade with the United States now resembles, in terms of volume, the US' trade with South Korea (USD 167 billion in 2018) or France (USD 129 billion), said Alyssa Ayres from CFR.
"The United States for two years now has set out in stone pretty clearly the things that they wanted to see to try to get an agreement, and it's basically then on India's doorstep on whether they want to take those steps," Rick Rossow, Wadhwani Chair in US-India Policy Studies at the Center for Strategic and International Studies think-tank told reporters during a conference call.
"The list of US asks has been pretty static all throughout. Not to say that any of these things are easy for India to do, but the United States to my knowledge didn't change the goalposts just because we now consider India to be a middle-income country. The things that we wanted to see happen to get this trade agreement have been pretty static all throughout, no matter how difficult they are," he said in response to a question.
Trump urged to push for favourable pulse crop provision in trade deal with India
Two US Senators have urged President Donald Trump to "push for favourable pulse crop provisions" in any trade deal the United States signs with India.
"As you prepare for your upcoming trip to India, we write to encourage you to push for favourable pulse crop provisions in any deal the United States may sign with the Republic of India," two Republican Senators Kevin Cramer and Steve Daines wrote in a letter to Trump.
Daines represents the state of Montana, while Cramer is from North Dakota. Both Montana and North Dakota are major pulse producing states.
In their letter dated February 19, the two Senators said Montana and North Dakota are the top two producers of pulses in the United States and India is the world's largest consumer of pulse crops, contributing to approximately 27 per cent of the world's consumption.
The most commonly consumed pulse crops in India are lentils, chickpeas, dried beans, and peas, yet the Republic of India has levied substantial tariffs on American pulse crops.
"Unfair Indian tariffs on pulse crops have substantially harmed our producers back home," they wrote.
"Following the removal of lndia from the Generalized System of Preferences (GSP) on June 5, 2019, additional tariffs were placed on American pulse crops. Currently, tariff rates are 30 per cent for dried beans, 50 per cent for lentils and peas, and 70 per cent for chickpeas.
As a result, US pulse crop producers face a significant competitive disadvantage when exporting to India," the two Senators wrote to Trump.
"At a time when many producers have been struggling to make ends meet, your work to expand market opportunities for US farm commodities has been critical. Engaging Prime Minister Modi on pulse crop tariffs as part of larger discussions to enhance the economic cooperation between our countries would be mutually beneficial to both American producers and Indian consumers," Cramer and Daines wrote.
(with PTI inputs)