Indian and USA trade negotiators will meet on Friday, with little sign of a compromise on a series of protectionist measures taken by the two governments in recent months that have strained ties between the strategic partners.
The officials are meeting on the directions of PM Modi and President Trump.
US President Donald Trump has been putting pressure on India to do more to open its markets, saying this week again on Twitter its high tariffs were "unacceptable". While collaboration on 5G is not on the agenda but officials do not rule out a discussion on the issue. "Our approach is to engage with them very constructively, in a very positive manner", ministry of external affairs spokesperson Raveesh Kumar said on Thursday while the two sides met for informal talks to break the logjam.
A limited trade pact being worked out by India-US before the general elections, which included all three issues, got derailed after Washington made a decision to withdraw a scheme offering duty-free entry to over 3,000 products from India early June as soon as the new government was sworn in.
A delegation led by assistant United States trade representative (AUSTR) for South and Central Asia, Christopher Wilson, will meet Indian officials to try to re-start negotiations on tit-for-tat tariffs that were put on hold because of India's election.
"We have to keep in mind the bigger picture and within that bigger picture try to address all the issues which are on the table", Kumar told a briefing. During their meeting, USTR officials Christopher Wilson and Brendan Lynch will seek greater market access for American companies in order to bridge this trade deficit.
USTR would also seek a rollback of retaliatory tariffs imposed by India in response to the steel and aluminium tariffs.
Goods that the USA would seek greater market access include medical devices, dairy products, information and communication technology and Harley Davidson motorcycles.
While tariffs on a number of products such as smartphones, other IT and telecom items and Harley Davidson motorbikes are one of the focus issues for the United States for the talks, the other two are e-commerce rules and data localisation. The rules have forced the two American companies to rework their business strategies for India. The delegation is also likely to meet top officials at the IT ministry.
This was the first deliberations at official level on trade issues after the meeting of Prime Minister Narendra Modi with the US President in Japan, on the sidelines of the G20 summit in Osaka in June. A source privy to the ongoing discussions told CNBC-TV18 that it would be good for India to not look at this as a give and take meeting and India should be ready to grant concessions in the interest of the larger Indo-US strategic relationship.