India Ready to Make Concessions on Poultry, Dairy in Hopes of a Trade Deal

Posted on Thu, 02/13/2020 - 14:36

Ahead of President Donald Trump’s visit to India Feb. 24-25, the country has offered to partially open its poultry and dairy markets in hopes of securing a limited trade deal, according to people familiar with the trade talks cited by Reuters. Specifically, they say India offered to allow imports of U.S. chicken legs, turkey and some produce and to cut tariffs on chicken legs from 100% to 25%. The U.S. is reportedly pushing for 10% tariffs.

India’s government is also offering to open its dairy market via quotas and a 5% tariff on some products. Any dairy imports would require a certificate showing they are not derived from animals that have consumed feeds including internal organs, blood meal or tissues of ruminants.

In a largely symbolic move, India has reportedly agreed to cut 50% tariffs on large motorcycles produced by Harley Davidson, a tax that was specifically directed at Trump.

India hopes to rebuild bonds between the two democracies and that the U.S. would restore some of its trade preferences in exchange for its concession. The U.S. suspended India’s special trade designation last year after India put price caps on medical devices and introduced new data localization requirements and other ecommerce restrictions.

The U.S. is India’s second largest trade partner; India is the U.S.’s ninth largest trading partner in goods. The U.S. had a $23.2 billion trade deficit with the country Trump calls the “tariff king” in 2019.

India has an average tariff rate of 17% versus 3% for the U.S., according to data from the World Trade Organization.