India and US seek to address trade issues, including tariff

India and the United States are seeking to address and resolve various trade issues, including tariff slapped by the Trump administration on steel and aluminium imports and the price-cap imposed by New Delhi on medical devices, that have piled up between the two countries over time.

Commerce minister Suresh Prabhu set the process rolling with a three-day tour of the US concluding Tuesday during which he met US commerce secretary Wilbur Ross, US trade representative Robert Lighthizer, US agriculture secretary Sonny Perdue, senators and industry representatives.

“All the issues are being discussed together and … There is a general agreement that we will (deal) with all these issues and try to move on,” the minister said to reporters on Tuesday.

He was replying to questions whether his discussions with US officials included issues of steel and aluminium tariff and the Generalized System of Preferences, a US trade-promotion scheme of which India is a major beneficiary.

The goal is to put these issues together in a “package” for discussion and resolution and not deal with them in a piecemeal one issue after another and one at a time, an Indian official said on the background to explain the move.

A delegation of Indian officials will arrive shortly to build on the minister’s meetings, which Indian officials described as “very positive”.

“It was agreed that Indian and US officials would meet at a senior level at an early date to discuss various issues of interest to both sides and carry forward the discussions in a positive, constructive and result-oriented manner,” the Indian embassy said in a statement.

The Indian team was particularly pleased with meetings with Ross and Lighthizer, the two top officials of the Trump administration who are entrusted with the execution of US president Donald Trump’s trade agenda, which has upset long-time allies and rivals alike.

India is among countries impacted by the US tariffs of 25% and 10% on steel and aluminium imports, and after failing to obtain a waiver from the Trump administration, it has gone to the World Trade Organization (WTO) seeking consultations, the mandatory first step towards arbitration, and compensation for lost revenues.

India is especially concerned about pressures from the administration to remove, what the US and its industry claim are, trade-barriers on the importation of certain dairy products and price-cap on medical devices in return for continuing to extend preferential treatment to India under trade scheme Generalized System of Preferences (GSP).

India is the top beneficiary of this scheme under which some imports from selected developing countries are allowed to enter the US at zero duty. In 2017, India exported $5.6 billion worth of goods to the US under this scheme, which was more than a fifth of the total worth of Indian exports to the US.

India’s eligibility to continue under the scheme is being reviewed, and as a part of that process, the US trade representative’s office has scheduled a public hearing on June 19.

The two countries have also taken each other to WTO on several trade disputes, over market access, state subsidies and tariff. India has also threatened to levy retaliatory measures — against steel and aluminium duties — worth around $165.56 million on a range of American goods.

The Trump administration went to WTO to challenge a number of subsidy programmes run by the Indian government saying they “harm American workers by creating an uneven playing field on which they must compete”.