Resolving trade dispute crucial for larger Indo-US strategic relationship

Prime Minister Narendra Modi and US President Donald Trump

Trade talks between the U.S. and India, which resumed on Thursday after a brief lull, will focus on tariffs, data localisation and e-commerce rules as officials from both sides try to iron out differences in the areas over the two-day meeting, a government official has said.

US President Donald Trump has been putting pressure on India to do more to open its markets, saying this week again on Twitter its high tariffs were "unacceptable".

Amid rising trade tensions, India and U.S. officials met in New Delhi for the first time on Friday since the U.S. withdrew duty-free benefits to Indian exporters, while India imposed retaliatory tariffs on imports from US.

The Indian delegation was led by Mr Sanjay Chadha, additional secretary, department of commerce, included senior officials from other ministries.

The two-day meeting will set the tone for a meeting between US Trade Representative Robert Lighthizer and union commerce minister Suresh Prabhu. "No longer acceptable!" Trump tweeted on Tuesday. While India had on Thursday said they were approaching the talks with a mindset of "problem solving", it seems that the protectionist approach by both sides prevented any results.

India on Thursday said that it seeks very constructive and positive engagement with the United States counterparts.

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"The meeting was cordial and aimed at providing a new impetus to bilateral trade and commercial ties, in line with the mandate given by Prime Minister Narendra Modi and US President Donald Trump during their meeting at Osaka, Japan on June 28, 2019".

"I think it is important to keep in mind when we engage on this issue that the trajectory of the relationship remains positive, we have to keep in mind the bigger picture and within that big picture try to address all the issues which are on the table", he had added.

Walmart told the USA government privately in January that India's new investment rules for e-commerce were regressive and had the potential to hurt trade ties, Reuters reported on Thursday.

In a recent meeting, Foreign Minister Subrahmanyam Jaishankar told trade ministry officials that "Trump is clearly preparing for a larger game, a larger opening", according to one of the officials aware of the discussions.

Top sources told CNBC-TV18 that tariffs, ecommerce and data localisation issues are the main issues that would be discussed. India slapped tariffs on U.S almonds and 27 other U.S products. The US wants greater market access for its dairy products and cut in customs duties in information and communications technology products. India has asked for those privileges, effectively zero tariffs on a range of Indian products entering the United States, to be reinstated. The American companies have also raised concerns over price cap on certain medical devices by India.

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