February 14, 2020
India to open up its poultry and dairy market to the US in exchange for trade deal
Sources familiar with protracted talks said India will offer to partially open US imports of poultry and dairy to obtain a limited trade deal, when US President Donald Trump makes his first official visit to India in February 2020, reported Reuters.
India has restricted imports of dairy to protect is domestic industry. The country is the world's biggest milk producer, involving 80 million rural households.
However, India Prime Minister Narenda Modi aims to rebuild ties with the United States. Trump suspended India's special trade designation last year, dated backto the 1970s, after Modi imposed price caps on medical devices such as cardiac stents and knee implants. Modi also introduced data localisation requirements and restrictions on e-commerce.
There are hopes that Trump will restore trade preferences for tariff reductions and other concessions during his India trip.
After China, India is the United States second biggest trade partner with a record US$142.6 billion worth of bilateral goods and services in 2018. There is a US$23.2 billion goods trade deficit last year from the United States with India. India is the United States ninth biggest trade partner in goods.
Indian government sources said India will allow chicken legs, turkey and produce (blueberries and cherries) from the United States as part of its initial offer, in addition to a reduction from 100% to 25% for chicken legs. Negiotiators from the United States want the tariff dropped to 10%.
Sources also claim India will allow access to its dairy market, but with a 5% tariff and quotas. As part of this new access, the dairy importsd require certification that the cattle did not consume internal organs, blood meat or ruminant tissue as part of its feed.
The United States diary industry is doubtful if a viable deal is possible.
Michael Dykes, International Dairy Foods Association president and USTR's agricultural trade policy advisory committee member said they welcome market access to India but is unsure if there is any negotiation in progress.