US Secretary of State Mike Pompeo will arrive in India late on Tuesday as part of his three-day delegation meet for strengthening bilateral cooperation between the two countries. The talks will cover a range of contentious issues including trade, telecom and defence.
The talks initiated by Pompeo will also serve as a framework for talks between US President Donald Trump and Prime Minister Narendra Modi that will be held later in the week at a G20 meeting in Japan.
"There will be certain issues between us that will be on the table at all points of time," an Indian government official told Reuters. "But it should not detract from the overall direction of the relationship, which is positive," he added.
Despite both the country's protectionist measures, the defence ties remain strong as the US seeks to develop India's strategic capabilities to counter Chinese influence in the region.
The US is also India's top weapons suppliers over the past decade with purchases worth around $15 billion on transport planes, long-range submarine hunters and helicopter gunships.
Both the countries have also pushed for defence manufacturing as part of its national agendas of "Make in India" and "Make America Great Again."
However, recently US warned India against buying the Russin S-400 surface-to-air missile systems as it "risks triggering the CAATSA [Countering America's Adversaries Through Sanctions Act] sanctions." Looking at an "alternative" was advised by a senior official at the US Department of State.
Earlier, this month US had pushed India to consider buying it's Terminal High Altitude Area Defense system (THAAD) and Patriot Advanced Capability (PAC-3) air defence missile system in a bid to break the defence deal between India with Russia.
Despite the threat of US imposing sanctions, the Indian Foreign Ministry has expressed that it had no plans of scrapping the $5.43 billion deal inked with Russia in 2018 for five squadrons of the advanced S-400 Triumph surface-to-air missile systems.
A new industrial security agreement called Industrial Security Annex, that will protect US interests in the transfer of classified defence technology and information will go up before the Indian cabinet for approval in the next few weeks, reported Reuters on Tuesday, June 25.
Trade tensions between the two nations escalated as India decided to impose retaliatory tariffs on 29 listed US goods including almonds and walnuts on June 14. The move was a counter-strike to the US as it scrapped trade privileges under the Generalized System of Preferences (GSP).
Last year, India stated that it intended to impose high import duties on a number of goods after the US refused to exempt India from higher steel and aluminium tariffs.
India had relented before by slashing the customs duty on imported motorcycles like Harley-Davidson to 50 per cent after the US threatened to impose retaliatory taxes in February 2018.
According to the US Trade Representative, India is its ninth-largest good's trading partner with the India-US bilateral trade standing at $142.1 billion last year.
US President Donald Trump has had his eyes fixed on the $21.3 billion (in 2018) US goods trade deficit with India. The matter has been at the forefront since 2017.
India's has decided to remain non-committed on the issue 5G rollouts in the country as the standoff between US and China over the telecommunications and electronics equipment company, Huawei continues.
India will listen to what the US will have to say on the issue and is "no hurry to make the final call."
"During Pompeo's visit, we will be on a listening mode only (on the Huawei issue)" a top official told Livemint. "We are in no hurry to take a final call, especially as many other countries are also taking their time to decide on this matter and we will be watching their stance also," said the official mentioned above," he said.
The government has also formed a panel to examine Huawei's participation in 5G, reported to the news website.
Telecom minister Ravi Shankar Prasad had earlier said that the government will take "a firm view" on Huawei's participation. "There are also security issues...it is not only a matter of technology, with regard to their participation in 5G...Participation of 5G is not conditional upon the trial is started. Whether a particular company is allowed to participate or not is a complex question including security issues."