India may rethink tariff if US cuts sops

Emphasising that the United States must make "real and effective" cuts in its farm subsidies, the country today said it was willing to be flexible on the issue of bound tariffs on industrial goods to break the deadlock in trade negotiations at the World Trade Organisation.

New Delhi has, however, made clear that it is not willing to make concessions that will affect adversely its farmers and the rural economy.

"We have negotiating space but any imports which will displace our farmers are out of the question," Commerce and Industry Minister Kamal Nath told reporters on the eve of his departure to Geneva to attend the G-5 meeting.

Nath said the structural flaws in agriculture on account of the huge subsidies given by developed countries like the United States and the European Union must be corrected.

On whether India was willing to accept two co-efficients, one for developed countries and another for developing countries in order to determine the amount of duty cuts on industrial goods, Nath said, "It is important for us to arrive at what the reduction will be. Once we decide the percentage of cuts, we can fit it into any formula, be it the German or the French."

Trade ministers of the G-5, which comprises the United States, European Union, India, Brazil and Japan, will meet in Geneva from July 22-24 to try and resolve the present impasse in trade negotiations.

Nath said that after attending the G-8 meeting even Prime Minister Manmohan Singh was keen to have another round of trade talks to try and break the deadlock.

While most WTO countries have agreed to make the G-20's proposals in agriculture, the base for discussing duty cuts in the sector, the United States has been insisting on increased market access in exchange for deeper cuts in subsidies offered to its farmers.