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February 14, 2020

Could A Trade Deal With India Be on The Horizon?

 |  By: Anna-Lisa Laca

President Donald Trump and his administration have been vocal about a potential trade deal with India. Could a deal be on the horizon? Reuters reports India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal when President Trump visits the counter later this month. 

India has traditionally restricted U.S. dairy imports, but Reuters says Indian Prime Minister Narendra Modi is “trying to pull all the stops for the U.S. president's Feb. 24-25 visit” with hopes to repair the relationship between the world’s two largest democracies. 

India has offered to allow imports of U.S. chicken legs, turkey and produce such as blueberries and cherries, Indian government sources told Reuters. They also offered to cut tariffs on chicken legs from 100% to 25%. 

Indian government sources are also offering access to India’s dairy market with a 5% tariff. Additionally, dairy imports would need to be accompanied by a certificate that they were not derived from animals fed feedstuffs derived from ruminants. 

Dairy industry analysts remain skeptical. 

"We're always looking for market access, but in terms of India, as of today I'm not aware of any real progress going on," said Michael Dykes, president of the International Dairy Foods Association and a member of USTR's agricultural trade policy advisory committee.

The U.S. dairy industry was looking for access in viable commercial quantities, he added.

Would market access to India be a home run for the dairy industry? Jaime Castaneda, senior vice president of trade policy at U.S. Dairy Export Council, is doubtful.

“I can tell you that I know that the president is actually going to India. I can tell you that we know that the U.S. government has been in negotiations with India. But we don't know whether there's going to be any agreement with India,” he said. “India is a very difficult country but, of course, if the president does end up going to India, I don't think he's gonna go to India and come back with empty hands.”

Similarly, U.S. Ambassador Gregg Doud isn’t confident the deal would be a home run for the dairy industry either. 

“It's an enormous opportunity, but it's really complicated and different. And I can't say anything more than that right now, because we're negotiating,” Doud said.

Still, Castaneda said he wouldn’t characterize it as a market with the same importance as other markets. 

“I have met a lot of protectionist industries and protectionist countries in the world. I don't think I've never met anybody as protectionist as the Indians,” he explained. “So, this is why, even though the market is big and the opportunities could be large, and we could actually benefit significantly, I'm always going to be lukewarm about the expectations that I'm going to put forward.”

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