Trading Punches: Can Donald Trump and Narendra Modi hug and make up?
What happens when estranged partners want to signal where their relationship is finally headed? Either they send chocolates and appropriate WhatApp emojis to each other to indicate they want to kiss and make up. Or they harden their stand over differences and head to the courts to formalise the separation.
Till a week ago, relations between India and the US resembled those of a couple heading for a messy divorce. On May 31, a day after Narendra Modi was sworn in as prime minister for a second term, United States president Donald Trump chose to play spoilsport. He announced he was going ahead with his order to withdraw the preferential tariffs that India had enjoyed under the US's Generalized System of Preferences (GSP). His reason? The Modi government had not " assured the United States that India will provide equitable and reasonable access to its markets". India had been a beneficiary of the GSP programme from 1976; in 2018, it covered $6.3 billion, or 12 per cent of the goods exported to the US. Though the duty concessions availed under it amounted to only $240 million last year, the withdrawal of GSP privileges, which came into effect on June 5, will affect the competitiveness of some 1,900 products India exports under the system.
On June 15, a fortnight after the Trump action, India retaliated by imposing higher tariffs on 29 goods it imports from the US, including apples, almonds, walnuts, chickpeas, lentils and boric acid. Duties for almonds, for instance, were hiked by 20 per cent. Last year, India bought $543 million worth of almonds, or half the total value of almonds the US exported-and the duty hike will hurt US growers. India had, in fact, announced higher duties on these products in June 2018, after the US raised tariffs by 25 per cent for steel and 10 per cent for aluminum imports from India. But India
