Economy

Modi, Trump discuss trade but no deal in sight yet

Amiti Sen New Delhi | Updated on September 25, 2019 Published on September 25, 2019

US President Donald Trump and Prime Minister Narendra Modi at the United Nations General Assembly, in New York. (file photo)   -  PTI

Trump says he is confident of a trade deal `very soon’

 

 

Prime Minister Narendra Modi and US President Donald Trump reviewed the on-going trade discussions between the two countries in their meeting at the United Nations headquarters in New York on Tuesday, but an agreement remained elusive as differences on major issues could not be fully reconciled.

“We have narrowed the areas of difference (on trade issues). The two leaders, therefore, felt that they were optimistic in terms of us reaching some trade agreement soon. Also, discussions will continue in this regard,” Foreign Secretary Vijay Gokhale said at a press briefing after the bilateral meet between Modi and Trump.

Trump, while addressing the media, also said that India and the US would have a trade deal very soon, but details were not forthcoming.

The immediate measures that the US wants India to take includes doing away with price caps for medical devices including knee caps and stents, lowering import duties on smartphones and some other ICT products, removing restrictions on dairy imports and withdrawing retaliatory tariffs on farm products including apples and almonds.

There are undoubtedly other issues as well that are high on Washington’s list of priorities but which might take longer to resolve. This includes removing mandatory requirements on data localisation, changing its Intellectual Property rules including making it easier for companies to get new patents with slight modifications on their past innovations which had run out of patent protection and getting into an agreement on liberalising e-commerce.

The trade issues are complex as they involve domestic industry and jobs on both sides, the Foreign Secretary said explaining why an agreement could not be reached between the two leaders in New York. “Reconciling the gives and takes requires a certain amount of discussion and a certain amount of balance. We have made significant progress in that regard. Moreover, we are confident that we will make further progress in the future,” he said.

India, which has been taking steps to bring down the trade surplus it enjoys with the US by importing more items such as oil and gas, also has its own set of demands. It wants the benefits of the Generalised System of Preferences (GSP) that were withdrawn from Indian exporters earlier this year to be re-instated. Exports of more than 3,000 items from India that used to get zero-duty benefit in the US, no longer is eligible for the benefit. It also wants the US to withdraw the penal import duties imposed on steel and aluminium imports from India last year. Higher market access for several agricultural products is also on the list of demands.

Indian Commerce & Industry Minister Piyush Goyal, who held several meetings in the Commerce Ministry last week to prepare for a possible deal, met US Trade Representative Robert Lighthizer in the US this week to thrash out a deal. “Indeed at the meeting both USTR and CIM expressed satisfication with the discussion and both of them said that the other was sincere in moving this forward,” Gokhale said.

The Foreign Secretary, however, said that the two sides did not discuss a timeline on trade. “What I can say is that we are optimistic that we will be able to conclude an understanding or an agreement fairly soon,” he said.

Answering a question on what all the trade deal would encompass, Gokhale said that while he could not discuss the details, the deal was expected to be a fair and reasonable one. “We have laid out our requirements in that regard, and so has the US side. It is now a matter of negotiating between the two sides on individual issues. We have to ensure that at the end of the day, our requiremenft of access to the US market...is secure. At the same time we also address some of the US side concerns regarding what they consider as the trade deficit,” Gokhale said.

The US is India’s largest export partner with outbound shipments from India in 2018-19 to the country estimated at $ 52.42 billion. India’s imports from the US in the previous fiscal were valued at $ 35.55 billion.

Published on September 25, 2019
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