New Delhi: India and the US will soon announce a “limited” trade package that will ease the entry of American agricultural goods, information and communications technology (ICT) products and medical devices into the Indian markets, ThePrint has learnt.
The trade package will be announced during Prime Minister Narendra Modi’s week-long visit to the US, which begins from 22 September. Modi and US President Donald Trump are expected to jointly announce the package, according to sources.
The final contours of the package were finalised during a telephonic conversation between Union Commerce and Industry Minister Piyush Goyal and US Trade Representative Robert Lighthizer Friday, the sources said.
What the package entails
Under this package, India will make it easier for America to export to India its agricultural produce, medical devices and ICT products by lowering tariffs, a source said. These three segments continue to disrupt the trade relationship between the countries.
“There’s a basket of issues that have been under discussion for some time. That includes some of the agriculture market access, certainly resolving the medical device price control policy and the impact that has had on important products like knee replacements and coronary stents,” said Nisha Biswal, president of the US-India Business Council (USIBC).
According to Biswal, both sides had been discussing the package for quite some time now to address rising trade concerns. However, the trade irritants could not be resolved earlier because India was facing elections and could not make any “difficult trade concessions”, while the US was also busy with other issues.
Since June, many rounds of meetings and discussions have taken place, with delegations of deputy and assistant USTRs flying in and out of New Delhi.
“It’s a small package. It is not a massive lift. We are not talking about a comprehensive trade agreement. We are talking about resolving a few key issues to which, by and large, the two governments know what the answers are. I am hopeful this happens before PM Modi comes to the US,” Biswal said.
She added that the ICT tariffs, which India imposed in 2014 under the Modi government’s first tenure, “caused a great deal of consternation” for American telecom companies and other tech firms.
Biswal also highlighted how US medical device manufacturers have made proposals to the Modi government, giving alternatives to address India’s concerns about access and affordability and allowing them to bring innovative products into the Indian market.
In 2017, the Modi government had put a price cap on medical devices. As a result, US pharma major Abbott withdrew its latest generation stent from the Indian markets that year.
Trade tensions between both countries peaked in May this year when the Trump administration revoked the trade benefits given to India under the ‘Generalised System of Preferences’ programme. The move directly hit Indian goods exports worth $6 billion that were being shipped under this scheme.
India also retaliated by increasing tariffs on 28 US products in June.
Goyal & Modi’s itinerary
The trade package is expected to be given final shape when Goyal reaches US to meet Lighthizer, something he has been eager to do since July. Sources indicated that Goyal may meet the USTR a week before Modi lands there, or he may accompany the Prime Minister.
Modi will be addressing the Indian community at a mega event titled ‘Howdy, Modi!’ in Houston, Texas, on 22 September. He will then head to New York after his roundtable with top CEOs from America’s energy sector the following day.
The PM will speak at the United Nations General Assembly on 27 September. In the interim, he will hold several high-level meetings, the sources added.