What are the main issues in India-U.S. Trade Talks?
U.S. president Donald Trump said that he spoke to Indian Prime Minister Narendra Modi this week about trade and that Modi assured him India would restrict its oil purchases from Russia.
Indian refiners, who are major buyers of Russian oil, said that they will cut their imports sharply after the United States sanctioned Russia’s top oil producers. This could be a crucial step in a U.S. India trade agreement.
Why India wants a trade deal with the USA
India is facing steep tariffs of 50% on its exports to America - half of which are aimed at punishing Russian purchases of oil. This puts pressure on industries such as textiles, jewellery and leather goods, but also on the key industries of textiles, seafood, leather and engineering goods, all of which employ millions.
According to some reports, the United States may reduce tariffs on Indian imports from 50% to 15-16%. The deal is likely to be based on energy and agriculture.
What concessions is the U.S. WHAT CONCESSIONS IS the U.S.
The United States is eager to sell corn and soybeans to India.
India is increasingly turning to corn for ethanol production, but its regulations prohibit ethanol produced from imported grains as well as genetically modified food crops. Most of the corn grown in the United States is GM, but some farmers grow non-GM varieties.
The United States wants India to allow corn imports. They argue that the ethanol produced from U.S. grain will be blended with gasoline only and won't enter Indian agriculture.
Why does Trump want to export corn, soybeans and soymeal?
The tit-for-tat trade tariffs between Washington and Beijing made U.S. soya beans too expensive for Chinese buyers, who have been the largest soybean importers in the world.
Washington wants to sell oilseeds to India to help U.S. farmers who have surplus soybean stocks. India, home to the largest cattle herd in the world, is being urged by Trump's administration to purchase American soymeal - a high-protein animal feed.
Is India willing to allow such imports?
New Delhi refused to grant market access to American dairy and grains, citing concerns about the livelihood of small farmers. India may allow some corn and soybean meal imports.
India's soybean sector has argued against the importation of American soybeans as well as soymeal. They claim that such imports will harm the country's oilseed producer and that India has surplus stocks.
The ethanol industry is resisting corn imports because they say that any shipment of the grain will disrupt the entire supply chain. This is especially true since India's ethanol consumption exceeds its production capacity.
As assembly elections in eastern Bihar near, a state that is a major producer of corn and has sway over a large voting bloc, U.S. imported corn could enrage farmers. (Reporting Mayank Bhardwaj, Reporting Crispian Balmer).
(source: Reuters)
