US Trade Representative Katherine Tai is expected to thrash out pending issues such as penal tariffs on steel, market access for medical equipment, dairy, digital tax and non-tariff barriers while setting the agenda for the growth of India-US trade and investment with her counterpart Piyush Goyal, during her two-day visit to India starting Monday.

Goyal and Tai, who will participate in the India-US Trade Policy Forum set to be revived after a hiatus of four years, are also likely to discuss the forthcoming WTO Ministerial Conference (MC12) meet where India and the US hold differing views on issues such as carve-outs for developing nations in fisheries subsidies and public stockholding.

“This will be an important event as the new USTR will visit India and have an in-person meeting with Goyal for the first time. There are a number of issues flowing from actions of the Trump regime, such as US duties on Indian steel and withdrawal of GSP benefits for Indian exporters, and it will give Indian officials a chance to understand how the Biden administration wants to tackle these,” an official tracking the matter told BusinessLine .

Digital equalisation levy

The USTR team, on the other hand, will be keen to pursue issues such as India’s plans of revoking the 2 per cent digital equalisation levy on global online players such as Facebook and Google, greater market access for medical equipment and dairy products, India’s proposed personal data protection laws and further bridging of the US’ trade deficit with India.

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

The Trump government had imposed a 25 per cent tariff on steel imports and 10 per cent on aluminium from several countries including India, China, Japan, the EU and South Korea in 2018 under Section 232 of the US Trade Expansion Act.

Also read: USTR Tai, Commerce Minister Goyal to take comprehensive look at bilateral trade relationship

In response, India imposed retaliatory tariffs on 28 items imported from the US which included apples, walnuts, certain steel items and chemicals.

The USTR recently decided to withdraw the penal duties on steel imports from the EU while countries such as the UK and South Korea are in a dialogue with the US over the same issue.

“India would readily withdraw the retaliatory duties if the duties on steel and aluminium are withdrawn. However, if the US wants to extract more concessions, the resolution could get difficult,” the official said.

Diverse issues

The Biden administration has not shown much enthusiasm yet in pushing the previous regime’s unfinished agenda of a free trade agreement with India, but Tai is expected to continue pressing for more market access in medical equipment and dairy. She is also likely to stress the need to share data, push e-commerce and strengthen IPR norms.

Although India has said that it would revoke digital taxes imposed on international online companies after the global tax reform agreement, to counter tax evasion by large digital companies is in place, Tai and her team may want to underscore the importance of taking action fast.

Timing her visit just before the WTO MC12 beginning on November 30 in Geneva, Tai is expected to discuss crucial areas where India and the US are in disagreement including India’s stress on special and differential treatment in agriculture talks and special carve-outs in the area of fisheries subsidies.