Commerce and industry minister Piyush Goyal is travelling to the US on Monday as India and the US work to resolve their bilateral trade issues. His visit to New York coincides with Prime Minister Narendra Modi’s visit to the US during September 21-27.
Restoration of the Generalised System of Preferences (GSP), duty cuts on Harley Davidson bikes, market access to US agricultural commodities and price controls on medical devices are key areas that the two sides have been trying to resolve first and arrive at a trade deal.
Officials said the American industry is hurting with the withdrawal of preferential benefits to $6.3 billion of Indian exports.
Last week, 44 US lawmakers urged the Trump administration to reinstate India’s designation as a beneficiary developing nation in GSP and suggested an “early harvest” approach that “would ensure that long-sought market access gains for US industries are not held up by negotiations over remaining issues.”
“GSP restoration is a key issue as US firms are hurting,” said an official in the know of details.
While the economic impact of GSP withdrawal on India’s exports is not significant, these issues have long-term strategic implications and should not become deal breakers, as per another official. Preferential tariffs under GSP on Indian exports are 1-6%.
Separately, New Delhi may also work on a separate HS Code so as to facilitate further duty reduction or elimination on Harley Davidson bikes. In February last year, India reduced the duty on completely built units of motorcycles of all engine capacities to 50%. Earlier, the duty on bikes with engine capacity of 800cc or lower attracted 60% duty, while those with capacities of 800cc, or more, attracted 75% tariff.
Goyal’s visit to the US has been long pending and got a push when Modi and Trump met at G-20 Osaka Summit in June and agreed on an early meeting of commerce ministers to sort out trade issues.
The US wants India to do away with price controls of medical devices like stents and knee implants with innovative features and keep them separate from mass products. It has also sought duty cuts on pecan nuts and various berries, from India.
The two sides have been engaged in talks to iron out the differences which began last year when the US levied global additional tariffs of 25% and 10% on the import of steel and aluminium products, respectively. India responded by levying retaliatory tariffs on 28 products originating or exported from the US with effect from June 16 for which Washington dragged it to dispute at WTO.