US assures India of comparative advantage under proposed trade deal
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US negotiators have assured India of a comparative advantage over its competitors under the proposed bilateral trade deal, a senior government official said on Friday.
The agreement will also include provisions allowing India to modify concessions if the US imposes tariffs beyond its commitments.
Negotiators from both countries are continuing discussions to finalise the first tranche of the trade agreement, which will not cover services. The latest round of talks, held during the first week of November, resolved several portions of the customs and trade facilitation chapter.
“US negotiators were here for two days during the first week of November. There is a chapter on customs and trade facilitation under the US trade deal. Many portions of the text were resolved. The US side has assured us of comparative advantage over our competitors. We will have to see how their tariff structure unfolds,” the official said.
On the possibility of future tariffs, the official said, “What we have said is that in case there is a future tariff which goes beyond commitment, India also reserves the right to modify concessions”.
The final US tariff structure is expected to become clearer after the United States Trade Representative (USTR) releases findings from its second Section 301 investigation into industrial overcapacity. India is among 14 countries that have acknowledged the challenges posed by excess production capacity and agreed to take “effective actions” to address them.
India has ruled out opening its dairy sector or allowing imports of genetically modified (GM) products under the deal. Commerce and Industry Minister Piyush Goyal reiterated the position on November 3, citing religious sensitivities and the use of calf meat or rennet in some dairy products.
The USTR has described India's dairy import requirements as “onerous” and questioned the health justification for rules governing animal feed used in dairy production.