India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during U.S. President Donald Trump’s first official visit to the country this month, people familiar with the protracted talks say.
India, the world’s largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80 million rural households involved in the industry.
But Prime Minister Narendra Modi is trying to pull all the stops for the U.S. president’s Feb. 24-25 visit, aimed at rebuilding bonds between the world’s largest democracies.
In 2019, Trump suspended India’s special trade designation that dated back to 1970s, after Modi put price caps on medical devices, such as cardiac stents and knee implants, and introduced new data localization requirements and e-commerce restrictions.
Trump’s trip to India has raised hopes that he would restore some of the country’s U.S. trade preferences, in exchange for tariff reductions and other concessions.
The United States is India’s second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.
India has offered to allow imports of U.S. chicken legs, turkey and produce such as blueberries and cherries, Indian government sources said, and has offered to cut tariffs on chicken legs from 100% to 25%. U.S. negotiators want that tariff cut to 10%.
The Modi government is also offering to allow some access to India’s dairy market, but with a 5% tariff and quotas, the sources said. But dairy imports would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.
New Delhi has also offered to lower its 50% tariffs on very large motorcycles made by Harley-Davidson, a tax that was a particular irritant for Trump, who has labelled India the “tariff king.” The change would be largely symbolic because few such motorcycles are sold in India.
Trump will be feted in Modi’s home state of Gujarat, then hold talks in New Delhi and attend a reception that the hosts have promised will be bigger than the one organised for former president Barack Obama in 2015.