India US Trade: India, an Important Trading and Strategic Partner: US Trade Representative
U.S. Trade Representative Katherine Tai, testifying before the Senate Finance Committee on Thursday during a hearing on the U.S. trade policy agenda, noted that there are stark differences between the two countries on a number of questions.
For example, during her trip to India in November last year, India strongly pushed back on the issue of alleged shrimp dumping, she said.
“I raised this issue directly with my Indian counterpart in Delhi last November when I visited him. I received a very violent pushback. But I am committed to working with you on this issue. And that means in our own system, but it also means engaging the Indian government. And I look forward to exploring ways to do that,” Tai told Senator Bill Cassidy in response to a question.
Cassidy alleged that hot water prawns from India are heavily subsidized and may not meet phytosanitary standards.
“Likewise, they apparently heavily subsidize their rice even before the seed is planted,” he alleged.
But the United States last year gained access for pork exports to India, Tai said, adding that she held a meeting with Trade and Industry Minister Piyush Goyal. .
Goyal, she told senators, “is very, very charismatic and also a strong advocate of his country’s policies; some of which I think we can strategically align with and some of which will continue and have proven to be a challenge for us. It was very important for us as USTR and for me personally to go to Delhi to revive this trade policy forum.
Following the Trade Policy Forum, the United States secured commitments from India to open trade for the first time or resume trade in a number of areas.
“The one that was delivered soon was the access of our American pork and pork products to India. We will continue to build on this relationship, which is so important strategically, but which has also traditionally been quite difficult,” she said.
During their meeting, Goyal had said that “the United States and India have realized the need to diversify their critical supply chains and are both poised to play an important role in the development of a resilient supply”.
He also suggested taking the bilateral relationship, which has changed in recent years, notably through defense cooperation and the quadrilateral security dialogue, to a higher level of engagement.
Senator Steve Daines said he also met with Goyal last year in New Delhi to advocate for reduced tariffs on the state of Montana and the United States.
“We talked a lot about the pulse – and seeing some of the major tech companies firsthand. It was in Bangalore,” he said.
“It was Delhi and Bangalore where I spent time. It is clear that in the years to come, India will play an even more important role in the region. Although it won’t be easy, the United States should consider entering into formal negotiations with India, which presents a huge growth opportunity for American farmers, especially a state like Montana — which is the first pulse producer, India’s number one consumer,” Daines said.
Daines asked what the USTR is doing for the U.S.-India Trade Policy Forum to address these longstanding agricultural market access issues.
“Isn’t this a new problem that we had with India and particularly related to legume crops?” He asked.
Senator Michael Bennet said India was a key US ally.
“I am deeply concerned about the status and trajectory of our relationship with India, especially in light of Russia’s invasion of Ukraine and India’s reluctance to condemn what (President Russian) Vladimir Putin did,” he said.
Tai said, “When it comes to India, India is such an important trading partner and a strategic partner. India is complicated and we live in a complicated world. It was extremely important for us in the Biden administration to revive this trade policy forum with India and do it at the ministerial level.”
“This was the first time in four years that the Trade Policy Forum (TPF) met. When he last met in 2017, it was so difficult that the two sides didn’t even issue a joint statement. This time we issued a joint statement which was really robust, about five pages I think, and which included important principles in which we agreed to work together as well as market access commitments that we made to each other others.
“It will continue to be a complicated relationship. But for you, this is an extremely important issue and in which we must continue to invest our dedication and ability to make breakthroughs,” Tai added.
In fiscal year 2021, the United States exported over $1.6 billion worth of agricultural products to India. Total bilateral trade stood at USD 80.5 billion in 2020-21 compared to USD 88.9 billion in 2019-20.
India’s exports to the United States amounted to USD 51.62 billion in 2020-21 from USD 53 billion in 2019-20. India’s imports from the United States amounted to $28.9 billion in 2020-21 from $35.9 billion in 2019-20, according to Commerce Ministry data.