US Secretary of Commerce Wilbur Ross has said that with the Narendra Modi government back in power, a US-India bilateral trade deal can happen very quickly as the two countries know each other’s issues well. “Pre-elections there were undoubtedly some constraints on India to deal with some matters. Now that the elections have come and gone, and PM Modi has a clear and strong position in Parliament, it should be a lot easier to take clear decisive action,” Ross said at the India Economic Forum organised by the World Economic Forum in partnership with CII. On the failure of US President Donald Trump and PM Modi to reach an agreement on trade during the Indian PM’s recent visit to the US, Ross said that neither government said there would be a trade deal in five minutes, and the talks of a trade deal being signed then were mere speculation.
Chances of an early conclusion of the India-US trade deal have increased with the two countries reducing their differences and agreeing to allow more goods to be shipped by both countries, besides cutting import duty on contentious items. While an assessment of the gains - in terms of duty benefits as well as trade volumes - is being undertaken, an announcement over the next few weeks looks likely. There have been discussions on the trade package being unveiled during the next meeting between PM Narendra Modi and US President Donald Trump, with the possibility of an interaction in India also being looked at, sources said.
The US has been seeking certain trade concessions from India to bridge the existing trade deficit between the countries. It wants India to take a number of facilitating steps such as remove price caps on medical devices, reduce tariffs on mobiles, motorbikes and some agriculture products, and allow dairy exports. India, on the other hand, wants the US to restore the Generalised System of Preferences (GSP) scheme for Indian exporters, which was withdrawn earlier this year. India also wants the US to roll-back penal import duties imposed on its aluminium and steel, which were imposed last year on security grounds.
Commerce and Industry Minister Piyush Goyal said that relationship between the US and India were better than ever before. “The leaders get along very well personally, and also understand each other. They understand what is good for the people of the country and the world as a whole,” he said. The US was India’s largest export destination accounting for 16 per cent of India’s exports in 2018-19. It was followed by United Arab Emirates (UAE), China and Hong Kong.
India had clearly indicated to the US that it was willing to address several of its concerns, the emphatic mandate to Modi and detailed negotiations between Goyal and Lighthizer over the last three months helped the two countries recognise each other’s concerns and red lines better, sources said. They said both governments are approaching the negotiations as part of their broader strategic partnership rather than through the sole prism of trade deficit. “The US has been very helpful to us on a range of issues, like terrorism, J&K, membership to Nuclear Suppliers Group, and this has inevitably been a factor in our approach,” said a senior source on the condition of anonymity. Despite the package, information technology and telecom goods, e-commerce and data privacy issues as well as some matters pertaining to intellectual property rights will be dealt with separately.