It was widely anticipated that New Delhi and Washington would finalise a bilateral trade package in New York this week, but both sides on Tuesday failed to agree on tariff cap removals and measures to bolster market access.
This led to negotiations falling through despite India’s Commerce Minister Piyush Goyal and US Trade Representative Robert Lighthizer meeting on the sidelines of the 74th session of the UN General Assembly in New York.
“Frankly it’s not a good sign that a modest deal could not get done because there are bigger issues down the road,” Indian daily The Hindu quoted Atlantic Council Senior Fellow Mark Linscott as saying.
If India and the US have to realise their full bilateral trade potential, both would “need to start putting points on the board,” he added.
Linscott, a former USTR negotiator, hoped both sides would continue to remain engaged and not allow the momentum to dissipate.
“It would not be entirely correct to say that talks between India and the United States have fallen through or collapsed. Both countries have said there has been a narrowing down of trade differences,” Federation of Indian Export Organisations official Nitesh Mishra told Sputnik.
“It would be prudent to give a conclusive assessment at a later stage when Washington and Delhi formally announce that an agreement has been reached, he added.
There were at least three sticking points responsible for the talks collapsing, sources told The Hindu.
These included the US wanting India to withdraw a 20 percent tariff levied on information and communications technology (ICT) products; and Washington wanting greater market access for American medical devices like stents and knee implants and dairy products.
The Indian side, according to the sources, felt the withdrawal of tariffs on ICT items could result in Indian markets being flooded by cheap Chinese technology.
On removing price caps on American dairy products and other agricultural items, New Delhi reasoned Indian items could face unfair competition.
India used the trade talks to ask Washington to restore preferential access to US markets under the Generalised System of Preferences (GSP) program that was withdrawn in June after more than 30 years. It also sought greater access to US agricultural markets.
Indian Foreign Secretary Vijay Gokhale said on Tuesday that both sides had made “significant progress” on trade-related issues.
Both Prime Minister Narendra Modi and President Donald Trump remain optimistic about reaching some kind of a trade agreement in the near future, he said, but did not provide a timeframe for the conclusion of such an agreement.
According to The Hindu, the other issues discussed included digital trade and the removal of India from the US “Priority Watch List” of countries that pose a challenge to American intellectual property rights.