India-US trade deal likely only after American elections

The trade deal would have been an important “deliverable” for the Trump visit scheduled for next week. The discussions have dragged on for ages — the deal should have happened before PM Narendra Modi landed in Houston last year, then it was pushed...

Agencies
India believes the US is testing its anxiety level — how desperately does New Delhi want the deal? Senior government sources said India had clarified its “red lines” to the US.
NEW DELHI: With an India-US trade deal timed out before President Donald Trump’s visit, the Washington has informed New Delhi that it would look to completing negotiations after the US elections in November. That would mean the earliest the talks could resume would be in 2021. This was told to the Indian political leadership by US trade representative Robert Lighthizer in a conversation late last week when he decided to call off his visit to India.

The trade deal would have been an important “deliverable” for the Trump visit scheduled for next week. The discussions have dragged on for ages — the deal should have happened before PM Narendra Modi landed in Houston last year, then it was pushed back to after the UNGA, then it was supposed to happen before the Trump visit. The curious part is that the negotiations are not deadlocked.

India believes the US is testing its anxiety level — how desperately does New Delhi want the deal? Senior government sources said India had clarified its “red lines” to the US. “The ball is in the US court,” they said. India was willing to complete negotiations whenever the US was ready, they said.


That is also the message foreign secretary S Jaishankar gave to the EU on Monday, when he met the leadership in Brussels. India wants to restart BTIA talks with the EU, which were suspended in 2013. But EU officials are yet to get back into negotiation mode with India.

According to senior government sources, the two sides had covered the difficult ground, and need a political-level meeting — between Lighthizer and commerce minister Piyush Goyal and his junior Hardeep Puri — to take final decisions on quantities and tariff quotas. But there is enough unhappiness to go around between the two sides, certainly at the official level. In recent weeks, the Indian negotiations have been led by Goyal and Puri, with assistance from Jaishankar. All three, sources said, have full mandate by Modi to close the deal.

On the other side, the US believes the Indian government, with its tortuous inter-agency processes, had dragged the processes unnecessarily. They have said the Indian side has reopened discussions when it has appeared close to a decision, for instance on DDGS (dry distilled grain soluble) poultry feed where the Indian side introduced new tests, or on dairy imports. On the Indian side, there is frustration that the US introduced new items, like pecan nuts and cranberries, into the negotiations, or even electronic payments (essentially asking for national treatment for international credit card companies, in line with the domestic RuPay system).
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US’s top official for South Asia Alice Wells told reporters in Washington over the weekend, “If a tiny Phase 1 trade deal cannot be done when US President Donald Trump visits India, it would be a big setback.”
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