Economy

Concessions for medical devices, farm goods high on US agenda as Goyal meets USTR

Amiti Sen New Delhi | Updated on November 13, 2019 Published on November 13, 2019

India’s interests are defensive, wants restoration of GSP

Concessions for medical devices and agriculture producers is high on the US agenda, as the teams headed by US Trade Representative Robert Lighthizer and Commerce & Industry Minister Piyush Goyal prepare to finalise a mini trade package during their meeting in Washington.

"The fact that India's delegation has a number of representatives from the medical field, including doctors from the All India Institute of Medical Sciences, suggests that some movement is likely in the area of removal of caps on pricing of medical devices," an official told BusinessLine.

The US industry wants price caps on medical devices such as stents to be removed, as it argues that it makes their functioning unviable in the Indian market.

The meeting, scheduled on Tuesday in Washington (late night India time), will also focus on agricultural products, where the US wants India to lower tariffs. These include a number of items such as apples, almonds, walnuts and dairy products, the official added.

The US has been demanding concessions from India to increase its exports to the country, to bring down the existing trade deficit which it runs with the country. Although India has managed to bring about a greater balance in trade by importing oil and gas worth about $4 billion from the US last year, Washington feels it is not enough and more needs to be done. India’s trade deficit with the US declined $1.6 billion, about 7 per cent, in 2018, to $21.3 billion.

Apart from medical devices pricing and lowering of duties on farm exports, Washington also wants India to cut levies on import of smartphones and motorcycles.

Restoration of GSP scheme

New Delhi’s interests, on the other hand, are largely defensive. It wants the US to restore the Generalised System of Preferences for Indian exporters, which was withdrawn earlier this year, in its totality.

Although the GSP scheme, under which imports of more than 3,000 items from India were allowed duty-free into the US, affected exports of about $5.6 billion from the country, the total GSP benefits in terms of actual duty concessions were to the tune of only $190 million, according to the Commerce Ministry’s calculations.

India also wants the US to roll back the unilateral increase in import duties on aluminium and steel from India, implemented last year on security concerns.

Goyal had recently said while the package being worked out at the moment was a ``mere tinkering’’ of rules, there was scope for a full-fledged free trade agreement between the two countries.

Published on November 13, 2019
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