India-US Bilateral Trade Agreement (BTA) Talks
The ongoing negotiations for the first phase of the India-US bilateral trade agreement are focusing on two main areas: liberalization of India's digital services and tariff reduction on goods.
Key Discussion Points
- Digital Services:
- One contentious issue is India's data localisation norms that require data to be stored within India, as per the draft rules of the Digital Personal Data Protection (DPDP) Act.
- This requirement is opposed by American companies due to potential business uncertainties.
- E-commerce and Customs Duties:
- The US is advocating for a permanent moratorium on e-commerce to prevent India from imposing customs duties on electronic transmissions.
- This agenda aligns with broader discussions at the WTO, where developing countries like India have argued that such a moratorium affects their revenue collections.
- Skilled Professionals Movement:
- India is prioritizing the swift movement of skilled professionals to the US, proposing a cap on the number of H1B visa holders to reduce uncertainty.
Recent Developments
- India recently removed the 6% equalization levy on online advertising services offered by non-resident entities, benefiting companies like Google, Meta, and X.
- This move is seen as a gesture to address US concerns and precedes the US's potential implementation of reciprocal tariffs.
Tariff Reduction Demands
- The US has been vocal about its desire for tariff cuts in sectors such as agriculture, automobiles, and alcohol.
- Conversely, India is negotiating for reduced tariffs in its labor-intensive sectors, including textiles and leather.
Summary of Trade Talks
- Negotiations are led by a team headed by Assistant USTR Brendan Lynch.
- The aim is to finalize the trade deal's contours by the month's end, with an ambitious target to conclude by fall.
