India and the US could tweak the framework for an important annual dialogue to include defence as a key area of focus, along with strategic affairs and trade, sources told FE. Any such change to the template of the India-US Strategic and Commercial Dialogue means the defence ministry could also participate in the talks, apart from the ministries of external affairs and commerce and industry, said the sources. The move seems to be in sync with the spirit of a joint statement issued after Prime Minister Narendra Modi’s meeting with US President Donald Trump in the US in June, pitching for “prosperity through partnership” with greater co-operation in defence and counter-terrorism. It comes at a time when Indian and Chinese troops are locked in a stand-off at Dokalam, with Beijing maintaining a belligerent tone. Even the US is reportedly growing disenchanted with China’s perceived failure to contain ally North Korea. Just days ahead of Modi’s visit in June, the US government had authorised the sale of a naval variant of the Predator drones to India worth over $2 billion. Even Tata Advanced Systems signed an MoU with Lockheed Martin in June to make F-16s in India, although no time-frame is offered.
TPF meeting likely in October or December
Both the countries could hold the annual trade policy forum (TPF) meeting in either October or December, said one of the sources. The meeting between commerce and industry minister Nirmala Sitharaman and US trade representative Robert Lighthizer is expected to focus on four key areas: services, investments, agriculture and intellectual property rights (IPRs).
During the meeting, India is expected to ask the US to hold negotiations for a totalisation agreement to exempt its industry, especially IT, from mandatory payments for social security of their Indian employees in the US. The IT companies are paying around $1 billion a year to comply with social security norms for their Indian employees in the US, despite the fact that they don’t live there long enough to be eligible for such benefits. The tightening of visa permits for foreign skilled workers by the US could also be raised by the Indian side.
India and the US are learnt to be working on a set of “deliverables” — including greater market access and smoother trade in agriculture — that can be implemented without much hassles. Last month, at a meeting of senior Indian and American officials here, the US side, led by deputy assistant US trade representative for South and Central Asia Tanya Menchi, sought the removal of a cap on the prices of high-end stents that India has imposed to offer relief to cardiac patients.
The US is particularly interested in India removing price cap on bioresorbable stents. Apart from the fact that India is a large market for stent makers, including the US companies, the country also imports medical instruments, including stents, worth around $1.4 billion a year from the US. As for the agriculture sector, while India is seeking market access for grapes and favourable procedures for supplies of mango and pomegranate, the US side wants relaxed procedures for exporting alfalfa (used widely as animal feed) and cherry to India.
India has asked the US to recognise the oversight of commodities by its National Plant Protection Organisation in irradiation process for exports of mangoes and pomegranates, instead of stationing American inspectors here for this purpose, raising the costs of Indian suppliers. The US has asked India to recognise their approach in case of alfalfa, giving assurance that the products to be supplied to India will be free of pests. The Indo-US trade has inched up in recent years. India exported goods worth $42.33 billion to the US in the last fiscal, up 5% from the previous year. The country’s merchandise imports from the US stood at $22.34 billion in FY17, up 2.6% from FY16.