Despite gaps, U.S. hopeful of trade deal with India ahead of Trump's visit

U.S. President Donald Trump is expected to visit India during the last week of February

February 07, 2020 08:47 am | Updated November 28, 2021 11:52 am IST - Washington DC

Prime Minister Narendra Modi with US President Donald Trump. File photo

Prime Minister Narendra Modi with US President Donald Trump. File photo

Gaps remain between the positions of India and the United States in talks over a trade deal but the U.S. remains “hopeful” a deal can be reached prior to U.S. President Donald Trump’s visit to India in a few weeks, a source close to the trade negotiations told The Hindu .

Mr. Trump is expected to visit India on February 24, 25 . For a President who markets himself as a negotiator and closer of deals, signing a trade deal while in India is likely to be an important aspect of his trip. Nevertheless it is not a given that the deal will be completed before the visit, the source told The Hindu


U.S. Trade Representative, Robert Lighthizer’s reported visit to New Delhi next week to wrap up the deal has not been finalised – a decision on whether or not he will visit has not been made, the source said.

Removing price caps on medical devices

The U.S. side is also “disappointed” about the tariffs announced in the Union Budget , particularly the import cess on medical devices, the source said.

Finance Minister Nirmala Sitharaman had announced a health cess of 5% on medical devices (except those exempt from basic customs duty) to help local manufacturers and finance health infrastructure. Currently duties on medical devices are in the 0-7.5% range. A customs duty increase on a number of agricultural goods including walnuts (kernels) and some dairy products like cheese and butter was also announced.

India and the U.S. have had months of talks over restoring India’s benefits under the U.S.’s preferential trade system, the Generalized System of Preferences (GSP), revoked in June last year . The U.S. has also wanted India to remove price caps on medical devices, and wanted a deal on dairy products and elimination of tariffs on ICT products (not subsequently part of the latest round of trade discussions as per reports)l.

Current trade talks include a discussion on partial relief for the U.S. on medical device price caps in India, partial restoration of GSP for India, and discussions over agricultural products, as per news reports.

The last time negotiators scrambled to reach a deal was on the sidelines of the United Nations General Assembly in September last year when Prime Minister Modi and Mr. Trump had a bilateral meeting . The current trade talks are a consequence of the continuing discussions from September when a deal could not be reached.

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