In a significant development, India and the United States agreed to expand trade on some agricultural products, including US distiller dried grains, cherries, alfalfa as well as Indian mangoes, grapes, shrimp and water buffalo meat.
In a joint statement following the first U.S.-India Trade Policy Forum meeting in the trade ministers of both countries discussed the possibility of restoring India’s trade benefits under the U.S. Generalized System of Preferences.
The joint statement comes after the U.S. Trade Representative Katherine Tai ended a two-day visit to try to rebuild trade ties between two of the world’s largest democracies.
“The Ministers expressed an intent to continue to work together on resolving outstanding trade issues as some of these require additional engagement in order to reach convergence in the near future,” said the statement from Tai and Indian Minister of Commerce and Industry Piyush Goyal.
India and the US sparred across a range of issues including tariffs for more than a year, hampering the prospects of concluding a bilateral trade agreement.
The agreement comes after Indian Prime Minister Narendra Modi met U.S. President Joe Biden in Washington in September with both leaders agreeing to expand trade ties to strengthen relations.
“The forum heralds a new beginning in India-U.S. trade partnership,” said Goyal.
Both trade ministers agreed to use the “revitalized” forum to rapidly engage on new trade concerns and evaluate progress on quarterly basis.
Both ministers also discussed U.S. interest in supplying ethanol to India and speeding up phyto-sanitary work to allow more agricultural imports for both countries, including U.S. pork and Indian table grapes.
New Delhi also raised the issue of the US restoring its beneficiary status under GSP, a U.S. program that provides some tariff-free access for imports from developing countries that expired at the end of 2020. In 2019, the Trump administration had terminated India’s access for about $5.6 billion of annual exports amid disputes over digital trade and other issues.
The United States noted in the statement that “this could be considered, as warranted, in relation to the eligibility criteria determined by the U.S. Congress.”
Tai, accompanied in New Delhi by Deputy U.S. Trade Representative Sarah Bianchi, had earlier raised issues of high tariffs, market access restrictions, unpredictable regulations and restricted digital trade between the two countries.
India pushed back US demands to further lower tariffs, since applied tariffs were already below the permissible limit under the WTO rules.
Bilateral goods’ trade between the two countries rose by around 50%, compared to a year earlier, with both economies reopening after the COVID-19 pandemic; trade ties are set to surpass $100 billion this year, said the joint statement.