India's ties with US hit by trade war, Iran sanctions

US Ambassador to the UN Nikki Haley visiting the Gauri Shankar Hindu temple with US Ambassador to India Kenneth Juster (far left) in New Delhi on June 28. She was in India last week to deliver a message to New Delhi to stop oil imports and "rethink"
US Ambassador to the UN Nikki Haley visiting the Gauri Shankar Hindu temple with US Ambassador to India Kenneth Juster (far left) in New Delhi on June 28. She was in India last week to deliver a message to New Delhi to stop oil imports and "rethink" ties with Iran.PHOTO: AGENCE FRANCE-PRESSE

Postponement of key talks also adds to uncertainty in New Delhi

Once the toast of both capitals, ties between New Delhi and Washington seem less rosy of late.

India recently introduced retaliatory tariffs on 29 American products including almonds and apples, in response to United States President Donald Trump's decision to impose higher tariffs on steel and aluminium, triggering a trade war with China that also impacted India.

Although the US was seen to be targeting China, the largest producer of steel and aluminium, Washington announced a list of other countries that will face higher tariffs on their imports to the US. India said it was disappointed to be included in the list, though it is not a major exporter of these items to the US.

Apart from trade, differences have also emerged between the US and India over Iran.

US Ambassador to the United Nations Nikki Haley was in India last week to deliver a message to New Delhi to stop oil imports and "rethink" ties with Iran.

The US has opted out of a nuclear deal with Iran, reimposing sanctions on Teheran and giving companies until Nov 4 to complete their contracts or face penalties.

India, which has longstanding ties with Teheran, is a major importer of Iranian oil and the government is now scrambling to prevent a sudden halt to such imports.

Similarly, US sanctions against Russia have also been a challenge for India, which has close defence ties with Moscow.

New Delhi has announced its intention to go ahead with plans to acquire Russian weapons, with talks in the advanced stages for five S-400 Triumf air defence missile systems.

India-US ties have been growing steadily over the past couple of years, driven largely by mutual concerns about the rise of China. Improving bilateral relations spurred greater military engagement and a promise to work closely in the Indo-Pacific region.

Yet, recent moves have caused uncertainty in New Delhi.

"I think ties are relatively stable but they are going through turbulence because of the Iran factor and tariffs. Trump is very unpredictable and India has to navigate the relationship," said Professor Mohammed Badrul Alam of Jamia Millia Islamia University.

Last week, high-level strategic talks, known as the "two-plus-two" - between US Secretary of State Mike Pompeo and Defence Secretary James Mattis, and Indian External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman - were postponed at the last minute by Washington.

It later transpired that Mr Pompeo was planning a trip to North Korea.

But the fact that the strategic talks have been postponed twice has sent the message to some here that India may not be a priority for Mr Trump.

An official, who was not authorised to speak on the record, acknowledged that "there are differences in priorities at this point".

Professor Rajesh Rajagopalan of Jawaharlal Nehru University believed it would take some time for ties to improve substantially.

"I do think there is a problem obviously with Trump's focus on India, but the administration is trying to maintain that focus. I think both sides recognise the importance of relations. The US Ambassador to the UN was here recently. Mr Pompeo did call the External Affairs Minister to apologise," said Prof Rajagopalan.

"Once someone else takes over the presidency, it will once again grow stronger," he added.

A version of this article appeared in the print edition of The Straits Times on July 06, 2018, with the headline 'India's ties with US hit by trade war, Iran sanctions'. Print Edition | Subscribe