NEW DELHI: India and the US have thrashed out the contours of a trade pact to be signed during the proposed visit of US President Donald Trump next month, which will see India agreeing to cut duties on more than 40 US product categories ranging from apples, almonds, up-end mobiles, smartwatches and electronic gadgets, in return for the US allowing Indian manufacturers duty-free trade facilities withdrawn last year.
Officials said that for the US President, the India deal will come before its trade deal announced with China on Thursday. “In some ways, though the scope of the China deal is larger, ours will be better,” said a commerce ministry official.
While going ahead with the deal, India will maintain that while it is open to import of US dairy products, but will stipulate that they have to conform to restrictions over them not being fed animal food matter.
Apparently, animal feed used in the US dairy industry has high-protein blood meal from cattle and bovines. India has pointed out that cultural and religious sensitivities will preclude imports from dairy animals fed with such meals. India’s dairy and poultry industry had lobbied hard against opening up these sectors to unrestricted imports.
Similarly, officials said that while duty on US-manufactured medical devices could be brought down as part of the “peace formula”, India was sticking to its stand that given the huge numbers of poor patients in India, price caps would continue. The US had termed India’s price caps on heart stents and other medical devices to be “discriminatory trade practices”.
Since a bilateral investment treaty between India and US has as yet not been finalised, something which the US wanted, India will also come up with a quick dispute resolution system that would safeguard foreign investment. India had allowed most bilateral investment treaties to lapse and then demanded new clauses that allow arbitration in third countries to be resorted to only after exhausting all legal remedies within India. This was opposed by the US and others pointing out that Indian judicial process was long-winding.
Just the beginning
Commerce ministry officials said that in time, India will work for a comprehensive economic agreement with the US, but that will take a lot of negotiations. The Indo-US trade deal fleshed out right now can be called the first phase of it, they said.