Less than two weeks after Prime Minister Narendra Modi and President Donald Trump met on the sidelines of the G20 in Osaka, a team of US government officials are in New Delhi for two days of brainstorming with Indian officials in order to resolve the trade dispute between India and the United States.
The officials are meeting on the directions of PM Modi and President Trump. After the meeting, Trump had said that Indo-US ties had never been better but on Tuesday, the US President said Indian tariffs are no longer acceptable.
Top sources told CNBC-TV18 that tariffs, ecommerce and data localisation issues are the main issues that would be discussed. While collaboration on 5G is not on the agenda but officials do not rule out a discussion on the issue.
Ministry of external affairs (MEA) spokesperson Raveesh Kumar said, “Our approach is to engage constructively and positively. We look forward to resolving issues that came up during discussions between PM Modi and President Trump.”
Kumar emphasised that India would be guided by the bigger picture in Indo-US relationship and the trajectory of relations which remains positive.
When asked about their expectations from the visit the United States Trade Representative (USTR) spokesperson said, “Since India’s election period has now passed, USTR officials are visiting India for relationship-building with Indian government counterparts, including introductory meetings for the new AUSTR for India, Christopher Wilson.
AUSTR Wilson and DAUSTR Brendan Lynch are in New Delhi July 11-12.
Indo-US bilateral trade reached $142 billion in 2018 with a $24.7 billion trade surplus in favour of India. During their meeting, USTR officials Christopher Wilson and Brendan Lynch will seek greater market access for American companies in order to bridge this trade deficit.
Goods that the US would seek greater market access include medical devices, dairy products, information and communication technology and Harley Davidson motorcycles. The US would urge India to ease restrictions on ecommerce and data localisation norms which impact American companies like MasterCard and Walmart.
USTR would also seek a rollback of retaliatory tariffs imposed by India in response to the steel and aluminium tariffs. India imposed retaliatory tariffs on 28 US products to the tune of $200 million after postponing them nine times.
For India, the priority would be to seek exemptions from US import duty of 25 percent and 10 percent on steel and aluminium respectively. Indian officials are likely to demand the reinstatement of Generalized System of Preferences (GSP) benefits which provided duty-free benefits to Indian businessmen to the tune of $6 billion. Energy imports from Iran and defence imports from Russia are also likely to figure in the discussions.
The two-day meeting will set the tone for a meeting between US Trade Representative Robert Lighthizer and union commerce minister Suresh Prabhu. A source privy to the ongoing discussions told CNBC-TV18 that it would be good for India to not look at this as a give and take meeting and India should be ready to grant concessions in the interest of the larger Indo-US strategic relationship.