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India and the US are set to sign bilateral agreements mostly in the defence and energy sectors on the second day of US President Donald Trump’s India visit but trade, too, may stay in focus despite no deal in the offing.
US Commerce Secretary Wilbur Ross and his Indian counterpart Piyush Goyal are likely to discuss market access issues holding up the Indo-US trade deal and also participate in joint discussions with top businesses from the two countries.
“There will be most certainly some announcements in the area of defence and energy. But trade issues, especially possible areas of cooperation and growth, will remain the focus area for the two countries,” a government official told BusinessLine .
Increase in import duties
The US has been demanding greater market access in sectors such as medical equipment, dairy, farm products, IT, motorbikes and telecom which India, so far, has found too ambitious to meet.
Washington also has issues with India’s decision to increase import duties on a number of products ranging from consumer electronics and IT to toys and furniture in the Budget 2020-21.
“While the US will stress on the need for India to lower its import duties and other restrictions, New Delhi could make a case for restoration of Generalised System of Preferences benefits that allowed duty-free access to certain products from India. New Delhi has been arguing that the scheme benefitted not just Indian exporters but also US companies that could get their inputs from India at more competitive prices,” said the official.
In a business session to be jointly organised by the US Indian Business Council and industry body CII on Tuesday, the two sides will discuss the potential of ‘assemble in India’ that could potentially increase India’s export market by 3.5 per cent by 2025 and create 40 million jobs. Some pending deals in the defence sector, including India’s purchase of military helicopters manufactured by the American Lockheed Martin, may be announced during the visit. The US has also approved the sale of an Integrated Air Defence Weapon System to India.
On the nuclear energy front, US energy firm Westinghouse is expected to sign a new agreement with state-run Nuclear Power Corporation of India for the supply of six nuclear reactors.
Bilateral discussions on long-term Liquefied Natural Gas (LNG) deals is also likely to take place with India all set to increase purchase of oil and gas from the US to further reduce the trade surplus which is in India’s favour.
Minister of Petroleum and Natural Gas, Dharmendra Pradhan, and US Energy Secretary, Dan Brouillette, are scheduled to participate in a discussion on US-India Strategic Energy Partnership focussing on strengthening energy cooperation. Top energy companies including Meg Gentle, CEO, Tellurian, will participate in the talks.
The Trump regime has been complaining about India’s large trade surplus with India, but New Delhi has made efforts to increase imports from the US and brought it down from $21.3 billion in 2017-18 to $16.9 billion in 2018-19 by sourcing oil and gas from the country.
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