US Secretary of State John Kerry shakes hands with Prime Minister Narendra Modi as US Secretary of Commerce Penny Pritzker and External Affairs Minister Sushma Swaraj look on in New Delhi yesterday.

Agencies/New Delhi

US Secretary of State John Kerry told Prime Minister Narendra Modi yesterday that India’s refusal to sign a global trade deal sent the wrong signal, and he urged New Delhi to work to resolve the row as soon as possible.

A World Trade Organisation pact to ease worldwide customs rules collapsed late on Thursday over India’s demands for concessions on agricultural stockpiling.

“Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India,” a US State Department official told reporters after Kerry’s meeting with Modi.

“While we understand India’s food security concerns, the trade facilitation agreement is one that will bring tremendous benefit, particularly to the world’s poor. India’s actions therefore are not in keeping with the prime minister’s vision.”

Kerry was in New Delhi as part of an annual strategic dialogue to revitalise ties and lay the ground for a visit by Modi to Washington in December.

The official said the meeting was “strong and positive” despite the breakdown at the trade talks in Geneva.

Several WTO member states voiced frustration after India’s demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as “trade facilitation” in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline.

Kerry held out hope that there was a way forward that both addressed India’s concerns about its food security programme as well as advance global trade liberalisation.

India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules.

India’s new government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set in Bali last year.

Kerry has expressed optimism about expanding co-operation between the world’s two largest democracies during a first visit aimed at reviving a relationship clouded by mistrust.

But a raft of disputes has cast a shadow over hopes for a warmer relationship.

Kerry urged India to work with the US to move the WTO process forward, the official said.

Speaking on condition of anonymity, the official also said Modi told Kerry that while areas of difference would always exist, “what is critical is what we do to enhance and build on our trust.”

Earlier, Kerry said the US wanted to “try to really take the relationship to a new place,” following a series of diplomatic spats with India.

Washington has little relationship with Modi, who was refused a US visa in 2005 over allegations that he turned a blind eye to anti-Muslim riots as the chief minister Gujarat.

The US caught up with other Western nations during the election campaign, sending its ambassador to meet Modi who since taking office has shown no visible signs of holding a grudge over his past treatment.

But US officials, who value frank and free-wheeling relationships with foreign leaders, are unsure what to expect from Modi who is known for his austere, solitary lifestyle and is not believed to be at ease in English.

Modi, who as a young man wandered the Himalayas, is seen as a very different character from his predecessor Manmohan Singh, a bookish Oxford-educated economist with whom President Barack Obama had found a kinship.

The US has sought to put relations with India on firmer ground after the Modi visa row and a crisis in December when US authorities arrested an Indian diplomat for allegedly mistreating her servant, infuriating New Delhi.