India and the US are inching closer towards a limited trade deal after two years of negotiations that would likely offer tariff concessions to US farm products among others in exchange for trade concessions to India.

A potential agreement would come at a time when India is looking for greater trade and strategic ties with the West, including the European Union and UK, amid the escalation of border tensions with China. It could also burnish US President Donald Trump’s credentials ahead of the November polls.

Continuing the flurry of high-level meetings, trade minister Piyush Goyal held talks with US commerce secretary Wilbur Ross on Wednesday. Last week, Goyal spoke to US Trade Representative Robert Lighthizer to tie the loose ends of the long-pending deal.

“The principals also conversed on the ongoing India-USA trade discussions and appreciated the substantial progress made by both sides on most of the outstanding issues. There was a desire expressed to conclude this initial limited trade package and recognizing the complementarities of the India-USA bilateral trade, (both sides) discussed the possibility of an FTA,” India’s commerce ministry said in a statement.

A limited trade package under negotiations since 2018 is expected to cover tariff-related concessions for US farm products, especially dairy items, pricing of pharmaceutical products such as stents and knee implants, and information and communication technology products. In return, Washington is expected to partially restore benefits accorded to Indian exporters under the Generalized System of Preferences (GSP), which was terminated by Trump from 5 June last year. Both sides may also remove the tit-for-tat tariff hikes after the US raised steel and aluminium tariffs on grounds of national security.

Speaking at the India-US CEO Forum on Tuesday, Goyal said bilateral ties between India and the US have acquired “extraordinary momentum” driven by strong shared interests in promoting global stability, security and economic prosperity.

He also flagged the long-pending proposal for a Totalization Agreement to secure the social security contributions of professionals from both sides, which had been also discussed during the visit of President Trump to India in February.

“While appreciating India’s concern, Secretary Ross mentioned that the statutory requirements of the US have to be fulfilled by India in this regard. He offered to arrange a meeting between US Social Security administrator and concerned Indian officials to discuss and find a possible solution,” the commerce ministry said.

While expressing happiness on the US move to rescind the earlier decision to revoke foreign student visas whose courses have moved online due to the unfolding coronavirus pandemic, the Indian side also raised the suspension of H-1B visa for skilled professionals. “The US side understood India’s viewpoint and said it is open to examine it,” a commerce ministry official said on condition of anonymity.

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