Discussions and meetings between Union Commerce Minister Piyush Goel and the United States Trade Representative (USTR) has hinted finalization of a trade package between the two countries. The trade package is expected to be finalized and announced along with the starting of negotiations on the Free Trade Agreement (FTA).
To India’s benefit, larger issues of US’s concern like India’s policies and laws around data mobility and FDI in e-commerce are outside the scope of the current discussions. However, in long term discussions and bi-lateral ties, these are the issues that are required to be sorted out.
The spokesperson from the Ministry of External Affairs Mr. Raveesh Kumar Said that both PM Modi and President Trump understand the importance of resolving the trade issues and are working towards that. The discussions in regards to trade package has wider issues to be covered under its ambit.
Major elements of the discussion would be medical devices — stents and knee implants, Information and Communication Technology (ICT) and dairy products. The U.S has its own concerns in this regard like removal of price caps (‘Trade Margin Rationalization’ or TMR on medical devices) for medical devices, further cuts in tariffs for ICT and greater access for dairy products and some other categories of agricultural goods.
India would look to get partial revival of preferential market access to the U.S. under the Generalized System of Preferences (GSP). The GSP was revoked in June this month. Medical devices and dairy industries have been the key reasons behind the U.S reviewing India’s GSP status.
The reason why India is looking for a partial revival of preferential market access/GSP is that India is not looking to release price caps on medical devices. India has also been cautious about further liberalizing the ICT sector as it fears that markets will be flooded by Chinese goods.
The trade package is likely to open the market for some of the Indian agricultural goods. In areas where there is already market access for India, the U.S. is likely to enhance the facilitation of processes. The presence of PM and the Commerce Minister in the U.S. are enough to provide and evidence for now that the agreement could be signed anytime soon.
It’s now all up to the negotiations and discussions that follow.
