India and the US agreed to ensure greater market access in certain farm commodities after a gap of four years to provide a fresh impetus to bilateral trade. Both commerce and industry minister Piyush Goyal and US trade representative Katherine Tai, also agreed to pursue a social security totalisation agreement.
A totalisation agreement removes dual social security taxation. However, the US has remained non-committal on a complete restoration of the GSP (Generalised System of Preferences) benefits to India. Under GSP, India could ship out duty-free goods worth $6-6.5 billion a year (but the potential tariff forgone by the US was only $240 million in 2018).
Bilateral goods trade between the US and India is expected cross $100 billion for the first time in FY22, against about $81 billion in the last fiscal when the pandemic hit the supply chains.
Interestingly, both the sides agreed to further engage to find mutually-agreed solutions on outstanding disputes at the World Trade Organization (WTO), just days before a ministerial meeting of the global trade body is to commence (from November 30).
Both sides agreed to finalise market access facilitation for mangoes, pomegranates and pomegranate arils from India, and cherries and alfalfa hay for animal feed from the US. They also decided to resolve market access issues for Indian grapes and American pork and pork products.
The US offered to export ethanol to support India’s lofty goal of reaching 20% of ethanol blending with petrol by 2025. They also exchanged views on approaches to increase the utilization of renewable energy and other clean technologies to achieve net-zero emissions, including by aiming to mobilise finance and scale innovative clean technologies as agreed in the India–US Climate and Clean Energy Agenda 2030 Partnership, according to the joint statement.