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India, US agree to address mutual trade concerns

13 July 2019

India has imposed retaliatory tariffs on 28 U.S. products, including almonds and apples, starting 5 June, a year after announcing them to counter the increase in steel and aluminium tariffs by the USA and the withdrawal of duty-free benefits to Indian exporters.

US President Donald Trump has been asking India to reduce customs duties on US products further. "Since India's election period has now passed, USTR officials are visiting India for relationship-building with Indian government counterparts, including introductory meetings for the new AUSTR for India, Christopher Wilson", a USTR spokesperson said.

A delegation led by assistant USA trade representative (AUSTR) for South and Central Asia, Christopher Wilson, will meet Indian officials to try to re-start negotiations on tit-for-tat tariffs that were put on hold because of India's election. Indian officials are likely to demand the reinstatement of Generalized System of Preferences (GSP) benefits which provided duty-free benefits to Indian businessmen to the tune of $6 billion.

In response, an angry New Delhi imposed higher duties on 28 United States products including almonds, apples and walnuts last month.

Numerous toughest questions on agricultural commodities, e-commerce, and steel and aluminum, have been put off until Indian Commerce and Industry Minister Piyush Goyal goes to Washington for talks with United States Trade Representative Robert Lighthizer next month.

US Commerce Secretary Wilbur Ross earlier criticised India's trade policies and tariff rules, saying they posed a big impediment to attracting foreign investment.

Commerce & Industry Minister Piyush Goyal is also scheduled to meet the team from the US Trade Representative's (USTR) office on Friday. This week, Trump tweeted that "high" duties were "not acceptable".

India's trade ministry did not respond to a Reuters email seeking comment.

India on Thursday said that it seeks very constructive and positive engagement with the USA counterparts. "We look forward to resolving issues that came up during discussions between PM Modi and President Trump".

The GSP, implemented since 1974, is the largest and oldest USA trade-preference scheme and it allows duty-free imports for thousands of products from designated beneficiary countries.

In a recent meeting, Foreign Minister Subrahmanyam Jaishankar told trade ministry officials that "Trump is clearly preparing for a larger game, a larger opening", according to one of the officials aware of the discussions.

Mark Linscott, a former USTR official, wrote in India's The Hindu newspaper on Tuesday that trade should be a bigger part of the strategic partnership and that a free trade pact "is the ultimate example of economic integration".

India-US trade was worth $142.1bn in 2018 with the US $24.2bn in deficit.

India, US agree to address mutual trade concerns