India, US to intensify efforts to settle trade differences at meeting next week

With just about three weeks left for India’s retaliatory tariffs against the US to kick in, a team from the Commerce Ministry will go to Washington this weekend for the next round of meeting with senior officials from the US Trade Representative’s office to look for a possible settlement to a looming trade dispute.

The meeting of trade officials, scheduled on July 16-17, will be a follow-up of the one held in New Delhi late last month, and will focus on convincing the US to rollback the penal import duties imposed by it on Indian steel and aluminium and continue the generalised system of preferences (GSP), scheme, a government official told BusinessLine .

“In the meeting with the USTR’s team late last month, Indian officials explained in detail why the penal import duty of 25 per cent imposed on steel and 10 per cent on aluminium from the country was unwarranted. The Indian officials said not only did India export much smaller quantities than other trade partners of the US such as China, Japan and South Korea, the country had also taken steps to reduce the trade imbalance with the US,” the official said.

The USTR officials, which included Assistant USTR Mark Linscott, assured their Indian counterparts that they would pass on India’s side of the story to higher officials in Washington, including USTR Robert Lighthizer. “India will get to know how senior officials at the USTR feel about India’s arguments in favour of a roll-back on penal import duties and it will an important input to the discussions in Washington next week,” the official said.

New Delhi notified retaliatory import duties on 19 items from the US worth about $240 million on June 20 after all its attempts to convince Washington not to penalise its steel and aluminium failed. However, it postponed the date of implementation to August 4 as the USTR team was travelling to New Delhi to hold further talks.

India also wants the USTR to renew the scheme which is a preferential import tax scheme allowing market access at nil or low duties for about 3,500 Indian products, including chemicals and textiles. The USTR is holding an eligibility review for India and is also looking at complaints from its medical equipment and dairy industries which have pleaded that the scheme should be extended only when they gain market access in India.

“India has told the USTR team that the GSP extension should not be linked to market access issues. Officials argued that while price caps on medical equipment were for both domestic products as well as imports, dairy products could be imported only when certified that it was from animals that were given feed free of bovine contents as this was of religious significance to Indians,” the official said.

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