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Amid trade war, India offers to buy 1,000 planes, more oil from US

Despite the trade war with the US taking all the initiatives in the interest of ‘fair trade’ and to protect America from being used as a ‘piggy bank’ India responds fairly in offering to order nearly 1,000 civilian aircraft in the next 7-8 years besides stepping up oil and gas purchase from the world’s largest trader.

This was conveyed by commerce minister Suresh Prabhu to his US counterpart during their talks last week.

In the discussions with assistant US trade representative Mark Linscott commerce ministry officials while trying to find solutions to problems on the trade front will also try to convince the US that its reciprocal tariffs are part of a WTO-sanctioned right after the US took the first step with steel and aluminium duties.

 

India is keen to see some resolution before the 2+2 talks between foreign minister Sushma Swaraj and defence minister Nirmala Sitharaman and their US counterparts - secretary of state Mike Pompeo and defence secretary James Mattis, respectively - in Washington on July 6.

India has calculated that it will be paying about $5 billion a year for aircraft and about $4 billion for purchase of oil and gas from the US. This is apart from defence purchases where India is now looking at buying 12 more naval surveillance aircraft P8i. India is now the largest owner of these aircraft outside the US.

India and the US are working on the next foundational agreement - the communications compatibility and security agreement - which may be inked in the coming months. This comes after the logistics exchange memorandum of agreement was operationalised last year, leaving only the basic exchange and cooperation agreement to be signed between the two countries.

Ms Nirmala Sitharaman will also make a visit to the US's recently renamed Indo-Pacific Command in Hawaii. While the defence and security relationships have improved enormously, some gaps still remain. According to Indian officials, these could get wider if the US were to slap CAATSA (Countering America's Adversaries through Sanctions Act) sanctions on India for buying defence equipment from Russia. That is likely to dominate discussions during the coming dialogue.

 

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