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Trump and Modi may announce a limited package of trade-related agreements at Houston event
India and the U.S. are expected to announce the resolution of some of their trade-related differences on medical equipment caps, ICT (information and communication technology) tariffs and market access for agricultural produce. They are in discussions on restoring India’s GSP (Generalised System of Preferences) status and a future free trade agreement (FTA).
Despite the positive momentum, sources said no “comprehensive trade deal” was expected during Prime Minister Narendra Modi’s visit from Sunday and only a limited package of announcements were likely.
Sources aware of the negotiations said that on Wednesday, Indian officials handed over their version of an agreement and it was being vetted by United States Trade Representative (USTR) Robert Lighthizer. They hoped that Mr. Modi and President Donald Trump would make an announcement of a “mini-deal’ after their bilateral meeting in New York next week. The sources would not confirm, but did not rule out, the possibility that the leaders would reference the “mini-deal” during their joint public appearance at the “Howdy, Modi!” event in Houston on Sunday, if finalised then.
The draft agreement addresses some of the U.S. concerns on ICT tariffs and data localisation rules, price caps or trade margin rationalisation on medical equipment such as knee implants, and agricultural market access for select produce. In return, the U.S. is expected to roll back some of the tariffs that it had imposed on India in 2018, when it began its GSP review.
However, the sources cautioned that India is still holding back on lifting the price caps on coronary stents, which were announced by the Modi government in 2017 as a move to make healthcare affordable, and shying away from major ICT concessions owing to worries over opening the market for Chinese products. According to the sources, the USTR and Commerce Ministry officials have been discussing how to restore India’s GSP status in “some form or entirely”. Despite the government announcing that it was not deeply affected by the U.S. decision to review and then revoke the GSP, the latest export figures have shown a slump, indicating that Indian exporters have lost out on contracts due to the decision. Several U.S. companies doing business in India and at least 44 lawmakers have made a case for India with Mr. Lighthizer on the GSP issue as well. Industry insiders said any trade agreement at this point will be welcomed in both Washington and New Delhi. “For the Trump administration, which has not made much headway in its other trade tussles, including with China, the deal with India is a much needed break. For the Modi government, which has faced so much bad economic news, this will be a boost that will hopefully reopen channels of investment,” a business representative closely involved in the talks, who preferred not to be named, told The Hindu .
