New Delhi:India and the US have agreed to negotiate a “trade package” at the earliest, with offers of “hard, clear steps” in order to avoid a trade war between the world’s largest democracies, a senior official said.
The decision, which could mark a major breakthrough in their bilateral trade ties, was taken during the two-day visit of trade minister Suresh Prabhu to Washington where he met US trade representative Robert E. Lighthizer, secretary of commerce Wilbur L. Ross and secretary of agriculture Sonny Perdue.
“The officials of both sides will meet and finalize the elements of the package. For example, they may agree to GSP (generalized system of preferences) and we may have to yield on some items in exchange. These are hard, clear steps,” the senior official, from the commerce ministry, said on condition of anonymity.
Mint had reported on Monday that India is contemplating a reduction in import duties on Harley-Davidson motorcycles if the US agrees to renew the country’s eligibility for GSP, which allows market access to about 3,500 products from India at zero or low duties.
US President Donald Trump had earlier this month threatened to “stop trading” with India, complaining of tariffs that he said were as high as 100% in some cases.
The time and venue of the meetings are yet to be decided.
The US acknowledged that its exports to India had increased last year and that trade deficit had come down by $1 billion, the official quoted above said.
“Our private sector is buying aircraft from the US in huge numbers. In energy, we have signed a long-term agreement. We have opened a door for substantial purchases from the US. None of their deficit partner countries have taken any concrete step like us,” the official said.
Officials of both sides 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 commerce ministry official said on Wednesday.
Biswajit Dhar, professor of economics at the Jawaharlal Nehru University, said India has to be careful as the proposed package may not be limited to goods. “The US seek more market access in agriculture. But more importantly, like they have done with China, they may pressurize India to liberalize its intellectual property regime,” he said.