The two countries also have differences over several issues such as Russian arms sales to India, US sanctions on China’s Huawei Technologies, e-commerce and data localisation.
Mike Pompeo, the US Secretary of State, will arrive in India on Tuesday on a three-day visit with focus on trade and investment issues in the Indo-Pacific region. Pompeo’s nearly a week-long visit to the Indo-Pacific region would start with New Delhi, he would then head to Sri Lanka, Japan and end in South Korea. Pompeo will also meet his new counterpart S Jaishankar on Wednesday, is expected to lay the ground for a meeting between US President Donald Trump and Prime Minister Narendra Modi later in the week at a G20 meeting in Japan. Jaishankar will host a lunch for the US Secretary of State.
India and US are facing quite a lot of issues with regards to trade and domestic manufacturing. While PM Modi is vehemently pushing for “Make in India’ campaign, US President Donald Trump is pushing for US manufacturing to return home as part of his ‘Make America Great Again’ campaign. Other issues such as Russian arms sales to India, US sanctions on China’s Huawei Technologies, e-commerce and data localisation are also on the agenda of talks.
GSP and India's higher tariffs on US products
Recently, after Trump withdrew certain trade privileges from India under the Generalized System of Preferences (GSP), India, too, imposed higher tariffs on 28 US products, including almonds, apples and walnuts.
US Congressman Josh Harder in a letter has asked Pompeo to address new retaliatory tariffs on almonds with PM Modi during his meeting this week. Harder’s district is one of the largest producers of almonds in the country, and India is the top export destination for the product.
Significant talks on terrorism and Pakistan are also set to dominate Pompeo’s visit.
Tighter e-commerce foreign investment rules implemented in India in February have forced Amazon.com Inc and Walmart Inc to rework their business strategies in the country. Walmart last year invested $16 billion in Indian online retailer Flipkart.
The United States has been pushing for data flow across borders in several countries, including India. India has mandated foreign firms to store their payments data locally, hurting companies such as Mastercard and Visa.
The US put Chinese smartphone Huawei on an export blacklist and has asked allies to adopt shared security and policy measures that will make it more difficult for Huawei to dominate 5G telecommunications networks. India has not decided whether to invite the Chinese firm for 5G trials.
The US has said India's plan to buy S-400 surface-to-air missile systems from Russia would draw sanctions under its Countering America's Adversaries Through Sanctions law. India, which signed the deal last year, says the weapons are necessary to bolster defences against China.
(With agency inputs)