India and US Resumes Trade Talks
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India and US Resumes Trade Talks

By IndraStra Global News Team

India and US Resumes Trade Talks

A delegation led by Assistant United States Trade Representative (AUSTR) Christopher Wilson visited India on July 11-12, 2019 to explore the potential for enhanced bilateral trade and economic engagement with India under the new Government. 

Indian and American officials met in New Delhi for the first time on July 12 (Friday) since the US withdrew duty-free benefits to Indian exporters, while India imposed retaliatory tariffs on imports from the US. The Indian was delegation led by Sanjay Chadha, Additional Secretary, Department of Commerce, which included senior officials from other Government of India Ministries.

According to Indian government press release, "the meeting was cordial and aimed at providing a new impetus to bilateral trade and commercial ties, in line with the mandate given by prime minister Narendra Modi and the US President Donald Trump during their meeting at Osaka, Japan on June 28,  2019." It further added, "Both sides discussed the broad contours of bilateral trade and commercial ties and agreed to continue their discussions for achieving mutually beneficial outcomes aimed at further growing the economic relationships and addressing mutual trade concerns."

AUSTR also called on the Union Minister for Commerce and Industry Piyush Goyal during the visit.

Ahead of the talks on Friday, speaking at the Second Leadership Summit of US India Strategic and Partnership Forum (USISPF) in Washington, Jeffrey D Gerrish, Deputy United States Trade Representative said, "The president and the ambassador Lighthizer have been frustrated with the lack of balance and reciprocity in the trade relationship. I think we are at a pivotal juncture here in our relationship and at a critical intersection between a frustrating last few years that we've had and a possible future relationship that at this point is not really defined and is still being tested."  He further added, "There are a number of important issues that we have between us. We certainly have a number of important issues we were working on as part of the GSP review we had. But we need to move beyond the GSP review at this point and tackle the broader issues that we have between us and take a more comprehensive approach to the trade issues that we have." 

Gerrish also emphasized on the fact that the team of USTR officials led by AUSTR Christopher Wilson is in New Delhi not to negotiate at this point. But, "They're just there to lay out the full amount and full slate of issues that we have to try to see if this new Indian government has the willingness and the wherewithal to address these issues and resolve them." 

Focus Issues

The focus issues for the US for the talks are e-commerce rules and data localization. As of now, India prohibits e-commerce companies with foreign direct investment (FDI) from selling products via firms in which they have an equity interest. It also bars them from making deals with sellers to sell exclusively on their platforms. The policy change of December 2018 had a direct bearing on Amazon and Walmart-owned Flipkart. Also, the USTR has earlier pointed out (via a report) that the data localization requirements in India would serve as significant barriers to digital trade between the two countries and should be removed. The report also said that India’s draft national e-commerce policy, which also advocates putting restrictions on cross-border data flows, is “discriminatory” in nature.

Besides these focus issues, tariffs on a number of products such as smartphones, other IT and telecom items and Harley Davidson motorbikes will also get negotiated.

A limited trade pact being worked out by India-US before the Indian general elections, which included all three issues, got derailed after Washington decided to withdraw a scheme offering duty-free entry to over 3,000 products from India early June as soon as the new government was sworn in. India then imposed retaliatory tariffs on 28 US products with effect from June 16, after delaying them for a year, to punish the US for not acceding to its request for the withdrawal of penal duties on its steel and aluminum levied last year.