India rules out FTA with US for now — Here are other highlights from the trade ministers’ meeting

Union Minister of Commerce and Industry and his American counterpart Trade Representative Katherine Tai concluded the two-day U.S.-India Trade Policy Forum (TPF) on Wednesday in Washington D.C.

The two countries launched a new TPF Working Group on Resilient Trade, which enables officials to deepen bilateral dialogue and enhance their trade relationship's resiliency and sustainability to withstand current and future global challenges, said a joint statement.

The two sides had hoepd to work together to resolve outstanding trade issues which require convergence such as visa delays and the revoking of India’s trade benefits under the Generalized System of Preferences (GSP) program in 2019. TPFs such as this one help forge robust bilateral trade ties and enhance the bilateral economic relationship between the countries to benefit working people in both places. Both Goyal and Tai appreciated that bilateral trade in goods and services continued to rise rapidly and reached about $160 billion in 2021.

While on his official visit to the United States, Goyal also delivered remarks at Nasdaq and spoke with several industry leaders such as Mastercard CEO Michael Miebach and Blackstone CEO Stephen A. Schwarzman.

The Modi government and the Biden administration are "thinking big" in terms of their trade and commerce relationship, Goyal said on Wednesday as he ruled out the previously talked about mini trade deal or a free trade agreement (FTA) and noted that restoration of GSP is not a priority for New Delhi.

The previous Trump administration revoked the GSP from India which allows eligible developing countries to export duty-free goods to the US.

It is during the previous administration as well that the two countries were on the verge of a mini trade deal, which has now been kicked out of the table. The Biden administration is also not in favour of a free trade agreement which businesses from either side are now talking about.

Goyal said that he hadn't heard "any significant clamour" from industry leaders in India but had raised the issue with his counterpart.

"It's an issue, which is probably something that the Congress will have to take a call on. But it's not something which has been high on our priority lists or something on which we spend a lot of time to discuss, it was discussed, but more in passing," he said.

Goyal, however, assured that trade between the two countries is expanding rapidly and would not be negatively impacted by the GSP withdrawal.

Responding to another question on the mini trade deal, Goyal said "it was too mini" to really merit any great effort on both sides and that India had "much, much bigger ambitions" in its trade with the US. They have lost relevance today, he said, and the country is looking for a "much larger footprint" for business and investment opportunities.

While lauding its free trade deals with Australia and the UAE, Goyal said it was actually the United States which was "currently not looking at any free trade deals with any country whatsoever, as a matter of their political policy."

"The FTA is not on the table," he asserted.

India discussed with the US the inordinate delays in issuance of business visas to the people from India, and there has been a good resonance of it by the Americans, Goyal said.

India, Goyal said, has made the request to the US that they may speed up the issuance of regular business visas when people come in for short trips to pursue their trade and business interests.

"We are delighted that the movement of professional and skilled workers, students, investors, business travellers, all are expanding between the two countries. That has helped increase our bilateral relations," he noted.

He also expressed his gratitude for visas processes being expedited for students in Fall 2022 in the post COVID-19 scenario.

"We are now requesting them to see how we can resolve the movement of business persons on short term stays to the US," Goyal said.

Responding to a question, Goyal disagreed that TPF has not been productive in terms of deliverables.

"I don't think so. There are market access issues which don't come into the TPF in terms of the detailing. Both Katherine Tai and I decided that we should leave those details for the officials to work on and continuously expand," he said.

Goyal said they both agreed to move beyond earlier trade deal formats such as having one-is-to-one issues like India will open table grapes for them and the US will open up their country for Indian mangoes.

Tai and him decided that this is "not the age and day" to look at trade literally and square off issues. They, instead, have chosen to look at the "big picture" and what's good for both countries.

"For example, on the big picture when we discussed semiconductor manufacturing, we are looking at a much deeper engagement with the US on semiconductor manufacturing," the minister said.

Several American companies are looking at the big Indian opportunity on defense production, making it competitive, giving an opportunity to tap into the large Indian market, where they are encouraged to make India products and they feel comfortable working with India.

"Because unlike other countries, we do not steal technology. We allow you to maintain the sanctity of your technology. We allow you to keep your technology with you. We don't demand technology transfer," he asserted.

India and the United States are developing a mechanism for Indian fishermen to export wild-caught shrimp for American consumers, Goyal told reporters on Wednesday after the conference.

This was an area that was banned by the U.S. over concerns regarding turtles in areas where wild-caught shrimp were being fished in India, he said.

"A turtle excluder device has been designed with the technical support of the National Oceanic and Atmospheric Administration from the US, and that design has been accepted now between the two countries as a collaborative effort between India and the United States,” he said.

The device is now being taken up for trials. The trials of that machine, he said, will ensure that the turtle excluder device will minimize the impact of fishing on the sea turtle population. Upcoming trials could determine the fate of shrimp exports from India to the US, he said.

"It was a product of good acceptance in the US market, good taste and has good potential for trade between the two countries," Goyal said.

The next G20 summit presents a "great opportunity" for India to showcase many of its strengths and provide leadership to several challenges the world is facing, Goyal said.

India formally assumed the G20 Presidency on December 1. The next G20 Leaders’ Summit at the level of Heads of State is scheduled to be held on September 9 and 10 in New Delhi.

Goyal also said that Prime Minister Narendra Modi is considered as one of the "tallest leaders" of the world and believes in actions and solutions.

"If you recall, when Vice President Al Gore had come out with the inconvenient truth, Prime Minister Modi had come out with his own treatise on convenient action, because he's a person who believes in action. All his life, he has been a person who believed in solutions," he said.

The TPF had five focus groups — agriculture, investment, innovation and creativity (intellectual property rights), services and tariff and non-tariff barriers.

The 12th TPF meeting was held on November 23, 2021, after a gap of four years.

The meeting was deferred earlier in November last year due to local elections in both countries. In last year's meeting, India had asked for the restoration of GSP benefits to Indian exporters on which the US side had stated that this could be considered.