US commerce secretary to raise India's e-commerce rules in talks

US commerce secretary Wilbur Ross said today (6) he planned to discuss India's new e-commerce rules that could have an impact on operations of firms such as Amazon and Walmart with his Indian counterpart on Monday (6).

Ross is visiting New Delhi at a time when India and the US are locked in disputes over tariffs, price caps India has imposed on imported US medical devices and overrules banning companies from selling products via firms in which they have an equity interest.

India also prohibits companies from making deals with sellers to sell exclusively on their platforms, rules which could affect investment plans of foreign firms in India's fast-growing market set to touch $200 billion (£153bn) by 2027.

Ross told reporters he would discuss e-commerce with India's commerce minister, Suresh Prabhu.

Two trade ministry sources said India was hoping for a breakthrough in the talks.

"We are negotiating and we want there to be some breakthrough because India has stakes and they are one of the biggest partners and this is an opportunity to de-escalate tensions," one of the sources said.

In March, the US president Donald Trump announced plans to end preferential trade treatment for India that allows duty-free entry for up to $5.6bn worth of its exports to the US.

India is the world's biggest beneficiary of that trade concession, called the Generalised System of Preferences (GSP), and its withdrawal would be the strongest punitive action against the country since Trump took office in 2017.

India wants the US to review its decision on GSP and also hopes the it will defer its decision to withdraw trade privileges until India's general elections are over on May 19, one of the sources said.

Political and security ties between India and the US have developed but trade has become a problem.

Indian officials said both sides are likely to emphasise strategic ties and try to manage trade differences.

"The messaging is a reassurance that the US thinks of India as a strategic partner and the relationship cannot be coloured by differences on trade," one of the sources said.

Total US trade with India stood at $87.5bn in 2018, with the deficit at $21.3bn.

India has held off implementation of new tariffs on the US goods after Washington refused to give it an exemption on higher steel duties.

(Reuters)