CNBC-TV18 spoke with former Foreign Secretaries Shashank and Kanwal Sibal to gain insights into what can be expected from Modi’s US visit.
Below are the excerpts of the discussion.Q: What do you think will be Prime Minister Modi’s big message? We’ve already said that we would take back all illegal Indians in the US, if their identities are clarified. But in terms of trade, in terms of defence, what would we like to achieve from this visit?
Shashank: We have the agreement on critical technologies and emerging technologies. At the same time, we find there are a lot of delays which have been taking place in the supply of engines for our Tejas aircraft and that puts into jeopardy all the preparation that we have to make for our own aircraft and other equipment. Therefore, that would be another issue.
In the past, also, we have been discussing with the Americans that when we want to buy any defence equipment from them, we would also prefer to have upgradation and transfer of technology to the extent possible. Of course, they would have their own reciprocal requirements. So, we have to keep that in mind, how best it is achieved. That’s about the defence.As far trade is concerned, under some policies the Americans cut out India’s name from their General System of Preferences (GSP) and the duty-free import of handicrafts and handloom’s. Prime Minister would like that most of our items which are exported to Americans are not the very highest quality like the Chinese, but they are the items which are needed by Americans into their own production processes or for their own households. So therefore, we have to see that those items are allowed duty free as far as possible, and we can sign some kind of duty-free reciprocal agreements with them.
Second is that, yes, there are certain items which we don’t want to buy, and there are heavy duties, because there is a responsibility on the Indian government not to encourage consumption of those items which are not really required for our people. So therefore, we can try to reduce the duties on those items, if the Americans are very keen that we should buy Harley Davidson, etc. So, I think there is a kind of reciprocal thing which we need to follow.
Third one is that most of the tariffs these days are put on a uniform basis. There is no singling out. If there is a singling out of a country, then naturally there is a pressure on that country also to reciprocate. We would not like to enter that track with Americans.
Q: Where do you think India is going to come under pressure? Will it be cars? Will it be pharmaceuticals? Will it be buying more security equipment? Where is that tariff pressure going to come in? The sense that we get is that there cannot be any trade agreement or any kind of major deal. But this visit will send a road map of what we want to achieve, at least by the Trump visit to India this year.
Sibal: During his first presidency, there were pretty intensive discussions on a number of items which they wanted to sell in India and wanted us to reduce tariffs on them, whether they were agricultural products and IT products, medical devices and things like that, we engaged them in serious negotiations. But my understanding is that initially there were five items, and then when we agreed that we will lower duties on the five items, then they added more items to the list. And when we were willing to look at that, then they added more items again. So, this process went on because the USTR at the other end was an extremely tough person when it comes to these issues, and a great believer in tariffs and so is the new USTR, Treasury Secretary and Trump himself, who is a great believer in tariff wars and he’s using that now as a weapon against so many countries, even against his allies like Canada and Mexico. And he slapped 10% tariffs on China. He’s not actually taken a decision on raising tariffs against India as yet. But even in the conversation Prime Minister had with him, he made his views known that India has very high tariff levels, and India should buy more security equipment from the United States. So, he’s clearly made his agenda known, and these are the issues that he’s going to raise with us.
Now we’ve already placed an order just before Trump took over office for $5 billion worth of armed drones from the United States. There are a couple of other items like a military vehicles and missiles, these are the issues which are already on the table. And this is something that he will try to put. But we cannot make this visit as some kind of buying and selling defence, that is not the purpose of this visit.
And then finally, we want joint development and joint production in India as part of Atmanirbharta, United States under Trump wants everything to be manufactured in the United States. So, there is a bit of a clash in the perspectives.
