The United States President Donald Trump is set to visit India next week, but the much-anticipated trade deal with country is off the table, as U.S. Trade Representative Robert Lightizer has cancelled the visit. As per a report by Suhasini Haider of The Hindu, India’s push for full reinstatement of GSP (Generalised System of Preferences) and tough stance of the opening of Agriculture sector including dairy, has pushed even the modest trade deal that was set to be announced, in a limbo.
India was not ready to liberalize e-commerce, and investment norms for retail, but the major issue was the agriculture sector, where Piyush Goyal, the Minister of Commerce and Industry, was not ready to concede an inch.
India has 23.2 billion dollars trade surplus with the United States, and therefore, Trump wanted a trade deal in favour of industries where the American companies have an advantage. The protectionist regime of Trump has slapped 25 per cent tariff on steel and 10 per cent aluminium, and this hit India exporters badly.
Trump’s protectionist policy-makers were out to dictate India to an unfavourable trade deal, with the threat of slapping tariffs, as the US did with China. But the Indian negotiators, led by Piyush Goyal, were relentless.
“Contentious issues such as market access for several agriculture products, dairy items and medical equipment have still not been ironed out. So, an ambitious trade deal between the two countries seems unlikely with just a little more than a week left for the visit,” said a ministry official, as per report by The Hindu Business Line.
Piyush Goyal, India’s Commerce and Industry Minister, who is at the helm of the deal, has already said that any free trade deal will be signed only based on the ‘National Interest’ of the country. Such a tough negotiating style has rarely been seen from any Indian government. This shows Commerce Minister and Piyush Goyal’s unrelenting stance towards Indian interests.
Throughout the political history of post-Independence India, the governments of the country have been very poor negotiators. In dealing with our neighbouring nations- Pakistan and China, the government of Jawaharlal Nehru and Indira Gandhi succumbed very easily even when they were negotiating from a position of strength.
Pakistan lost four wars (1947-48, 1965, 1971, and 1999) with India, but, we could not take Pakistan Occupied Kashmir back. Even in 1971, when India has 93,000 prisoners of War (PoW) from Pakistan, and Indira Gandhi had a chance to take back PoK, the government negotiated poorly.
Cleary, absolute ‘National Interest’ has not been supreme for the previous government in dealing with foreign countries. But, in Modi government, the ‘Chanakya School of foreign policy’ is held in high regards. According to this school of thought, a country should adhere to ‘Realism’ on foreign policy matters and ‘National Interest’ should be supreme while dealing with any other country. This is in stark difference with ‘Nehruvian foreign policy’ which used to see foreign policy as a tool of ‘international good’ rather than ‘National Interest’.
The poor negotiation skills of Indian governments, especially the Congress-led ones, were on display even when the government-brokered trade deals.
The ASEAN-India FTA, signed in 2009 by the UPA government gave disproportionate concession to the countries like Vietnam and Indonesia. India agreed to eliminate 74 per cent of tariff lines while Indonesia and Vietnam eliminated only 50 and 70 per cent tariff lines respectively.
The then CM of Kerala, V. S. Achuthanandan, led a delegation to PM Manmohan Singh to protest against a free trade deal with ASEAN. Kerala, a major exporter of plantation products, experienced a setback due to the South Asian Free Trade Agreement (SAFTA), signed in 2006 by the UPA government. The cheap coconut imports from Sri Lanka hurt the state’s coconut cultivation industry.
A tough negotiator like Piyush Goyal, who has a rich experience in the field of international trade, could surely bargain better than Kamal Nath or Anand Sharma (trade and commerce minister during UPA regime) who were novices in subject matter expertise.
In November last year, US President Donald Trump praised the negotiation skills of the Indian side. “We’re trying very hard to make better trade deals with India. But, they’re very good traders. They’re very good negotiators. You would say right. The best. So we’re working. And it’s moving along,” said trump.
The shrewd business skill of Indian traders is being praised by countries across the globe. Indian businessperson is regarded as best negotiators in foreign countries like the United States, but, the Indian government under Congress party signed hurried and poorly negotiated trade deals, which harmed Indian interest.
Under the leadership of PM Modi and Commerce minister Piyush Goyal, the Indian side is negotiating better deals whether it is trade or security. This has happened because the government has adopted Chanakyan school of foreign policy which argues for the supremacy of ‘National Interest’.