Brendon Lynch, the US trade negotiator, is due in New Delhi on Tuesday for a day of talks with Indian officials, rekindling hopes of reviving stalled discussions aimed at easing the tariff standoff between the two countries.
The move comes after Trump struck a more conciliatory tone in statements last week and expressed optimism that they could finalise a trade deal. It was immediately reciprocated by Prime minister Narendra Modi via social media.
The US has slapped a 50 per cent tariff on two-thirds of India’s goods export to the US for buying Russian oil from August 27. The scheduled sixth round of discussion to finalise the bilateral trade agreement in the last week of August was cancelled indefinitely.
Rajesh Agarwal, India’s commerce secretary in waiting, and chief negotiator, clarified that Lynch’s visit is a precursor to the sixth round of talk.
“We have indicated that in the past also the discussions are going on, the chief negotiator of the US is visiting India tonight and tomorrow will be holding talks to see what can be the picture,” Agarwal said.
“It is not the sixth round of negotiations. but it is definitely discussions on the trade talks and trying to see how we can reach an agreement between India and the US.”
Lynch is the Assistant US Trade Representative for South and Central Asia, overseeing the development and implementation of US trade policy with regard to 15 countries in the region, including management of the US-India Trade Policy Forum (TPF).
The meeting assumes significance as the full impact of the 50 per cent tariff, one of the highest to be faced by any country, will start biting India from September.
While Lynch’s visit raised hope, there are multiple areas of divergence between the two countries, such as India’s high tariff on farm and dairy products.
In an interview, Howard Lutnick, US Commerce Secretary, recently warned that India would face a “tough time” unless it agreed to greater market access for American agricultural exports such as corn.
“India brags that they have 1.4 billion people. Why won’t their 1.4 billion people buy 1 bushel of US corn? Doesn’t that rub you the wrong way?” he asked.
Lutnick demanded India should ‘fix’ this. “Either you accept it or you are going to have a tough time doing business with the world’s greatest consumer,” he observed.