No major hurdle to trade deal: India, US
NEW DELHI: India and the US on Thursday said there was no structural reason or major issue holding back a bilateral trade deal, even as the two sides differed on New Delhi’s ecommerce policy.
“Neither government said that there will be a trade deal in five minutes. That was not us, wasn’t (commerce) minister Piyush Goyal. I think that was just speculation,” US secretary of commerce Wilbur Ross said at the ‘Trading Against the Tide’ session of the India Economic Summit here on Thursday. “We do think that there is no structural reason why there can’t be one pretty quickly. We know each other’s issues.”
His statement comes in the wake of expectation of the two sides announcing a limited-scope trade deal last week, when PM Modi met US President Donald Trump.
“It is more of a question of scheduling time and scheduling calls and meetings that will determine how long that will take. But, I don’t see any big issue that is holding it back for any reason,” commerce and industry minister Piyush Goyal said at the same session.
Terming India-US trade relations a “torrid love affair”, Goyal said every country had a policy space but that had not affected India’s discussions or negotiations with the US. “They’re progressing very smoothly and in the same spirit of understanding,” he said, highlighting the bilateral trade target of $500 billion.
Assuring that the announcement of a trade deal was not holding back Indian trade or Indian relations either at the geopolitical, leader or even business level, Goyal said: “But we want to actually take a quantum leap in that, which is the direction in which both nations and our negotiating team are working.”
“We also believe that focusing bilaterally, we can achieve much faster result that focusing bilaterally, we can achieve much faster results for all countries involved,” Ross said.
On the issue of India buying S-400 air defence system from Russia and the US threatening to impose sanctions, Ross said: “India has historical connections with Russia. We understand that but there are issues of compatibility between Russian and US equipment.”
On the issue of import duties on Harley-Davidson bikes, Ross said: “I don’t think we treat unfairly India at all relative to anyone else.”
The two sides, however, had divergent views on India’s ecommerce policy. The US understands the political sensitivity of small retailers, farmers and other groups, but India needs to balance the interests of its small retailers and international giants such as Amazon and Walmart, Ross said.
Goyal, on the other hand, insisted that India was not opposed to ecommerce, but would protect its small firms.
“India needs to balance and will manage the balancing act between these competing activities,” Ross said, adding that Amazon and other ecommerce companies didn’t get to be the world’s biggest by any evil mechanism. “They got there because they’re extremely efficient, effective in what they do,” he added.
Goyal said an ecommerce platform “is not expected to become a platform either for predatory pricing or to use muscle power of large capital at low volumes available, which allows companies to source cheap, get economies of scale in sourcing and maybe offer discounts which in some sense throw out small retail out of business. We are very clear about it”.
His statement assumes significance as concerns were raised by the government and small traders over certain e-retail companies circumventing rules related to foreign direct investment.
Explaining that small retail was a sensitive subject, Goyal said the government was clear to not let small retail die. This is why it has restricted FDI in multibrand retail at 49%, the minister said.
“We don’t change rules midway. We in fact provide a very stable and predictable regulatory framework,” Goyal said, on being asked about the continuity of India’s foreign investment policy.
“Ecommerce is expected to be an agnostic platform. It is not expected to become a platform either for predatory pricing … and offer discounts and throw out small retail out of business,” Goyal said, adding that the government was working on a roadmap for acalibrated glide path to build alternative work opportunities for small retailers.
On Ross’ comment that Amazon was spending one-third of what it spent the year before in capex, the Indian minister said the company might have over-invested earlier or was unable to do things that they were possibly doing before.