The government on Friday denied reports that it had offered to open up the poultry and dairy markets to American companies as part of ongoing negotiations on a limited trade deal with the United States.
International media reports on Thursday suggested that India had finally allowed market access to chicken legs from the US, as well as American turkey and other agricultural produce such as blueberries and cherries, in the run up to US President Donald Trump's visit to India later this month. However, Indian officials rebuffed the claims.
“Chicken legs have been prime cause of dispute between both nations for nearly a decade. But our current regime of importing chicken legs is perfectly compliant with World Trade Organization (WTO) rules and market access is already allowed,” a senior official said. He added no talks have taken place on dairy either.
Having lost a case filed by the US at the WTO in 2015, New Delhi secured the establishment of a compliance panel in 2017. However, it conceded access to US poultry in 2018, when the first consignments came in.
India is the fourth largest chicken producer behind the United States, Russia and China and the third-largest egg producer. According to the Agricultural and Processed Food Products Export Development Authority, India exported 540,000 metric tonnes of poultry products worth $98.5 million during 2018-19.
Despite having the highest consumption rates of chicken products, American companies are focused on finding export markets for chicken legs, since the particular item is not favored by US consumers.
On the other hand, market access for other products, such as cherries and blueberries, have also not been offered, said a person in the know. “Instead, talks have only revolved around the agri items on which India raised import duties last year,” he said.
This refers to earlier report of India offering to systematically cut duties on high-value US agri imports like almonds, walnuts, apples, and wine, which were among 29 key imports from the US to see up to a 50 per cent duty hike last year.
While the government is under pressure from farm lobbies to restrict market access to these products, it hopes to provide an olive branch to the Americans on the issue. “Discussions on other American demands — lower duties for industrial components, engineering products and information technology goods like smart watches and iPhones — are lengthy and not expected to be completed by the time of Trump’s visit,” an official said.
Higher taxes on agri goods were estimated to rake in $240 million in additional taxes. India has said the higher taxes were in response to the US imposing a 25 per cent additional levy on steel, and 10 per cent on aluminium products from India in May 2018.