NEW DELHI: India and the US have discussed the possibility of negotiating a free trade agreement (FTA) and have expressed desire to conclude the talks for an initial trade package, the commerce ministry said on Thursday.
The issue was discussed during an informal tele-conversation between commerce and industry minister Piyush Goyal and US secretary of commerce Wilbur Ross on Thursday.
India and the US are negotiating a limited trade deal with a view to iron out differences on trade issues to boost economic ties.
“The principals also conversed on the ongoing India-USA trade discussions and appreciated the substantial progress made by both sides on most of the outstanding issues.
“There was a desire expressed to conclude this initial limited trade package and recognising the complementarities of the India-USA bilateral trade, discussed the possibility of an FTA,” the ministry said in a statement.
India is demanding exemption from high duties imposed by the US on some steel and aluminium products, resumption of export benefits to certain domestic products under the Generalized System of Preferences (GSP), and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.
On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items and medical devices, apart from cut in import duties on some information and communication technology products. The US has also raised concerns over high trade deficit with India.
In the meeting, Goyal also flagged the pending ‘US-India Social Security Totalisation Agreement’.
While appreciating India’s concern, Secretary Ross mentioned that the statutory requirements of the US have to be fulfilled by India in this regard.
He offered to arrange a meeting between US Social Security Administrator and concerned Indian officials to discuss and find a possible solution, the statement said.
India has been demanding early conclusion of the totalisation agreement or Social Security Agreement with the US. It aims to protect interests of professionals of Indian-origin who contribute more than $1 billion each year to the US social security scheme.
Under this pact, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country.
Goyal also expressed concern on the US keeping certain Indian products (24 items) under TVPRA (Trafficking Victims Protection Reauthorization Act) list and designating them as ‘child labour sectors’, thereby denying them the opportunity to participate in supply contracts of US government agencies.
On this, Ross offered to set up a meeting between the labour department officials of both sides, the ministry’s statement said.
Further, Goyal raised the issue of US ban on import of wild catch shrimp from India on the premise that fishing practices followed here were non-compliant with US regulations to protect sea turtles.
“He mentioned the various conservation measures taken by Indian maritime states in protecting the sea turtles. Secretary Ross appreciated India’s concerns and agreed to facilitate a discussion between the officials of the US state department and Office of Marine Conservation with the Indian department of fisheries and ministry of forest and environment, in this regard,” it said.
The US remained India’s top trading partner for the second consecutive fiscal in 2019-20. According to the data of the commerce ministry, in 2019-20, the bilateral trade between the US and India stood at $88.75 billion, as against $87.96 billion in 2018-19.
The US is one of the few countries with which India has a trade surplus. The trade gap between the countries has increased to $17.42 billion in 2019-20 from $16.86 billion in 2018-19, the data showed.
In 2018-19, the US had surpassed China to become India’s top trading partner.