Prime Minister Narendra Modi is set to have a crucial meeting with US President Donald Trump on the sidelines of the G-7 Summit in France on Monday, August 26, a meeting that is likely to be dominated by trade frictions between the two countries.
The Trump-Modi meeting assumes significance in the wake of the strain that has popped up in the bilateral relationship on a host of trade and economic issues.
Ahead of the meeting in France on the sidelines of the G-7 summit, the White House said that trade and tariffs would be important topics of discussion between the two leaders.
ADVERTISEMENT
“They will look for solutions on the trade front. The U.S. is looking to India to reduce tariffs and open its markets,” a senior administration official said, ahead of the meeting early this week.
Early this week, India’s Ambassador to the U.S. Harsh Vardhan Shringla had met Graham at the U.S. Capitol.
According to the Indian Embassy, they “discussed the immense potential for closer strategic and economic ties between the world’s oldest and largest democracies.”
ADVERTISEMENT
India has raised tariffs on 28 items, including almond, pulses and walnut, exported from the U.S. in retaliation to America’s withdrawal of preferential access for Indian products.
The Trump administration wants Prime Minister Modi to lower the trade barriers and embrace “fair and reciprocal” trade.
Trump has also criticised India’s high import tariff on the iconic Harley Davidson motorcycles as “unacceptable” though acknowledging that his “good friend” Prime Minister Modi has reduced it from 100% to 50%.
Last February, India slashed the customs duty on imported motorcycles like Harley-Davidson to 50% after Mr. Trump called it “unfair” and threatened to increase the tariff on import of Indian bikes to the U.S.
The government on June 21 last year decided to impose these duties in retaliation to the U.S. decision of significantly hiking customs duties on certain steel and aluminium products.
America, in March last year, imposed 25% tariff on steel and a 10% import duty on aluminium products.
As India is one of the major exporters of these items to the U.S., the move has revenue implication of about $240 million on domestic steel and aluminium products.
India has also dragged the U.S. to the World Trade Organisation’s (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.
India exports steel and aluminium products worth about $1.5 billion to the U.S. every year. India’s exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.