Modi to ease dairy, chicken rules to seal trade deal with US

India, the world’s largest milk producer, has no need to import milk or other dairy products, and has traditionally restricted such imports to protect the livelihoods of 80 million rural households involved in the industry. 

But the Trump administration is challenging all hurdles to US exports across the world, more importantly to nations that nurture a trade surplus with America and Prime Minister Narendra Modi is trying to pull all stops to make the 24-25 February visit pleasant for the US President.

India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during US President Donald Trump's first official visit to the country, reports citing official sources said.

While Prime Minister Narendra Modi is focused on bonds between the world's largest democracies, it is far from clear whether India's offers will be enough to satisfy US Trade Representative Robert Lighthizer, who cancelled plans for a trip to India this week. 

Lighthizer was expected to visit India on 13 February and could still be visiting the country as part of. Trump’s entourage to finalise a trade package or a “mini-trade deal”.

The price caps on medical devices, such as cardiac stents and knee implants, new data localisation rules for online payment firms and e-commerce restrictions imposed last year had irked the US business and the Trump administration, which suspended India's special trade designation in retaliation.

Trump is not offering to restore some of US trade preferences to the country' in exchange for tariff reductions and other concessions.

The United States is India's second-largest trade partner after China, and bilateral goods and services trade climbed to a record $142.6 billion in 2018. The United States had a $23.2 billion goods trade deficit in 2019 with India, its 9th largest trading partner in goods.

India has offered to allow imports of US chicken legs, turkey and produce such as blueberries and cherries, Indian government sources said, and has offered to cut tariffs on chicken legs from 100 per cent to 25 per cent. US negotiators want that tariff cut to 10 per cent.

The Modi government is also offering to allow some access to India's dairy market, but with a 5 per cent tariff and quotas, reports said. However, dairy imports would need a certificate they are not derived from animals that have consumed feeds that include internal organs, blood meal or tissues of ruminants.

New Delhi has also offered to lower its 50 per cent tariffs on Harley-Davidson motorcycles, a tax that was a particular irritant for Trump.

Trump will be feted in Modi's home state of Gujarat, then hold talks in New Delhi and attend a reception that the hosts have promised will be bigger than the one organised for former president Barack Obama in 2015.