USTR Katherine Tai India visit: Trade policy forum, Indo-Pacific on agenda

With the Biden administration now insisting on resolving irritants first, rather than going for a mini deal, the focus on Trade Policy Forum has again emerged.

With US Trade Representative (USTR) Katherine Tai (pictured), along with her deputy Sarah Bianchi, set to reach the national capital on Monday, issues related to market access, including tariffs, are likely to be discussed by reconvening the India-US Trade Policy Forum (TPF).

Established in 2005, the India-US TPF met last in October 2017. It was then replaced by negotiations between the two sides on a trade deal.

With the Biden administration now insisting on resolving irritants first, rather than going for a mini deal, the focus on TPF has again emerged.

There could also be discussions to promote both nations’ shared interests in the Indo-Pacific region, people aware of the matter said.

“Since the US government has made it clear that a (mini) trade deal with India will not be possible, at least for now, another focus area is likely to sort out market access issues and matters on the Indo-Pacific region,” one of the persons, cited above, said.

“A major breakthrough on any trade-related issue between India and the US is difficult (for now) without any investment deal between both the countries. There could also be an expectation to firm up an investment deal (from the US’ side),” the person said.

Tai is set to meet commerce and industry minister Piyush Goyal on Monday. This is also her first visit to India since she assumed office in March.

The US is the biggest destination for India’s exports, though its outbound shipments have been much lower compared to China.

While India exported $29.75 billion to the US, China received only $16.42 billion of exports during the first five months of the current fiscal year from India.

However, when it comes to exports to India, US share was much less at $16.42 billion than China’s at $34.15 billion during this period.

The US was the biggest trading partner of India, slightly bigger than China during April-August 2021-22. But China was the biggest trading partner in certain years, for instance during 2020-21 and 2017-18. The US has been raising the issue of market barriers in India, including high tariffs. New Delhi has also been flagging this matter against Washington.

The US also believes that the Indian regulatory regime is “non-transparent and unpredictable.” According to the US Department of Commerce’s International Trade Agency, US exporters and investors face non-transparent and often unpredictable regulatory and tariff regimes. This is because some goods and services have limited access to the Indian market.