Finance Minister Nirmala Sitharaman has said the negotiations between India and the US on a trade deal are going in "full speed" and expressed hope that an agreement will be structured soon.
The ongoing trade deal negotiations briefly came up for discussion during a pull aside between Sitharaman and US Treasury Secretary Steven Mnuchin at the IMF headquarters. Mnuchin is scheduled to visit India early next month.
"In fact, I broadly mentioned it to Secretary Mnuchin, but that is something on which the Commerce minister and Mr (Robert) Lighthizer (US Trade Representatives) are working. My inputs are that the negotiations are going in full speed and there's a great intensity with which both sides are engaging and hopefully the deal will be structured soon," Sitharaman said on Saturday.
India is demanding exemption from high duties imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their Generalised System of Preferences (GSP), greater market access for its products from sectors, including agriculture, automobile, auto components and engineering.
On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items and medical devices, and cut on import duties on some ICT products. The US has also raised concerns over high trade deficit with India.
In 2018-19, India's exports to the US stood at USD 52.4 billion, while imports were USD 35.5 billion. Trade deficit dipped from USD 21.3 billion in 2017-18 to USD 16.9 billion in 2018-19.
Responding to a question, Sitharaman said a totalisation agreement with the US has always been on the cards.
Totalisation agreement seeks to eliminate dual taxation with regards to social security and medicare taxes in the United States.
"One of the reasons why that was never responded to was that India did not have a social welfare net or social insurance cover for Indians in India. And therefore, if they had to give it, they wouldn't be given in the sense where would it be used? she said.
"Today, I think most private insurances or for many of the families which are below the certain level of income, Ayushman Bharat is a fantastic big coverage. There is also now a lot more private sector option for insurance coverage. So whether that has been factored in now in the negotiations on this particular thing, I'm not adequately informed," Sitharaman said.
She said India in the past even, when she was the Commerce minister, had put several arguments before but that was repeatedly stonewalled over the health cover issue.
"I remember that. I've heard it at least twice in my negotiations on the totalisation," Sitharaman said. It could be "humongous amounts", she added. Most of the Indians working in the US unfortunately have no claim over their social security deductions, because there is a minimum period of at least 10 years, she said. "It's so designed that you really can't benefit. And no one in any case does live for that duration in this country," she said.
An official release issued said Sitharaman had a "fruitful" dialogue with Mnuchin.
The two sides agreed to continue the dialogue in the first week of November during Mnuchin's visit to New Delhi, it said.