NEW DELHI: Top commerce ministry officials on Wednesday said that a preliminary trade deal has been “almost” hammered out between the US and Indian sides. This will involve a trade-off between the US restoring GSP (Generalised System of Preferences) benefits for Indian exports and India opening up to imports from the US including medical devices and agricultural goods, as well as reduction of tariff on high-value information technology imports.
In the peace deal that is being worked out for the weekend meeting slated between US President Donald Trump and Indian Prime Minister Narendra Modi, some 44 US Congressmen have written to US Trade Representative Robert Lighthizer, urging to restore India’s trade privileges that were withdrawn earlier.
“Should there be a progress in negotiations, we hope you will use the tools provided by the GSP statute as warranted, such as partial reinstatement,” the Congressmen’s letter said. American politicians are interested in the case as the farm lobby, especially California-based farmers, has taken up the issue with them.
India is the largest importer of US almonds and the second-largest importer of US apples.
“A trade deal between the two nations is a big positive. However, any duty cuts on tech items like mobiles that India offers will probably be weighed against the country’s desire to promote ‘Make in India’ initiative, which has seen companies like Foxconn offering to invest large sums in India,” said Swapan Sarkar, president of Indo-American Chamber of Commerce.
“A larger trade deal is possible only when President Trump visits India, maybe this winter. For the time being, it will be a smaller deal, but with high optics for both sides,” said officials.
The US had earlier this year withdrawn the preferential tariff treatment (GSP) to more than 2,000 kinds of products worth some $6 billion, which India has been exporting to America. The US complained of unfair trade practices by India including higher duties, among a host of other issues.