India and US are inching closer to sign an initial limited trade agreement and iron out differences on trade issues to boost economic ties. Both sides have expressed desired for a bilateral Free Trade Agreement (FTA), according to a press release by the commerce ministry.
Commerce and Industry Minister Piyush Goyal held an informal tele-conversation with US commerce secretary Wilbur Ross on Thursday. "There was a desire expressed to conclude this initial limited trade package and recognising the complementarities of the India-USA bilateral trade, discussed the possibility of an FTA," the commerce ministry said in a release yesterday.
According to media reports, the proposed deal with the US will pick up only after the US presidential elections, scheduled in November.
India also flagged the long-pending proposal for a Totalisation Agreement to protect the interests of professionals of Indian-origin who contribute more than $1 billion each year to US social security. Under this pact, professionals of both countries would be exempted from social security taxes when they go to work for a short period in the other country.
While appreciating India's concern, Secretary Ross mentioned that the statutory requirements of the US have to be fulfilled by India in this regard.
India has also raised its concern on the US keeping 24 Indian products, including handicrafts, carpets, and leather products under the Trafficking Victims Protection Reauthorisation Act list, which designates them as 'child labour sectors'.
On this, Ross offered to set up a meeting between the labour department officials of both sides, the ministry's statement said.
India demanded exemption from high duties imposed by the US on some steel and aluminum products, resumption of export benefits to certain domestic products under the Generalized System of Preferences (GSP), and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.
Trade minister Goyal also raised the issue of the US ban on import of wild catch shrimp from India. The US said that India's fishing practices were non-compliant with their regulation to protect sea turtles.
On this issue, Secretary Ross agreed to facilitate a discussion between the officials of the US state department and the Office of Marine Conservation with the Indian Department of Fisheries and Ministry of Forest and Environment, Goyal said.
The US remained India's top trading partner for the second consecutive fiscal in 2019-20. According to the data of the commerce ministry, in 2019-20, the bilateral trade between the US and India stood at $88.75 billion, as against $87.96 billion in 2018-19.
The US is one of the few countries with which India has a trade surplus. The trade gap between the countries has increased to $ 17.42 billion in 2019-20 from $ 16.86 billion in 2018-19, the data showed. In 2018-19, the US had surpassed China to become India's top trading partner.