US President Donald Trump arrived in India on the February 24 for a two-day state visit. He was greeted by Indian Prime Minister Narendra Modi on his arrival at Ahmedabad with a very warm embrace. Ahmedabad also happens to be Modi's home city. Thereafter, Trump was led to a stadium where more than 100,000 people greeted him for a 'Namaste Trump' rally. Along the way to the stadium Trump was greeted by tens and thousands of people who lined up on both sides of the road. The packed up crowd bursting into deafening cheers upon his arrival -- it was an optic victory for Trump. The media coverage was unreal, even grotesque.
Enormous efforts have gone into making the event the most eventful. A battery of carefully chosen Modi loyalists and workers of his BJP lined the road to accord the President a grand welcome. A massive wall was erected along the route to the stadium to hide the site of Ahmedabad's teeming slums and a large number of slum dwellers were evicted beforehand as well to give the route to stadium a sanitised look. Among the grotesquerie on display also included 40 camel mounted police as part of 10,000 police deployed to provide security. The grotequerie aside, Trump's usual botched pronunciations of simplest of names was equally matched by Narendra Modi's own when he started the proceedings at the rally by praising 'Dolan' Trump.
Donald Trump exactly knew the audience he was addressing at Motera stadium. There was a feel of carnival all round the stadium. He opened his rally speech to the cheering crowd by declaring "America loves India, America respects India and America will always be faithful and loyal friend to the Indian people." But his biggest cheer came when he declared both the US and India were united in their need to 'defend ourselves from the threat from radical Islamic terrorism'. But no mention was made by any one about the fact that far larger number of Americans die each year from domestic and other gun violence than from 'radical Islamic terrorism'.
It was a real mutual appreciation fest on public display by two leaders, one a Hindu supremacist and other a White supremacist showering banalities on each other. On one side, banalities include 'great leader' and 'servant of humanity' by Modi and 'good friend' and 'leadership' by Trump despite both leaders' serious innumerable character flaws notwithstanding their shared enthusiasm for driving down the road to full-fledged fascism. Trump's appreciation of Modi ranks almost equal to Netanyahu, Mohammad bin Salman (MBS) and Kim Jong-un. No wonder Modi both figuratively and literally embraced Trump at the start of the 'Namaste Trump' rally.
More importantly, Trump's endorsement of Modi came at a time when Modi needed it the most. It was a great victory for Modi when Trump made the most preposterous claim that the Modi government 'worked very hard to have great and open religious freedom', when in fact the Modi government has been doubling down on executing anti-Muslim Hindutva agenda by legislating the anti-Muslim Citizenship Amendment Act (CAA) and its bigoted twins the National Register of Citizens (NRC) and National Population Register (NPR).
Trump's own anti-Muslim bigotry is well known. In essence, he endorsed Modi's anti-Muslim policies and actions which has given Modi the encouragement to further double down on the repression of Indian Muslims as reflected in Hindu supremacist mobs attacking Muslim homes, businesses and mosques in Delhi Chanting "India belongs to Hindus" soon after Trump departed Delhi.
Now India's state sanctioned Islamophobia has singled out India's 175 million Muslims being responsible for spreading corona virus. This has added further fuel to Islamophobia resulting in increased vigilante violence against the Muslim population encouraged by Hindu supremacist leaders including the boycott of Muslim owned shops. According to The Guardian (April 29), the US Commission on International Religious Freedom recommended for India to be put on a religious freedom blacklist over a drastic downturn under Prime Minister Narendra Modi.
Despite all the media hypes and the Trump-Modi camaraderie, the 8,000 miles trip to India failed to produce any trade deal, even a small one laying bare troubling contradictions in the overall bilateral relationship. The trip was long on political shows but short on substance. Even before Trump took office, US policy makers were frustrated with India's high tariffs and non-tariff barriers and India's approach to intellectual property rights. Now with Trump's pathological obsession with trade deficits, things have gone from bad to worse. The US-India trade relationship is rapidly reaching a point of crisis as Trump declared Indian tariffs were no longer acceptable.
