Published: Sun, June 30, 2019
Markets | By Otis Pena

Pompeo meets Modi amid trade tensions, Iran crisis

Pompeo meets Modi amid trade tensions, Iran crisis

The US recently removed preferential trade privileges for India, and New Delhi responded by imposing tariffs on some two dozen US products.

Trump's tweet came a day after the India visit of Secretary of State Mike Pompeo, during which he met Modi, External Affairs Minister S Jaishankar and National Security Advisor Ajit Doval and discussed a number of issues, including the trade friction.

The US had hiked tariffs on steel imports by 25 percent and aluminium imports by 10 percent previous year, neglecting India's continuous requests for an exemption citing the long-standing trade ties with the country.

Government sources rejected Trump's argument, saying Indian tariffs were not that high compared to other developing countries.

On Wednesday, US Secretary of State Mike Pompeo was in New Delhi and called on Prime Minister Modi and held talks with Foreign Secretary S Jaishankar. Trump and Modi are expected to meet on June 28. "The United States has been clear we seek greater market access and the removal of trade barriers in our economic relationship".

"We welcome your assertiveness, because it's good for the world", Pompeo said.

India signed an agreement to buy five S-400 Triumf air defence missile systems in a deal worth US$5 billion from Russian Federation, even though the United States had warned that it risked sanctions under a federal law that imposes curbs on Iran, North Korea and Russian Federation. "It's important that global energy supplies remain predictable and affordable, and I think that's a concern to which Secretary Pompeo was very receptive", said Jaishankar in response to a journalist's question. "It is natural that you will have trade issues and I think the real test of our intentions is our ability to address them effectively". Although, Russia has always been a major arms supplier to India, the USA has become India's top defence supplier in the last two years. While the strategic side showed convergence on issues such as terrorism and the need for closer defence interaction, the economic side of the relationship needed to be worked on.

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"India stands committed to further deepen economic and cultural relations with United States of America", he said.

Meanwhile, Pompeo told an English daily "The Times of India" that he was hopeful that Modi and Trump would make India-U.S. relationship work. India's economy is highly reliant on crude imports.

The Generalized System of Preference (GSP) is the largest and oldest U.S. trade preference programme and is created to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

It would be tragic if the Trump administration forgot why India matters to larger USA interests, and failed to reverse the slide into competitive trade grievances poisoning the atmosphere today.

India will go by its national interest on S-400 missile defence deal with sanctions-hit Russia, External Affairs Minister S Jaishankar told his U.S. counterpart Mike Pompeo on Thursday, even as the two sides agreed to work their way through the contentious pact as also other prickly issues, including those related to trade, to take the bilateral ties to new levels. The trade balance is in favour of India.

In a speech at the India International Center, attended by Indian diplomats, Pompeo began with the customary Indian greeting, "Namaste", then outlined what he called a "new age of ambition for our two proud nations".

Modi said that the key topics they would discuss include Iran, 5G, bilateral and defense relations. "These were areas that the prime minister of Japan hoped that he would get the understanding and support of the G20 members, including India".

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