File image: PM Modi and US President Donald Trump
The ongoing India-US trade tension is expected to be a major topic of discussion when the US Secretary of State Mike Pompeo visits India for talks with his Indian counterpart S Jaishankar early next week, a senior government official told Moneycontrol.
The Commerce Ministry is also anticipating that the US might push for a bilateral agreement after India slapped retaliatory tariffs on a few American products.
"I don't think we can call it a trade war. But the US might push for some kind of a trade pact and we are preparing for such an eventuality," the official said.
India-US trade relation is under stress after Washington ended preferential benefits for Indian exports worth $6.35 billion. In reply, New Delhi raised tariffs on 28 American products on Sunday - a year after announcing the levy.
The trade tension is expected to be discussed as well between US President Donald Trump and Prime Minister Narendra Modi at G20 summit on June 28-29 in Osaka.
"We are anticipating that the US night push for some concessions on intellectual property rights and e-commerce," the official said.
The US has tried to push India to drop Section 3 (d) in the Indian Patents Act that denies patents on items that are not significantly different from their older versions.
India does not permit e-commerce companies with foreign direct investment (FDI) from selling products via firms in which they have an equity interest. It also bars them from making deals with sellers to sell exclusively on their platforms.
This has had a direct bearing on Amazon and Walmart-owned Flipkart.
Washington has also brought up its concerns on India's data localisation requirements in its draft e-commerce policy, restrictions on cross-border data flows, transfer of intellectual property and proprietary source code, and preferential treatment for domestic digital products.
The US has for some time now been keen on free trade agreement (FTA) with India. US envoy Kenneth Juster had called for an eventual FTA between the world’s two largest democracies early last year.
In 2005, there was pressure on India to seal a trade deal after the two nations signed the Civil Nuclear Agreement.
India's exports to the US amounted to $52.4 billion in FY19 while imports were worth $35.5 billion.