Skip to main content

Modi assured Trump last year India would reduce tariffs on US goods 'substantially'

Even as the United States declared it was withdrawing its “preferential trade status” accorded to India, facts suggest, Prime Minister Narendra Modi had “assured” US president Donald Trump last year he would work on going soft on “very high tariffs” imposed on American products coming to India. Addressing a White House media conference on October 1, 2018, Trump had said, I had “spoken to Prime Minister Modi, and he is going to reduce them (tariffs) quite substantially.”
Talking to media, Trump – who announced a new trade deal with neighbouring Mexico and Canada, which abrogated the North American Free Trade Agreement (NAFTA) with the two countries as it allegedly was against US interests leading a loss of billions of dollars – had identified India as one of the countries with whom a new trade deal was under negotiation.
Calling India “tariff king” imposing up to 100 per cent duty on certain goods imported from the US, and expecting a positive response from India, Trump, however, had opined that he was sure Modi would oblige him and reduce the tariff .“My relationship with India is great, with Prime Minister Modi is great, and they are going to start doing a lot. They have already called us to make a deal, we didn't even call them”, the US president had said.
At the media briefing, which lasted for more than one hour, Trump had further said, “India, which is the tariff king… they called us, and they say they want to start negotiations immediately”. The reason he had advanced was, India wanted to keep him happy. “They have to keep us happy, because they understand, they have been wise to keep us happy”, he had added.
Trump had continued, “India charges tariffs of 100 per cent. And if we want to put a tariff of 25 per cent, people from Congress will call, but that's not free trade”, adding, “India charges tremendous tariffs. When we send Harley Davidsons motorcycles, other things to India, they charge very, very high tariffs. And I have spoken to Prime Minister Modi, and he is going to reduce them quite substantially. Nobody ever spoke to these people. He said nobody ever spoke to me.”
Blaming past presidents of his country for this, Trump had said, “I am not trying to be kind of overly dramatic. We have had presidents of the United States and trade representatives; they never spoke to India… They charge us whatever they want… India has a very, very high tariff, they really charge tremendously high tariffs.”
Specifically referring to the Harley Davidson motorcycles, Trump had said, “So you send a motorcycle to India, it's 100 per cent tariff, now that's so high that it is like a barrier, in other words, who is going to buy it? It costs you so much. Now they have already reduced it substantially and it is still too high.”
Trump had ended by stating, “My relationship with India is great, with Prime Minister Modi is great, and they are going to start doing a lot. They have already called us to make a deal, we didn't even call them, they called us to make a deal, which is like shocking to people.”

Options before India

While it is not known if Modi would now negotiate the US following the Trump administration ending India’s classification as a beneficiary developing nation under the Generalised System of Preference (GSP) trade programme, indications are, Indian industry would suffer substantially because of the latest development. US said it took the measure to end India GPS status after “ascertaining” that India has not assured it would provide “fair” and “reasonable” access to its markets.
GPS is the largest and oldest US trade preference programme designed to encourage developing countries by allowing duty-free entry for thousands of products from selected beneficiary nations. Ending India’s beneficiary status, Trump said, “I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”
The US administration had put India on a 60-day notice period, which ended on May 3. Under the GSP programme, nearly 2,000 products, including auto components and textile materials, can enter the US duty-free. India was the largest beneficiary of the programme in 2017 with $ 5.7 billion in imports to the US given duty-free status.
Meanwhile, in what is being termed as a tame response following the Trump decision to withdraw the preferential status, the Modi government said it would “continue to seek to build strong economic ties with US”. Describing the US announcement "unfortunate", a statement from the Union Ministry of Commerce and Industry said, "India, like the US and other nations shall always uphold its national interest in these matters."

Comments

TRENDING

Dalit rights and political tensions: Why is Mevani at odds with Congress leadership?

While I have known Jignesh Mevani, one of the dozen-odd Congress MLAs from Gujarat, ever since my Gandhinagar days—when he was a young activist aligned with well-known human rights lawyer Mukul Sinha’s organisation, Jan Sangharsh Manch—he became famous following the July 2016 Una Dalit atrocity, in which seven members of a family were brutally assaulted by self-proclaimed cow vigilantes while skinning a dead cow, a traditional occupation among Dalits.  

Powering pollution, heating homes: Why are Delhi residents opposing incineration-based waste management

While going through the 50-odd-page report Burning Waste, Warming Cities? Waste-to-Energy (WTE) Incineration and Urban Heat in Delhi , authored by Chythenyen Devika Kulasekaran of the well-known advocacy group Centre for Financial Accountability, I came across a reference to Sukhdev Vihar — a place where I lived for almost a decade before moving to Moscow in 1986 as the foreign correspondent of the daily Patriot and weekly Link .

Boeing 787 under scrutiny again after Ahmedabad crash: Whistleblower warnings resurface

A heart-wrenching tragedy has taken place in Ahmedabad. As widely reported, a Boeing 787 Dreamliner plane crashed shortly after taking off from the city’s airport, currently operated by India’s top tycoon, Gautam Adani. The aircraft was carrying 230 passengers and 12 crew members.  As expected, the crash has led to an outpouring of grief across the country. At the same time, there have been demands for the resignation of Prime Minister Narendra Modi, Home Minister Amit Shah, and the Civil Aviation Minister.

Global NGO slams India for media clampdown during conflict, downplays Pakistan

A global civil rights group, Civicus has taken strong exception to how critical commentaries during the “recent conflict” with Pakistan were censored in India, with journalists getting “targeted”. I have no quarrel with the Civicus view, as the facts mentioned in it are all true.

Whither SCOPE? Twelve years on, Gujarat’s official English remains frozen in time

While writing my previous blog on how and why Narendra Modi went out of his way to promote English when he was Gujarat chief minister — despite opposition from people in the Sangh Parivar — I came across an interesting write-up by Aakar Patel, a well-known name among journalists and civil society circles.

Remembering Vijay Rupani: A quiet BJP leader who listened beyond party lines

Late evening on June 12, a senior sociologist of Indian origin, who lives in Vienna, asked me a pointed question: Of the 241 persons who died as a result of the devastating plane crash in Ahmedabad the other day, did I know anyone? I had no hesitation in telling her: former Gujarat chief minister Vijay Rupani, whom I described to her as "one of the more sensible persons in the BJP leadership."

Why India’s renewable energy sector struggles under 2,735 compliance hurdles

Recently, during a conversation with an industry representative, I was told how easy it is to set up a startup in Singapore compared to India. This gentleman, who had recently visited Singapore, explained that one of the key reasons Indians living in the Southeast Asian nation prefer establishing startups there is because the government is “extremely supportive” when it comes to obtaining clearances. “They don’t want to shift operations to India due to the large number of bureaucratic hurdles,” he remarked.

Guha plans book to counter Dalit, Marxist, and right-wing critics of Gandhi, recalls Modi’s 'pernicious lie' on Patel

Let me first confess: writing about an event three weeks after it has taken place is no good, especially for a newsperson. However, ever since I attended the public lecture by well-known historian Ramachandra Guha on May 18, organised by Sarthak Prakashan for the release of the Gujarati edition of his book monumental book "India After Gandhi", frankly, I kept wondering if he had said anything newsworthy apart from what had already appeared in the media ever since the book's first edition came out in 2007. Call it my inertia or whatever.

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.