This week President Trump visits India for the first time to meet with India’s Prime Minister Narendra Modi.
In 2019, the United States had $23 billion trade deficit with India.
The Trump administration is negotiating a trade deal that will boost US exports to India, especially in the energy and food sectors, and reduce U.S. deficit.
Tellurian, an American corporation, is sealing a 2.5 billion sale agreement with Petronet, which is building three regasification terminals in India.
Narendra Modi offered American exporters access to India’s dairy and poultry markets, increasing the food import quotas for U.S. exporters and pledged to reduce tariffs.
The anticipated trade deal will be the result of tough negotiations between the Trump administration and the Government of India. Last year, the United States removed trade privileges for India under the Generalized System of Preferences and India imposed retaliatory tariffs on 28 U.S. products.
India is a geopolitical competitor of China and has opposed the Belt and Road Initiative, expressing concerns that China will use its economic power to extend its strategic influence to countries that have been historically close to India, such as Sri Lanka, Bangladesh, Bhutan, the Maldives, Myanmar, and Nepal.
Sri Lanka holds a prominent position in the Maritime Silk Road, the ambitious project to connect China with Europe through the Indian Ocean. China loaned funds to Sri Lanka for the construction of the Hambantota Port, which is located in the Southern side of the island.
Upon default on the loan by the Government of Sri Lanka, China was granted a 99-year lease of the Port, securing a strategic foothold at the intersection between the Bay of Bengal and the Arabian Sea in the Indian Ocean.
China established close cooperation with Myanmar, funding the construction of major oil and gas pipelines that connect the Port of Kyaukpyu in the Bay of Bengal with the city of Kunming, in the Yunnan Province of China. With these pipelines, China can bypass the Strait of Malacca and Singapore to receive oil and gas from the Mideast.
So far, China has been able to expand its influence in the Indian subcontinent, outmaneuvering India’s efforts to contain it. India cannot thwart China’s expansionism because its economy is much smaller.
Although India has a population close to China’s 1.4 billion people, its economy has a GDP of just 2.7 trillion, similar to France, a country which has five percent of India’s population, while China’s GDP exceeds 14 trillion.
India is trying to develop new infrastructures to create alternatives to China’s Belt and Road Initiative. It is funding new bridges to Bangladesh and across the Brahmaputra River, new container terminals in the Port of Colombo in Sri Lanka, and roads to Myanmar and Thailand.
The United States sees India as a strategic partner to counterbalance China’s growing influence in the Indian subcontinent.
The Trump-Modi deal is expected to boost American investments in Indian infrastructures and to increase defense cooperation and bilateral trade between the world’s two largest democracies.
Francesco Stipo is the President of the Houston Energy Club, a member of the National Press Club in Washington D.C., a Fellow of the World Academy of Art and Science, and recently joined the Bretton Woods Committee. Born in Italy in 1973, Dr. Stipo is a naturalized United States citizen. He holds a Ph.D. in International Law and a Master's Degree in Comparative Law from the University of Miami. To read more of his reports, Click Here Now.
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