2 Years in the Making
Following lengthy trade talks, India and the US seem to be finalizing a trade deal very soon. The two countries have been talking through its terms for two years. However, they have recently come to look past differences and take things forward.
A virtual meeting was held between India Commerce Minister, Piyush Goyal and US commerce secretary Wilbur Ross last week. Goyal also held discussion with United States Trade Representative Robert Lighthizer.
Similarly, Indian Commerce Minister, Piyush Goyal, at the virtual U.S.-India Business Council’s India Ideas Summit, made similar points. He said the two countries need to push themselves against the pending matters that have built up over the past two years.
Trade Deal Details
India demands a concession in generic drugs that it exports to the US. In return, it promises to open its dairy markets to the US. Furthermore, cutting tariffs on farm goods is also one favour India plans to extend to the US, Cites Three sources to Reuters.
Additionally, the US also seeks compensation in the pricing of pharmaceutical products such as stents and knee implants, and IT products. Moreover, India is also reported to be negotiating a limited trade pact. The pact refers to restoring zero tariffs on a variety of Indian exports to the US. The terms of which falls under its “generalized system of preference”. Moreover, the Trump administration was witnessed to have withdrawn from this pact last year, reporting a lack of reciprocal measure from India’s end.
Mutually beneficial terms
“We believe we should also look at an early harvest in the form of a preferential trade agreement rather than waiting for the gains of a free trade agreement, which can take several years to conclude,” he said.
The Us Is India’s biggest trading partner. According to 2019-2020 financial year, The bilateral trade reaches $88.75 billion in net worth.
Preferential Trade or Free trade agreement
Both parties seek to avoid bottlenecks in the process, since the economic conditions remain volatile.
\”We believe we should also look at an early harvest in the form of a preferential trade agreement rather than waiting for the gains of a free trade agreement, which can take several years to conclude,\” he said.
The Indian commerce minister remarked that New Delhi and Washington should agree on a preferential trade deal including 50 to 100 products in services. However, India aims for a free trade pact in the longer term.
Tariff hikes are also expected to be removed. That surfaced in response to US increased tariffs on steel and aluminium
A possible totalization agreement
The minister brought up a totalization agreement, directed towards improving social security. To this Secretary rose agreed to facilitate given that the statutory requirements are met properly.
He further raised the point of lifting the ban on import of wild catch shrimp from India. Secretary Rose agreed to bring the fisheries department of two states together over the issue.
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