NEW DELHI: The pull-out by Harley-Davidson may not be the only blow to India’s stuttering trade and investment relationship with the US. Indications are that it may not be able to sew up the early harvest trade deal which both sides wanted before the US Presidential elections.
Top officials said that though India had made a “good offer”, the deal has not been clinched as the Americans have sought more concessions.
India’s offer included allowing high-end US manufacturers, including of medical devices and telecom equipment, to enter the Indian market at lower duty besides allowing select American agricultural products entry.
In return, India had asked the US to lift its ban on allowing a host of Indian products duty free entry under its Generalised System of Preferences regime. But officials said the Americans sought more concessions, especially in agriculture.
This included opening up of the poultry and dairy markets ahead of US Presidential elections and lower duty on parts imported by American firms such as Harley which have set up bases in India.
The Americans have repeatedly pointed out that due to India’s high tariffs even assembled Harley motorcycles are at least one-and-ahalf times costlier than in the US.
Also put on the back-burner is an investment treaty which would have given guarantees to US and Indian investments.
India has been wooing American and other multinational firms exiting China to relocate to India, but except for a few notable exceptions, such as Apple’s vendor Foxconn, few have done so.
“The Americans have also questioned us at WTO earlier this week on our export subsidies. The point they are making is that if you want access to the large American market you need to give tariff concessions to US companies selling products or setting up factories here,” said Prof Biswajit Dhar of JNU, a member of the Board of Trade.
The US had last year withdrawn preferential tariff treatment for many Indian products.