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Little hope of trade breakthrough

Nayanima Basu & Sidhartha  |  New Delhi 

But India and the US will discuss outsourcing, export restrictions and a Totalisation Agreement.

Despite all the talk of economics being the centrepiece of United States President Barack Obama’s visit, a solution to some ticklish trade issues does not appear in sight.

Obama’s position on outsourcing, seen to be driven by domestic political compulsions, is not changing for the moment. In any case, officials conceded, since India was not a signatory to the World Trade Organization’s (WTO) agreement on government procurement, there was little New Delhi could do. In the absence of any legal options, Prime Minister Manmohan Singh can only protest.

“It (the US’ statements) is not the done thing and we are going to flag the issue again. But it is unlikely any solution would emerge during the US President’s visit,” said a senior government official.

Similarly, there is no solution in sight for the long-pending Totalisation Agreement with the US, that Indian information technology companies have been seeking. Officials on the Indian side have also ruled out the possibility of India and the US agreeing to start a dialogue on a bilateral trade agreement or for export of Indian farm products.

India is going to ask for easing rules in trade in high-technology products, a taboo during the days of its nuclear isolation. It is expected that Obama would now permit India to access US dual-use technology, removing some export restrictions.

“I doubt whether this visit would be significant in achieving milestones in the Doha round, though both countries would discuss each other’s positions in the round. There could be some out-of-the-box thinking, though, as far as bilateral trade is concerned, but neither India nor the US are seeking a free trade agreement sort of an arrangement,” said

K T Chacko, director of the Indian Institute of Foreign Trade.

For the time being, the chances of ironing out differences appear remote. It’s a different matter that trade between the two sides has been on an upward path, despite the differences.

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First Published: Mon, November 01 2010. 00:11 IST