New Delhi: In what may contribute to growing uncertainty in trade ties between India and the US, the annual bilateral trade policy forum (TPF) meeting between the two countries is unlikely to be held this year, amid a growing feeling in the US that such high-level talks have not delivered intended results.
Established in 2005, TPF seeks to resolve outstanding bilateral issues between the two countries and promote trade and investment through focused discussions under various working groups such as on agriculture, tariff and non-tariff barriers, services, investment and innovation.
The 10th TPF was held in New Delhi between India’s trade minister Nirmala Sitharaman and then US Trade Representative (USTR) Michael Froman in October last year.
“The US is yet to appoint senior officials in its trade department including deputy USTR with whom details could be discussed. Since the Trump administration is focused on domestic issues right now, we don’t think the TPF meeting which is usually held in October can take place this year,” an Indian commerce ministry official said on condition of anonymity.
The two sides in the recent past have been engaged in trade disputes at the World Trade Organization over issues such as solar panels, poultry and steel while the US has repeatedly complained against India’s “trade restrictive” policies in pharmaceuticals, information technology and intellectual property rights, among others. India has maintained that it abides by the internationally acceptable standards in all such matters.
In a letter written to president Donald Trump ahead of Prime Minister Narendra Modi’s visit to the US last month, four US senators said high-level discussions under strategic and commercial dialogue (S&CD) and TPF have not resulted in the elimination of major trade and investment barriers or even deterred India from imposing new barriers, urging Trump to raise the matter with Modi. “As a result of India’s persistent failure to enact market-based reforms and resolve significant and discriminatory impediments to trade and investment, the US and India economic relationship severely underperforms,” they wrote.
In turn, Trump, during his meeting, urged Modi to do more to relax trade barriers. “It is important that barriers be removed to the export of US goods into your markets and that we reduce our trade deficit with your country,” he said, seeking a trade relationship that is “fair and reciprocal”.
India had a trade surplus of $20 billion in 2016-17 with exports of over $42 billion to the US during the same financial year.
Indian observers were disappointed as the joint statement after the bilateral meeting did not acknowledge India’s concern regarding H1B visa restrictions.
“The United States and India plan to undertake a comprehensive review of trade relations with the goal of expediting regulatory processes; ensuring that technology and innovation are appropriately fostered, valued, and protected; and increasing market access in areas such as agriculture, information technology, and manufactured goods and services,” the joint statement said.
Biswajit Dhar, professor of economics at the Jawaharlal Nehru University said the trade relationship between the two countries under the new US establishment is likely to be a problematic one with Trump’s sole focus on increasing exports. “India needs to tell the US government that it is not manipulating its policies to favour any particular country, rather letting the market forces work. If the US companies are not able to export more to India, then they need to think over their competitiveness. India cannot put any voluntary export restraint on its shipments to the US to reduce its bilateral trade surplus,” he added.