2019-08-11_Business_Today

August 11I 2019 I BUSINESS TODAYI 49

be bought this year itself – and India’s oil companies buying from

US to compensate for the reduction of supplies from Iran. To im-

press upon the US that it has other gains from India, officials have

pointed out that Indian students comprise 18-20 per cent of all

foreign students in the US and spend around $10 billion there an-

nually. Indian tourists to the US are also a considerable number.

“While looking at the trade surplus, these elements should also be

considered,” says a senior commerce ministry official.

The US also wants a bigger role for its companies in India’s

defence manufacturing. The procurement of arms and ammuni-

tion is kept out of the trade balance sheet but commerce ministry

notes that many of the components will require imports, which

US companies could compete to provide, thereby improving the

country’s trade balance vis-a-vis India.

With Trump set to seek re-election in 2020, he would want

to refurbish his image as a tough negotiator, and continue to be

hard on India. “The Trump administration has been very diffi-

cult to negotiate with,” says Kanwal Sibal, former foreign secre-

tary. “India must remain aggressive on trade issues and make the

Trump administration realise that tariffs are much more complex

matters than bilateral conversations.” He pointed out that if India

lowered tariffs, there was no guarantee the US would be benefi-

ciary. “If tariffs are lowered, China might be in a better position

to take advantage than many of the American players,” he added.

Indian diplomats further noted that Washington has challenged

the dispute redressal mechanism of the WTO, and is insisting on

bilateral negotiations. But overall, experts believe the Trump ad-

ministration is ready to allow New Delhi breathing space to deal

with the geopolitical issues related to Russia, Iran and Afghani-

stan, and find solutions to the trade challenges.

@anileshmahajan

Wants India to

actively back its

Iran sanctions,

stop buying Iran oil

The US has not extended its

sanctions to Chabahar port

in Iran, in which India has

invested heavily, as long as

the trade is not with Iran.

India’s oil supply – and oil

import bill – remains

unaffected

Has excluded India from its

list of countries entitled to

Generalised System of

Preferences by which exports

from such countries face

very low/zero tariffs

India’s forthcoming

foreign trade policy will

accommodate this

India may extend other benefits

to its affected exporters. But

they are bound to take a hit

Wants India to buy

more combat

helicopters, fighter

planes, drones from

US companies

India wants joint ventures

with local companies in

keeping with its Defence

Acquisition Council’s

strategic partner policy

No decision yet

ASHWANI

MAHAJAN

National

Co-convener,

SJM

“Our internal
survey has
shown that the
increase in tar-
iffs is benefitting
Indian players”

KANWAL

SIBAL

ex-Foreign

Secretary, GOI

“If tariffs are

lowered, China

might be in a

better position

to take advan-

tage than many

of the American

players”