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Nation Current Affairs 15 Feb 2020 Indo-US trade talk e ...

Indo-US trade talk enters key phase

Published Feb 15, 2020, 12:39 am IST
Updated Feb 15, 2020, 12:39 am IST
US offers energy, India to buy chicken, dairy.
US President Donald Trump.
 US President Donald Trump.

Washington/New Delhi: The US is ready to supply oil and gas to energy-hungry India as much as it wants as there is a huge potential for bilateral cooperation in the key sector, a top White House official has said ahead of President Donald Trump’s maiden visit to the country.

Mr Larry Kudlow, economic adviser to Mr Trump, said that talks are going on between India and the US on a trade deal that could be inked during the visit of the president. He made the statement while responding to a question about the progress on a trade deal ahead of the presidential visit.


On Tuesday, Mr Trump said he was looking forward to his first visit to India this month and signalled his willingness to sign a trade agreement with New Delhi “if we can make the right deal”.

Mr Trump will pay a state visit to India on February 24 and 25 at the invitation of Prime Minister Narendra Modi. Responding to another question on the increase in export of energy to India, Kudlow said there is a much greater potential. “Could be, hope so. Let’s remove all the barriers. They (Indians) need energy. We have the energy.


“When we had our bilateral meetings with the Prime Minister Modi, I said, you give me a number (to export energy from the US to India) and I’ll meet it,” Kudlow said. In his State of the Union address last week, US President Trump said: “The US has become the number one producer of oil and natural gas anywhere in the world, by far”.

In the last few years, America's export of energy to India increased from zero to $8 billion last year and this year it is expected to increase to $10 billion.
“Our energy trade tou-ched close to $8 billion last year. Mind you, this was zero, a few years ago,” India’s new ambassador to the US Taranjit Singh San-dhu said in his remarks at a reception hosted in his honour by the US India Business Council.


“In fact in 2013, I testified before the House Energy Committee advocating US energy exports to India. In 2017, our leadership decided to elevate our partnership to a strategic energy partnership,” Mr Sandhu said. According to the US State Department, US energy exports are an important area of growth.     

PM trying to pull all stops for Trump visit
Prime Minister Narendra Modi is trying to pull all the stops for the US president’s Feb. 24-25 visit, aimed at rebuilding bonds between the world’s largest democracies.


In 2019, Trump suspended India’s special trade designation that dated back to 1970s, after Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.

Trump’s trip to India has raised hopes that he would restore some of the country’s U.S. trade preferences, in exchange for tariff reductions and other concessions.

The US is India’s second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.


India has offered to allow imports of U.S. chicken legs, turkey and produce such as blueberries and cherries, Indian government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent . U.S. negotiators want that tariff cut to 10%.

The Modi government is also offering to allow some access to India’s dairy market, but with a 5% tariff and quotas, the sources said. But dairy imports would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.


New Delhi has also offered to lower its 50 per cent tariffs on very large motorcycles made by Harley-Davidson, a tax that was a particular irritant for Trump, who has labelled India the “tariff king.” The change would be largely symbolic because few such motorcycles are sold in India.

Trump will be feted in Modi’s home state of Gujarat, then hold talks in New Delhi and attend a reception that the hosts have promised will be bigger than the one organised for former president Barack Obama in 2015.

But it is far from clear whether India’s offers will be enough to satisfy U.S. Trade Representative Robert Lighthizer, who cancelled plans for a trip to India this week. Instead, he has held telephone talks with Indian Commerce Minister Piyush Goyal.


Location: India, Delhi, New Delhi