Hours Before WTO Deadline, Kerry Raises Stalled Deal but India Stands Firm

"Our stand remains the same," Commerce Minister Nirmala Sitharaman told reporters after meeting US Secretary of Commerce Penny Pritzker, who has already expressed disappointment over India's stand at the ongoing negotiations for easing customs rule for free movement of goods.

Mr Kerry met Mr Jaitley as part of a strategic dialogue that has been overshadowed by India's refusal to sign the trade facilitation deal which the WTO says could add $1 trillion to the global economy.

New Delhi says the deal must be accompanied by a parallel agreement allowing developing countries more freedom to subsidise and stockpile food grains.

The deal must be signed in Geneva tonight, and India's ultimatum has revived doubts about the future of the WTO as a negotiating body.

In an article published in a newspaper hours before he arrived in Delhi, Mr Kerry wrote, "India must decide where it fits in the global trading system. Its commitment to a rules-based trading order and its willingness to fulfil its obligations will be a key indication."

Mr Kerry's visit is America's first high profile engagement with the government of Prime Minister Narendra Modi that took power in May promising to put India back on a high growth path. Critics say that so far, the new administration has moved slowly on reforms, and its hardening stance at the WTO suggests a more nationalist response on key issues than the previous government headed by Dr Manmohan Singh.

India and the United States have already clashed at the WTO, with Washington saying Delhi's 11th hour resistance could kill a deal that could create 21 million jobs. Mr Kerry said India stood to gain by creating a level-playing field instead of erecting trade barriers.

While diplomats in Geneva said they were pessimistic that Mr Kerry's trip could provide a breakthrough, US Trade Representative Michael Froman urged holdouts to come back to the table.

Several diplomats said New Delhi's stance could derail the whole process of world trade liberalisation, leading some WTO nations to discuss informally an idea of excluding India from the agreement.

Disputes over protectionism and intellectual property rights have soured the business climate and India has remained cautious about committing to US strategic designs in the region.