Before Trump arrived in India, press reports in Indian were on the optimistic side on concluding a trade deal. The Hindustan Times even foreshadowed that signing of the US-India deal would be the centre piece of Trump's visit. Even Indian government officials who should have known better, also seemed to be optimistic of such an outcome. But the US-India trade negotiations run into choppy waters even before Trump arrived in India.
Obviously, disappointment and confusion were all over the place as the US and India failed to meet the high expectation of a trade deal, even a modest one, despite both the leaders predicted much bigger things to come. It was reported that a modest trade agreement was abandoned because Trump was not willing to restore India's trade benefits under the WTO Generalised System of Preferences (GSP) tariff rules. Overall, the trade frictions between the two countries go beyond frictions over the GSP, they also include bilateral trade deficits (Trump has a pathological aversion to trade deficits) and tariffs.
But India's red carpet treatment of Trump and the bonhomie belie growing trade tensions between the two countries. Negotiations from both sides have worked over close to two years to resolve a variety of market access and intellectual property disputes that stood in the way but without any successful resolution of those issues. Trump described India as the largest tariff country in the world. He further told reporters that he 'like Prime Minister Modi a lot' but 'we are not treated well by India'. Both countries hit each other with retaliatory tariffs.
US Trade Representative Robert Lighthizer who was responsible for leading talks with India to secure a trade deal was not part of the Trump entourage. In fact, at the last moment, Lighthizer said that he would not be able to travel to India indefinitely to finalise the terms of the trade deal, prior to Trump's visit. No doubt, there was disappointment on both sides, because a deal seemed so close, almost inevitable.
The US-India overall bilateral relationship including bilateral trade relationship is about two decades old but progressed quite significantly during this period. Bilateral trade in goods and services grew at an annual average rate of 7.6 per cent between 2008 and 2018, more than doubling in value from US$ 68.4 billion to 142.1 billion during this period. Now, the US stands as the second largest trading partner and the single largest export destination of India. One important feature of trade flows between the two countries is that India maintains trade surplus in services with the US.
The growing trade relation between the two countries is significantly underpinned by growing strategic relationship which emerged during the Presidency of George W. Bush. The US exported US$15 billion in arms to India during this decade compared US$500 million before the entire period preceding the current relationship evolved. Despite failing to conclude a trade deal, India announced the conclusion of a number of arms deals with the US amounting to US$3.5 billion prior to the arrival of Trump in India. Trump is keen to boost arms sales to India for both commercial and strategic reasons. That was the only trade deal, if one calls it a trade deal, was signed during Trump's visit. Trump even added a sweetener to the deal by promising to provide India 'with some of the best and most feared military equipment on the planet'.
India and the US have failed to make a trade deal and talks ended up in a complete stalemate. Trump instead said that 'big deal' on trade would come about after the US presidential election this November. But many analysts believe nothing much will really happen except some face saving deal to present for public consumption and then continue doing business as usual.
What does a 'comprehensive' or a 'big deal' mean? Some analysts point to the possibility (rather very remote) of a Free Trade Agreement (FTA). If one goes by India's tactics in negotiating a FTA with the EU stretching now over a decade (nobody knows whether those negotiations are on or off at the moment) should think twice about the possibility of India undertaking any negotiation on a FTA with the USA when Trump is at the helm. Failure to reach a small, limited trade agreement also further reinforces that a US-India FTA is still far way off.
The focus, so far, has been on negotiating a trade deal primarily geared towards market access for goods on both sides allowing a range of other important issues to fester involving trade in services and investment. They encompass issues such as intellectual property rights, digital services, and better protection of investment through transparent and predictable regulatory measures.
Trade has been the weak link in an otherwise rapidly advancing Indo-US relationship and a rising trend in trade volumes between the countries. Trade tensions are not likely anyway to impede their growing strategic partnership. According to the Stockholm International Peace Research Institute (SIPRI), US export of weapon systems to India grew by more than five folds between 2013 and 2017. But there also remains the question whether growing defence sales to India are taking place within a strategic framework or simply on a transactional basis for both sides with an implicit understanding that economic relationships are not part of the strategic relationship.
Muhammad Mahmood is an independent economic and political analyst.
