New Delhi/Washington, Feb 14: India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during US President Donald Trump's first official visit to the country this month, people familiar with the protracted talks say.
India, the world's largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80 million rural households involved in the industry.
But Prime Minister Narendra Modi is trying to pull all the stops for the US President's February 24-25 visit, aimed at rebuilding bonds between the world's largest democracies.
In 2019, President Trump suspended India's special trade designation that dated back to 1970s, after PM Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.
President Trump's trip to India has raised hopes that he would restore some of the country's US trade preferences, in exchange for tariff reductions and other concessions.
The United States 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 US chicken legs, turkey and produce such as blueberries and cherries, government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent. US negotiators want that tariff cut to 10 per cent. The Modi government is also offering to allow some access to India's dairy market, but with a 5 per cent 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 President Trump, who has labelled India the "tariff king." The change would be largely symbolic because few such motorcycles are sold in India.
President Trump will be feted in PM 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 US Trade Representative Robert Lighthizer, who cancelled plans for a trip to India this week. Instead, he has held telephone talks with Commerce Minister Piyush Goyal.
The US dairy industry remained sceptical on Thursday that a viable deal is at hand.
"We're always looking for market access, but in terms of India, as of today I'm not aware of any real progress going on," said Michael Dykes, president of the International Dairy Foods Association and a member of USTR's agricultural trade policy advisory committee.
Mr Dykes said the US dairy industry was looking for access in viable commercial quantities.
A USTR spokesman and India's trade ministry did not respond to requests for comment.
A parliament panel is reviewing a draft data privacy law that imposes stringent controls over cross-border data flows and gives the government powers to seek user data from companies.
It is not clear whether it will be passed, or in what form, but the possibilities have unnerved US companies and could raise compliance requirements for Google, Amazon.com Inc, and Facebook.
The draft law is not part of the trade discussions, Indian officials say, because the issue is too difficult to resolve at the same time.
"The privacy and localization piece will be raised independently and in concert with the trade discussions," said a Washington-based source with knowledge of the US administration's thinking.
President Trump on Tuesday was non-committal about sealing a trade deal before his visit. "If we can make the right deal, we'll do it," he told reporters.
Two US sources said progress had been made on proposed alterations to the medical device price caps. India's new import tariffs on medical devices, walnuts, toys, electronics and other products on February 1 surprised US negotiators, however.
The new tariffs were aimed at China, which also makes medical devices, according to an Indian government source. "We have to protect our market and our companies," the source said.
Comments
An Indian Haj subsidy that did not exist!
Thank you Prime Minister Modi for ending Haj subsidy that never existed.
I completely welcome this move making the announcement, minister Mukhtar Abbas Naqvi said: “We believe in empowerment without appeasement.”Naqvi did not elaborate what he meant by “appeasement” but for decades, Haj subsidy remained a whip in the hands of right-wing parties to attack political rivals. Bharatiya Janata Party to embarrass rivals by accusing them of “appeasing” Muslims by subsiding expenses involved in the pilgrimage to Makkah and Madina. Angered by this attack, several Muslims have been demanding an end to the subsidy.
However, it is important to understand what this subsidy was and whether Muslims actually benefitted from it. In 2016-17, the government budgeted Rs 4.5 billion subsidy for around 100,000 Muslims who performed Haj last year. Each pilgrim paid around Rs 220,000 (amount varies each year) for airfare; stay in Makkah and Madina and for miscellaneous expenses. This money is paid to government-managed Haj committees which then transfers this money to other agencies. In other words, each Muslim pays for his/her own Haj expenses.
A significant chunk of money paid by Muslims goes to India’s government-owned national carrier Air India which enjoys a virtual monopoly on Haj circuit. The airline picks up passengers from around a dozen cities and flies them to Jeddah. The Air India inflates India-Jeddah tickets during the Haj season. This so-called government subsidy is used to pay for tickets that are always higher than the prevailing airfare charged by other airlines. A breakdown would show that an Air India ticket to Jeddah would cost more than a trip to Los Angeles from India. Essentially, the government takes money from one pocket and puts it back in another. Muslim have always demanded global tenders for Haj flights and for providing accommodation in Makkah and Madina..
However, while Naqvi sought to take a high moral ground by claiming that his party appeases no section of the society, his own government spends billions of rupees on organizing Hindu pilgrimages every year
Naqvi saab, this is what you learnt in Madrasa? U r Back-Stabbing Muslims. There is no 1% quality of muslim in you. After joining BJP you have lost it. First learn humanity. Almighty will give answers for all problems you have created for others.
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