On Thursday, President Donald Trump demanded India withdraw retaliatory tariffs imposed by New Delhi this month, calling the duties “unacceptable,” signaling trade ties between the two countries are deteriorating.
India has placed higher duties on 28 U.S. products after the United States withdrew tariff-free entry for certain Indian goods.
President Trump is also concerned with Delhi’s plans to restrict cross-border data flows and impose stricter rules on e-commerce that hurt U.S. firms operating in India.
“I look forward to speaking with Prime Minister Modi about that fact that India, for years, having put high tariffs against the United States, just recently increased the tariffs even further,” President Trump said on Twitter. “This is unacceptable and the tariffs must be withdrawn,” President Trump said. The President will meet with Modi at this week’s G-20 summit in Japan.
President Trump in May scrapped trade privileges for India under the Generalized System of Preferences (GSP), under which New Delis was the biggest beneficiary that allowed duty-free exports of up to $5.6 billion.
India initially issued an order in June last year to raise import taxes as high as 120 percent on a slew of U.S. items, incensed by Washington’s refusal to exempt it from higher steel and aluminum tariffs. However, New Delhi repeatedly delayed raising tariffs as the two nations engaged in trade talks. Trade between them was worth $142.1 billion in 2018, with India having a surplus of $24.2 billion.
The relationship took a hit with India’s sudden introduction of new e-commerce rules for foreign investors in February. That angered the United States, which saw a protectionist New Delhi effort to help small traders at the expense of U.S. firms such as Walmart and Amazon.com. Companies such as MasterCard and Visa have also been battling Indian central bank rules that mandate them to store their data only in India.
