US Trade Team's India Visit Called Off, Likely To Be Rescheduled: Sources

Amid a strain in economic ties because of the increased tariff, a planned visit by a US team to India for trade negotiations from August 25 to 29 has been cancelled and is likely to be rescheduled, sources told NDTV Profit on Saturday. 

The team was supposed to carry forward negotiations on the bilateral trade agreement between the countries, which is especially important now, given US President Donald Trump's announcement of  a 25% levy on Indian goods over Russian oil imports, in addition to the 25% tariffs he had imposed before. 

The negotiations would have been the sixth round of talks between the US and India on the bilateral trade agreement and their timing was also crucial because they would have been held around August 27, when the additional 25% tariff is scheduled to take effect. They were also being held ahead of the fall, or September-October timeframe, that was being targeted for the finalisation of the agreement. 

The sources said, however, that the talks are most likely to be rescheduled.

One of the key sticking points of the agreement is the US' insistence on greater market access in the agriculture and dairy sectors, but India has said it cannot accept this as it affects the livelihood of small and marginal farmers. Religious and cultural sensitivities are also being considered in the import of milk.

After the tariff announcement, Prime Minister Narendra Modi made a push for 'swadeshi' (Made in India) products and also gave a strong message of support to farmers and fishermen in his Independence Day speech on Friday.

"Modi is standing like a wall against any harmful policy related to the farmers, fishermen and cattle-rearers of India. India will never accept any compromise regarding its farmers, its livestock rearers, its fishermen," he said during his address from the Red Fort.

A key meeting between Mr Trump and Russian President Vladimir Putin on the Ukraine conflict was also held in Alaska in the early hours of Saturday (India time) and there were expectations that a thaw between the countries would help ease the additional 25% tariff on India.

In comments before and after the meeting, the US President said, cryptically, that he may not have to impose secondary tariffs on countries buying Russian oil.

"Well, he (Russian President Vladimir Putin) lost an oil client, so to speak, which is India, which was doing about 40 per cent of the oil. China, as you know, is doing a lot...And if I did what's called a secondary sanction, or a secondary tariff, it would be very devastating from their standpoint. If I have to do it, I'll do it. Maybe I won't have to do it," Mr Trump told Fox News.