india

Updated: Sep 19, 2019 08:52 IST

A trade deal with the United States is not expected to be among the bouquet of announcements, which could include some investments, from Prime Minister Narendra Modi’s bilateral meeting with US President Donald Trump on the sidelines of the UN general assembly debates next week. But the two sides can get closer to an agreement or arrive at, what an expert has said, a “trade understanding”.

“It will be premature to talk about a trade deal,” a person familiar with discussions taking place about the bilateral said, adding “we have not reached that stage yet.” Some investments and “positive” business announcements are expected and the Prime Minister will be reaching out to leading business leaders at separate engagements, as he has during every US visit before.

Neither country has officially announced the bilateral but Modi and Trump will be holding a delegation-level meeting next week, their second interaction in a week following a joint appearance and address at an India American outreach event — “Howdy, Modi!” — in Houston on Sunday.

Trade is likely to figure as it has on all of their previous, specially the two recent once on the sidelines of the G-20 summit in Osaka, Japan in June and of the G-7 in Biarritz, France in August, which was overshadowed by discussions on Kashmir with Modi firmly, and politely, turning down Trump’s repeated offers to mediate.

Officials from the two countries have been working towards resolving trade issues that have always been around in some form or the other but have shot to the top of the list the bilateral agenda under President Trump who has stressed the need for equitable tariffs, level playing field and market access.

External affairs minister S Jaishankar acknowledged those discussions at his news conference Tuesday, even as he sought to characterize them as unavoidable among trading partners and reflective of close ties. He said a “lot of conversations” have taken place with the Americans since the Modi government began its second term 100 days ago and a “time will come”, he had added, when discussions that are currently being held mostly by bureaucrats level will be elevated to a “higher level”: to find some common ground.

The minister, who is a veteran of ties with the US as a former diplomat and ambassador to the US, said he expects some of the “sharper edges” of the talks to be addressed in some form or the other “in not too distant future”. But that did not sound like they would in time for the upcoming bilateral.

There is a buzz in Washington about these trade talks. The Washington Examiner on Tuesday reported that negotiators are close to a “breakthrough”, and they may have a deal ready for signing at a future meeting of the two leaders.

Though the larger deal, or agreement, will take time, as the external affairs minister has said, some progress is expected. Atman Trivedi, a former department of commerce official in the Obama administration who is now managing director at Hills & Company, said that a deal, if reached at all, will be “targeted” and “modest”, but the two sides could come to a “trade understanding” and that would be just as significant.

“These initial steps can and should pave the way for progress on a broader basket of issues, including IP, the digital economy, and e-commerce,” he said. But that will require political will and a sustained, discipline approach by both countries.”

The United States has been pressing India for more access to its dairy sector, remove price controls for medical devices, cut ICT tariffs and roll back new measures regarding data localization and e-commerce. Progress has been made on some of these issues, according to some people involved in them.

India has asked to be reinstated to a special trade programme under which the United States allows duty free imports from 120 countries, of some not all their goods, called the Generalized System of Preferences. India exported goods worth $6.3 billion under this programme in 2018. It was removed from the list in June, for giving into US demands on some of the above issues.