DESPARDES — President Donald Trump is heading Monday on his first official trip to India, its second largest trading partner after China, and a strategic ally in the region amid reports that PM Modi’s cabinet on Wednesday approved a government-to-government $2.6-billion deal for two dozen military helicopters from U.S. defense firm Lockheed Martin.
Trump’s visit comes as the two countries build upon their close political and security ties, with New Delhi turning to Washington as a top arms supplier, edging out traditional partner Russia.
The bilateral agreement to seal the deal is expected to be signed after Prime Minister Narendra Modi’s talks with US President Donald Trump on February 25, report Indian media citing top sources.
Trade deficit between the two remains a matter of concern for the US.
Since Trump took office in 2017, long-standing trade differences between the two countries have come to the fore, with Trump calling India the tariff king.
India has increased import import tariffs over the last two years to curb cheap goods from abroad and support small- and medium-sized local manufacturers.
In November, Modi pulled India out of the world’s biggest regional trade deal. And earlier this month, his government proposed in its budget to change rules that will allow it to ban the import of any goods it deems harmful to domestic industries.
His government also raised import levies on medical equipment, footwear and furniture in the budget, and said it will strengthen rules to allow for additional levies to be imposed when imports of some goods surge significantly.
The measures appear like political double-speak, coming from Modi, who in his January 2018 keynote speech at the World Economic Forum in Davos, lamented the rising trend of protectionism and called on fellow leaders to embrace more open trade.
US and India have warred over everything from tariffs on farm goods to Harley Davidson motorbikes and price caps on medical devices and India’s new rules on local data storage.
Trump said the United States and India were working on a major trade deal, but he was not sure if it would be completed before the presidential election in November.
Ahead of his visit, negotiators have been trying for weeks to put together a limited accord giving the US greater access to India’s dairy and poultry markets and lowering tariffs on other products.
But no breakthrough has yet been announced and a planned trip by United States Trade Representative Robert Lighthizer was canceled, underlining the difficulties the two sides face in narrowing differences ahead of Trump’s visit
“We can have a trade deal with India, but I’m really saving the big deal for later on,” Trump told reporters on Tuesday, outside Air Force One at Joint Base Andrews in Maryland.
“We’re doing a very big trade deal with India. We’ll have it. I don’t know if it’ll be done before the election, but we’ll have a very big deal with India,” he said, in a transcript of remarks released by the White House.
“We’re not treated very well by India, but I happen to like Prime Minister Modi a lot. And he told me we’ll have 7 million people between the airport and the event,” Trump said, referring to a roadshow ahead of a “Hello Trump” rally in Ahmedabad, the main city in Gujarat where he will begin the trip.
Prime Minister Narendra Modi is said to be pulling out all the stops for his visit, including hosting him for a reception in a cricket stadium in Gujarat — Modi’s home state.
With input from AP and Bloomberg reports