Ross: India must conclude a trade agreement with the United States
US Commerce Secretary Wilbur Ross said Thursday the US and India could quickly reach a trade deal if New Delhi takes decisive action to do so..
«We really think there is no structural reason why there cannot be (deal) fairly quickly», – said Ross, speaking at a panel session of the Indian Economic Summit in New Delhi. He is going to meet face to face with the Minister of Railways and Trade of India, Piyush Goyal.
«Each of us knows each other’s problems, we have a lot of time», – Ross said, adding that following Prime Minister Narendra Modi’s decisive victory in parliamentary elections earlier this year, the Indian leader «very clear strong position in parliament and it should now be much easier to take decisive action».
Washington and New Delhi have been clinched in a trade dispute for several months. For its part, the U.S. excluded India from the Generalized System of Preferences earlier this year, citing unequal access to the Indian market – a program that has been in place since the 1970s for developing countries, has allowed India to export many of its goods to the U.S. market without duties.
India responded by introducing retaliatory tariffs on 28 US products, including almonds, apples and walnuts.
India was the 13th largest merchandise export market for the United States in 2018, according to the Office of the U.S. Trade Representative. Trade deficit with India was $ 21.3 billion last year, down 7.1% from 2017.
On the trade side, one of the main focuses of President Donald Trump’s administration has been reducing trade deficits with countries, including revising some of the existing trade agreements. Washington is also waging a protracted trade war with Beijing – both countries apply tariffs on each other’s billions of dollars of goods, creating global uncertainty and worsening economic prospects.
Ross clarified that while the focus is on reducing the trade deficit, the US will not advocate unfair trade practices, even if it leads to a reduction in the deficit.. «We believe that much of what we are asking for will not only help the United States with India, we believe that a lot of it will help India itself.», – said the head of the US Department of Commerce.
The US wants India to cut tariffs on certain exports, including motorcycles and some agricultural products. In exchange, India wants to restore preferential treatment on some of its exports to the United States..
The trade deal between the two countries was discussed during Modi’s last visit to the United States, where he and Trump performed on the same stage at a mass rally..
In a meeting with Goyal, Ross will discuss ways that South Asia’s largest economy can take advantage of ongoing U.S.-China trade tensions.
Confederation of Indian Industry CEO Chandrajit Banerjee says there are still expectations for a trade deal between the two countries, but it may not be comprehensive..
«I am pretty much confident that both the US and India will definitely go to some kind of agreement that may not be comprehensive, but separately there are many advantages and benefits that both sides can agree with, ”he said. CNBC. – I see no reason why we will not be able to soften our position in some of them».
He added that both New Delhi and Washington recognize the importance of each other as trading partners. When asked about the U.S. impact on India’s exclusion from the U.S. program, Banerjee said it mostly hurt small or medium-sized companies..
One area of contention between the two countries is India’s e-commerce sector, where the government approved regulations in February that affected the likes of Amazon India and Walmart’s Flipkart. These companies were forced to restructure their businesses to comply with new rules aimed at not giving customers discounts. India also limited foreign direct investment in multi-brand retailers.
These steps are designed to protect smaller retailers, Goyal said in a panel session..
He clarified that his government does not change the rules halfway through and that it ensures «a very stable and predictable regulatory framework, and where we find concerns, we usually try to engage in dialogue».
Ross said the changes likely prevented Amazon from investing more in its Indian business.. «They probably would have spent a lot more in India if they hadn’t felt that economic growth was slowing due to some of these policies.», – he said, adding that India needs to figure out how to balance the protection of small businesses without restricting large companies.