US dairy is anxious for better access to India’s market for exports, but it will be at least a little while longer before a revised trade deal is signed.
First Lady Melania Trump will accompany the president to New Delhi and Ahmedabad, India next week in their first official visit to the country. India reportedly offered to partially open up its market for a limited trade deal on this visit.
The White House said the trip is intended to “further strengthen the US-India strategic partnership and highlight the strong and enduring bonds between the American and Indian people.”
Many took this to mean an informal or limited trade deal may be announced as a result of Trump’s meeting with Indian Prime Minister Narendra Modi. But on Tuesday, Trump commented on the pending trip to reporters.
“We can have a trade deal with India, but I’m really saving the big deal for later on. We’re doing a very big trade deal with India, we’ll have it,” Trump said.
“I don’t know if it will be done before the [November 2020 US general] election, but we’ll have a very big deal with India. We’re not treated very well by India, but I happen to like Prime Minister Modi a lot.”
In spring 2019, Trump terminated the preferential trade status granted to India under the Generalized System of Preferences (GSP). This allowed it to deny market access to US dairy products, ongoing since 2003.
The administration said India failed to provide ‘equitable and reasonable access to its market’ and comply with other provisions. Following this, India raised tariffs on US products like almonds, walnuts and apples in summer 2019.
There is a possibility that returning GSP rights to India could be part of a potential trade agreement.
US Trade Representative Robert Lighthizer typically travels to countries with pending trade deals ahead of Trump for preliminary negotiations. He was expected to arrive in India this week after months of long-distance talks with India’s Commerce Minister Piyush Goyal.
But Lighthizer put off the advance trip and remains in the US.
Nisha Biswal, president of the US-India Business Council (USIBC) at the US Chambers of Commerce, told India Today that if Trump and Modi “come together without any forward movement on a trade package, [it] will be a significant setback for both countries.”
She said the visit should create renewed energy and momentum in the US-India relationship, but “at this stage, a comprehensive deal is not what the two countries are working towards in the short term.”
Both sides need to make some headway during this visit, Biswal advised, but with the uncertainty of Lighthizer’s attendance it’s unclear if trade talks will proceed.