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India-US trade deal talks on, poll may put pact down to wire

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Reference:BBC | Updated: 18 February 2020

Negotiations between India and the US for a large trade deal are “progressing well”, but Washington faces some political constraints in offering concessions to New Delhi due to the upcoming presidential election, government officials here told ET.

President Donald Trump is scheduled to visit India on February 24-25. However, the US has yet to announce the dates for the visit of United States Trade Representative (USTR) Robert Lighthizer, who was expected to travel to India to finalise the trade deal.

“An announcement will only be for a complete deal; there is no limitedscope deal. The negotiations are on and progressing well,” said an official aware of the details.
“We will announce the deal if it works out, else we will keep negotiating. Discussions are underway,” the official said, adding that there was no hurry to seal the pact and that it could be done towards the end of the year as well.

Speaking in Washington on Tuesday, Trump said he was willing to sign a trade deal with India “if it is the right one”. “They (Indians) want to do something and we’ll see … if we can make the right deal, (we) will do it," news agency IANS quoted Trump as saying.


His statement came on a day when the US removed India, along with several other countries, from its list of developing countries that are exempt from investigations into whether they harm American industry with unfairly subsidised exports.
The official aware of the details said this development would not have any bearing on India’s chances of getting preferential benefits under the Generalised System of Preference (GSP) restored.

GSP restoration has been India’s key demand as part of the trade deal talks. Under the GSP, the country had exported goods worth $6.3 billion (as per USTR figures) to the US, accounting for around 12.1% of India’s total export to the US. The average duty concession accruing from GSP was almost $240 million in 2018.
New Delhi is keen on a deal that is beneficial to both sides, but Washington faces constraints in meeting India’s demands on market access due to the November elections, people in the know said.

The US had demanded access for its agricultural products including almonds, dairy products and duty cuts on Harley-Davidson motorcycles. It had also sought data-related relaxations, including those in India’s ecommerce policy.

“We should be careful of a lopsided deal and stick to our demands. We should not be in a hurry to conclude the deal. We have issues on the services and WTO front, and all these should be highlighted during Trump’s visit,” said one expert on trade issues.

“We should be careful of a lopsided deal and stick to our demands. We should not be in a hurry to conclude the deal. We have issues on the services and WTO front, and all these should be highlighted during Trump’s visit,” said one expert on trade issues.

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