Despite Commerce Minister Piyush Goyal’s presence in New York to conclude a trade package with US Trade Representative (USTR) Robert Lighthizer, the two sides failed to bridge the gap in their positions.
The announcement of an agreement was expected to coincide with Tuesday’s bilateral between Prime Minister Narendra Modi and President Donald Trump. “We will have a trade deal soon. We will have a bigger trade deal down the road,” Mr. Trump said before the talks held on the sidelines of the UN General Assembly meeting.
While Foreign Secretary Vijay Gokhale did not share details on why a trade package could not be concluded, three sources familiar with the negotiations told that the prospects of an agreement unravelled due to the failure to reach an agreement on Information and communications technology (ICT) products. The US has wanted India to eliminate tariffs (20%) on ICT products, but New Delhi is concerned that this could open up the market to flooding by Chinese technology.
On its part, India wanted the reinstatement of preferential market access to US markets under the Generalized System of Preferences (GSP) program, which was revoked in early June. It had also wanted facilitation of processes in agricultural product markets where it already had access (such as easier certification of food product irradiation facilities) and greater access in some agricultural markets (table grapes and pomegranates for instance).
Although a limited trade package could not be finalised, Mr. Gokhale said the two sides had “narrowed their areas of difference”, and made “significant progress”.
“The two leaders, therefore, felt that they were optimistic in terms of reaching some kind of a trade agreement in the near future. And discussions will continue in this regard,” he said. However, he did not provide a time frame for the conclusion of agreement.
