Divergent positions on data localisation and e-commerce norms, price caps on medical devices, and America’s tariffs on steel and aluminium figured during Monday’s meeting between US Commerce Secretary Wilbur Ross and Commerce and Industry minister Suresh Prabhu.
The hour-long meeting focused on a plethora of US concerns regarding India’s stringent position on data and e-commerce, among other issues.
New Delhi has pushed for domestic legislation on both the issues and said no to global talks at the World Trade Organization on digital trade. But Washington DC has taken a strong stance against India’s decision to force foreign companies to shift their servers to India, saying it lacked the necessary infrastructure, according to sources. However, the talks did not touch upon two issues that New Delhi has been keen to resolve. This includes Washington DC axing India’s duty-free access to the US market through the Generalised System of Preferences (GSP) trade scheme. India is the largest beneficiary nation under the GSP, having exported goods worth $5.6 billion to the US in 2017-18. Last week, India — for an unprecedented seventh time — postponed the proposed higher tariffs on high-value goods from Washington, hoping to get a reversal on the US position. Officials argued the government decided to extend the deadline one last time as it awaits a final confirmation from the US, set to come in the form of a presidential decree.
Similarly, the US sanctions on Iran, that has cut off India’s access to Iranian crude, found no mention in the talks. The waiver given to India to stop shipments from Iran ended on May 1. Washington DC has clarified it won’t discuss the issue bilaterally.
Trade package hopes
Instead, both sides made a decision to discuss issues that have been part of a broad trade package, in the works for the past one year, sources said. Representatives have met as many as five times to hammer out a deal that provides an amicable solution to grouses from both sides.
There were repeated comments by US President Donald Trump calling India a ‘tariff king’, had put the proposal on hold, until now. As part of this, India had earlier hinted it was willing to dismantle its current price cap regime for coronary stents with a trade margin policy. It also suggested it may allow lower duties on import of certain information and communication technologies products such as high-end mobile phone and smart watches from the US.
In return, India on Monday requested waiver from higher tariffs on Indian steel and aluminium exports. Among major trade partners, India had been the only economy to not receive an exemption till now. But later, demands for greater market access for Indian products from sectors like agriculture, automobile, auto components and engineering were incorporated into the dialogue. Total bilateral trade in both goods and services hit $142 billion in 2018, a 12.6 per cent growth from $126 billion in the previous year.
The talks also took into account the recent fight between the trade partners on ground handling operations at airports.
The US has threatened to prohibit Indian carriers from conducting ground handling in that country in retaliation to India not allowing foreign airlines similar operations in India. The US has sought detailed filing of all ground operations from Indian carriers by July 1.
US concerns on intellectual property right violations was also discussed. On Tuesday, Ross will be speaking at the US Trade Winds Indo-Pacific Business Forum and Mission initiative 2019 in Delhi. After an acrimonious end to 2018, marred by repeated disputes on multiple issues, both sides have also committed to discuss pending problems regularly.
Key facts from the meet
- Issues not included in the talks
- Washington DC axing India’s duty-free access to the US market through the Generalised System of Preferences trade scheme
- The US sanctions on Iran, after which India's access to the country’s crude has been cut off
$5.6 billion: Worth of goods exported to the US in 2017-18. India is the largest beneficiary under the GSP
$142 billion: Total bilateral trade in goods and services in 2018, a 12.6% growth from the previous year