‘Harley Davidson tariff to be among issues on table during Indo-U.S. talks’

The U.S. demand to reduce import tariffs on American Harley Davidson motorcycles will be among a series of trade disputes on the table and India will respond “appropriately” during the talks between Commerce Minister Suresh Prabhu and his counterpart, U.S. Trade Representative Robert Lighthizer, in Washington next week, Mr. Prabhu said here.

The talks come on the back of several measures taken by the U.S. on its trade policy that have affected India, including imposing 25% tariffs on steel and aluminum imports, restrictions on H1B visas and the cancellation of spouse visas as well as taking to the WTO disputes over Indian barriers on poultry and pork and price caps on medical devices.

Renewing GSP

U.S. officials, who met Commerce Ministry officials in Delhi in April, had not given any commitment on renewing India’s “eligibility” for the generalised system of preferences (GSP) that gives market access at low or zero duties for about 3,500 Indian products, including chemicals and textiles.

“[The] U.S. is a very important trading partner for India,” Mr. Prabhu told journalists, but admitted that the Trump administration had some new trade policies that were not favourable to India. “They are also not favourable to some of the U.S. allies and therefore, our bilateral trade relations must be seen in the larger context.”

Meanwhile, US President Trump’s public demand for zero tariffs for the Harley Davidsons in reciprocity for U.S. tariffs on Indian motorcycles could become a big point of contention during the talks as well.

“Every country has a right to demand the best deal for itself,” Mr. Prabhu replied to a question from this correspondent, adding that the U.S. has yet to convey demands on the Harley Davidson formally. “We will go for talks and understand their concerns and respond to them appropriately.” The Commerce Minister also rejected the U.S. allegations of violations of WTO guidelines on farm subsidies, saying that India “is not violating any of the WTO rules.”

India-U.S. bilateral trade in goods and services touched $126 billion last year, with a trade deficit in favour of India of about $28 billion. U.S. officials have often pointed out the vast difference in tariffs imposed, with the average U.S. import tariffs at about 4.5% and average Indian import tariffs at 13.4%.