India

An upcoming shakeup of India's government could be the reset that is needed to reshape New Delhi's bilateral relationship with Washington, former officials from the Office of the U.S. Trade Representative and other agencies said on Monday.

As some lawmakers call on the administration to refrain from stripping India of its Generalized System of Preferences benefits in lieu of continued negotiations, the Office of the U.S. Trade Representative is considering initiating a Section 301 investigation into Indian trade practices, sources tell Inside U.S. Trade.

Sens. John Cornyn (R-TX) and Mark Warner (D-VA), co-chairs of the Senate India Caucus, on Friday called on the Trump administration to delay withdrawing India’s Generalized System of Preferences benefits.

Tariffs were slated to take effect on April 1 but are now slated to kick in on May 2.

While India-focused business groups are hoping the U.S. and India can come to an agreement before the U.S. terminates India’s benefits under the Generalized System of Preferences, analysts see little chance of a deal in the next 60 days.

Senate Finance Chairman Chuck Grassley (R-IA) on Tuesday said the administration decided to terminate India’s preferential trade treatment under the Generalized System of Preferences because New Delhi “hasn’t engaged enough” on market-access issues.

USTR's Special 301 subcommittee will hold a public hearing this week.

The Office of the U.S. Trade Representative could suspend India's Generalized System of Preferences benefits as soon as this month, further complicating prospects for a U.S.-India trade deal, according to reports and sources familiar with bilateral talks.

The U.S. and other World Trade Organization members this week raised numerous concerns with India' domestic support for agriculture, which India called flawed and untrue.