New Delhi/Geneva: Ahead of a bilateral meeting with Prime Minister Narendra Modi, US President Donald Trump said the two countries will soon sign a limited trade accord, while a free trade agreement will be signed later.
“We will have a larger trade deal down the road, but we will have a (limited) trade deal very soon," Trump told reporters.
The bilateral relationship between the two countries has deteriorated under the Trump administration, with the US withdrawing zero duty benefits to Indian exporters worth $5.6 billion and India imposing retaliatory tariffs on 29 products imported from the US.
The limited or interim trade agreement is likely to cover tariff-related concessions for US farm products, especially dairy items, pricing of pharmaceutical products such as stents and knee implants, and information and communication technology products.
In return for more than a billion dollars of trade-related concessions from India, Washington would partially restore benefits accorded to Indian exporters under the Generalized System of Preferences (GSP), which was terminated by Trump from 5 June.
Gains from the limited opening up of the GSP window for Indian products are estimated at around $200 million. India could also get additional market access for some agricultural produce such as grapes and pomegranates.
The US has delivered a long list of demands to India to be addressed in the next two months before a possible visit by Trump to New Delhi in November, said a Washington-based trade analyst.
India must address US concerns, including the pricing of medical devices, enforcement of intellectual property provisions for pharmaceutical products, relaxation of Indian laws covering e-commerce and digital trade in which Amazon and Walmart have a significant stake, and various sanitary and phyto-sanitary measures.
Even though the US is treaty-bound to restore the GSP benefits under international trade rules, Washington has succeeded in extracting a huge price from New Delhi by prying open the Indian market for heavily subsidized US farm and dairy products, said a South American trade analyst, who asked not to be named.
In effect, for a violation committed by Washington through the termination of the GSP programme, India is being asked to pay a price for a partial rectification of that violation, said a legal analyst, who asked not to be named.
The US GSP programme offers many developing-country exports duty-free access to the US market. Indian exporters secured US market access benefits to the tune of more than $5.6 billion under the GSP scheme.
Trump on Tuesday said he was confident the leaders of India and Pakistan would come together very soon.
The US president also likened Modi to legendary rock star Elvis Presley. “People went crazy. It was like Elvis Presley came back," Trump said referring to the Indian prime minister.
PTI contributed to this story.