India and the US have agreed to work on targetted tariff reduction for items such as peanut butter, textiles, chemicals and steel, to give more market access to businesses from both sides in the areas of their interest, a government source said.

US Trade Representative Katherine Tai and Commerce and Industry Minister Piyush Goyal, who headed the Trade Policy Forum (TPF) meet in New Delhi on Tuesday, also agreed to facilitate market access for mangoes and pomegranates from India and cherries, and alfalfa hay for animal feed from the US.

The two Ministers discussed the possibility of restoration of Generalised System of Preferences (GSP) benefits for Indian exporters, though it is hinged on approval from the US Congress, according to a joint statement issued after the meeting. The GSP programme for India was withdrawn by the Trump regime and it lapsed in 2018.

Tai and Deputy Ambassador Sarah Bianchi are in New Delhi on a two-day official visit for bilateral talks with Goyal and participate in the TPF, which last met in 2017.

The US is amongst India’s top trading partners, with exports to the country in 2020-21 valued at $51.62 billion and imports at $28.88 billion, resulting in a trade deficit of about $23 billion for the US.

TPF Working Groups

The two agreed that the TPF Working Groups on agriculture, non-agriculture goods, services, investment, and intellectual property should be re-activated in order to address issues of mutual concern on an ongoing basis, the statement added.

“The US and India decided to continue their engagement on visa issues, and their shared resolve to facilitate the movement of professionals, skilled workers, experts, and scientific personnel. The Ministers acknowledged the ongoing discussions on a Social Security Totalisation Agreement (exempting short-term foreign workers from contributing to social security) and welcomed further engagement on pursuing such an agreement,” the joint statement said.

Targetted tariff reductions

Elaborating on the decision to work on targetted tariff reductions on goods, that is mentioned without details in the statement, the government source tracking the meeting stated that both sides showed keenness to reduce tariffs on items, mutually agreed upon, to give greater market access to businesses from the other country.

“India’s list of items where it wants the US to reduce tariffs includes products such as textiles, peanut butter and steel while the US wants India to reduce duties on items like walnuts, bourbon, steel and basic chemicals. The list will be discussed in details later,” the official said.

The two Ministers agreed to resolve market access for grapes, water buffalo meat, and wild-caught shrimp from India and pork & pork products and distillers’ dried grains with solubles from the US – issues awaiting resolution for a long time.

India highlighted the importance of co-operation in the health sector and expressed interest in partnering with the US and allies in developing a secure pharmaceutical manufacturing base for augmenting global supply chains.

The Ministers agreed to further engage to find mutually agreed solutions on outstanding WTO disputes between the two countries, the statement said.

comment COMMENT NOW