India has offered the United States partial access to its poultry and dairy markets in an effort to sign a limited trade deal during US President Donald Trump’s visit to India later this month, Reuters reported on Friday citing unidentified officials. Trump is scheduled to visit India on February 24 and 25.
India is the world’s largest milk-producing country. However, it has hesitated to open its dairy market in order to protect the livelihoods of eight crore rural households engaged in the industry.
The US is India’s second-largest trade partner after China, and bilateral trade between the two countries climbed to a record $142.6 billion in 2018. The US has a trade deficit of over $23 billion with India.
Reuters cited unidentified government officials as saying that India has offered to import to US chicken legs, turkey and produce such as blueberries and cherries. It has also offered to cut tariffs on chicken legs from 100% to 25%. However, US officials who are part of the negotiations want the tariff to be reduced to 10%.
The Narendra Modi-led government’s willingness to open up the dairy market also comes with the rider that a 5% tariff will be imposed on imports. Moreover, dairy imports would need a certificate that they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.
India has also reportedly offered to lower its 50% tariff on very large Harley-Davidson motorcycles. In June last year, Trump had said that 50% tariff on these motorbikes is too high. “So, when Harley sends over there, they have 100% tax,” he said. “When they [India] send in they make a tremendous number of motorcycles when they send them in, no tax. I called him [Modi]. I said it’s unacceptable.” Trump made the comments even after India slashed duty on these bikes from 100% to 50%.
However, on Thursday, the US dairy industry remained skeptical. “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. He added that the US dairy industry is looking for markets which it can access in viable commercial quantities.
US trade representative puts off visit
Meanwhile, US Trade Representative Robert Lighthizer put off his trip to India this week, Reuters reported. Lighthizer was expected to visit India on Thursday, but no reason was given for the cancellation or postponement of the trip. However, Lighthizer may still visit India along with Trump to sign a “mini-trade deal”.
“If [Trump and Prime Minister Narendra Modi] fail to bring even a modest agreement forward, it will be a missed opportunity to make progress that can benefit both countries and strengthen economic ties,” US-India Business Council President Nisha Biswal told Reuters. However, Biswal added that she was optimistic that a limited trade deal would be signed between the two countries.