The US and India have agreed to enter into negotiations for a Free Trade Agreement (FTA), Commerce and Industry Minister Piyush Goyal said on Tuesday during US President Donald Trump’s visit.
The statement follows Prime Minister Narendra Modi’s remarks earlier in the day that Commerce ministers of both countries have had “constructive interactions” on trade.
Modi had said that Trump himself had “agreed to give a legal shape to the understanding” between their ministers “so far.”
Goyal said, “We will hopefully close the first end of the limited engagement that we have already discussed and nearly finalised, Ambassador Lighthizer (United States Trade Representative Robert Lighthizer) and I. We will get into legal vetting and close that quickly. I am delighted that both leaders have decided to formally engage to move towards a Free Trade Agreement between these two big economies.”
Goyal was speaking at the ‘India-US Business Story: Opportunity, Innovation, Entrepreneurship’, organised by the Confederation of Indian Industry (CII) in cooperation with the Department for Promotion of Industry and Internal Trade, Government of India, the Ananta Centre, US-India Business Council, and Indiaspora in New Delhi on Tuesday.
According to Goyal, the FTA negotiations would be fast-tracked and he expects a much larger trade deal quickly. The minister said he has finished mine months in his current position, and a lot of progress has been made.
Goyal had, towards the end of last year, said that the two countries were close to finalising the first set of agreements.
While it is unclear what the limited engagement would entail, discussions had been on for India and the US to work out various outstanding issues between the two countries.
India had wanted a reinstatement of its duty-free benefits under the Generalised System of Preferences (GSP) – the US’s preferential trade system for developing countries – and the Trump administration had demanded various concessions to presumably set right what it saw as “unfair” trade practices by India. This includes bringing down tariffs on products in various sectors and allowing access for sectors such as agriculture and dairy.
Tariff rates on products such as Harley Davidson motorcycle have been mentioned by the US President on several occasions.
“India has one of the highest tariff rates in the world, which can be lowered. Regulatory certainty and standards are essential to global value chains and the US is committed to working with Indian partners to ensure these goals are met,” said Michael J Walsh, Chief of Staff, US Commerce Department.
Price control of medical devices such as stents and knee implants had also been a sticking point for the two countries.
The US is India’s largest trading partners, while India is its eighth largest trading partner.
On Tuesday, Goyal released a CII report titled “$5 billion roadmap”, which lists out interventions in 13 specific areas which, if resolved, would provide a “significant” thrust to trade between the two countries by turning challenges into opportunities. This includes interventions ranging from reinstating India’s GSP, bringing down import duties on high-end motorcycles, arriving at a consensus on a pricing mechanism for medical devices, modifications in India’s e-commerce policy, and removing high tariffs on steel and aluminum imports by the US.
According to Goyal, the sectors highlighted in the report were along the lines of discussions being held between the two countries.
The two governments have signed agreements on defence and energy.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines