India has an opportunity to take advantage of the trade tension between the US and China, US Secretary of Commerce Wilbur Ross said on Thursday at a World Economic Forum (WEF) event, even as the two sides are looking to sign a deal “quickly”.
The US will highlight how India can step into the breach in Beijing’s exports to Washington, Ross said at the session “Trading Against the Tide”, attended by Commerce and Industry Minister Piyush Goyal.
“India has a wonderful opportunity to take advantage of trade dissension elsewhere. In our one-on-one meeting with Goyal, we prepared a chart about the areas where China is a big exporter to us compared to what India is exporting to us, the possible solutions, and how we change that mixture,” said Ross at the India Economic Summit, organised by the WEF and the Confederation of Indian Industry (CII).
In an interview to Reuters on the sidelines of the event earlier, Ross said the US was looking to level the playing field. “The US is the least protectionist country of the major powers. India is, if not the most protectionist, certainly one of the most protectionist.”
While Ross dismissed expectations of a limited trade deal between India and the US during Prime minister Narendra Modi’s US visit last week as speculation, he said an agreement could be signed “pretty quickly”.
“Neither government said that there would be a trade deal in five minutes.I think that was just speculation. We do think there is no structural reason why there can’t be one pretty quickly,” he said.
“Now that the election has come and gone and Modi has a very clear and strong position in parliament it should be a lot easier to take decisive action,” said Ross.
The US wants greater market access for its farm and manufacturing products, dairy items, and medical devices, and cuts on import duties on some ICT products.
He said the US was focused on narrowing the trade deficit with India arising on account of protectionist and artificial barriers. He added the requests for duty reduction on motorcycles and removing price controls on medical equipment were on account of dealing with unfair trade practices. “These will not just help the US vis-a-vis India, but rather help India itself,” he said.
India-US trade relations were strained in June, when Washington withdrew the Generalized System of Preferences (GSP), giving benefits to Indian exporters worth $5.6 billion, and New Delhi responded with retaliatory tariffs on 29 products imported from the US.
In 2018-19, India’s exports to the US stood at $52.4 billion, while imports were $35.5 billion. The trade deficit dipped from $21.3 billion in 2017-18 to $16.9 billion in 2018-19.
Ross said it was important to conclude trade deals quickly for them to remain relevant, as was the case with the US deals involving Canada and Mexico, which concluded in 15 months, and the ones with Korea and Japan, which took a few months.
“If trade deals take 8-10 years to conclude, the issues don’t remain the same they were at the time of the beginning of the negotiations,” he said.
Goyal said: “It is a more of a question of scheduling time and scheduling calls and meetings that will determine how long that will take. But I don’t see any big issue that is holding it back for any reason.”
He added the two countries were discussing breaking the $500-billion barrier in terms of their mutual trade. “The way our trade is progressing, I don’t see any reason why we can’t do that (the $500-billion trade target) in the years to come,” Goyal said.
On the issue of India buying the S-400 air defence system from Russia and the US threatening to impose sanctions, Ross said the issue had more to do with the compatibility between Russian and US equipment.
“That’s a complicated issue but it needs to be sorted out … both from the American point of view and the Indian point of view, there needs to be some rational approach to it,” he said.