India, Feb. 11 -- India and the United States are squaring up for an exchange of blows on trade issues as space for a negotiated agreement is running out. The United States Trade Representative's Office (USTR) has run out of patience over a two-year dispute on medical device price controls, not least because New Delhi suddenly walked away from a negotiated settlement. The USTR now wants zero-tariff privileges for Indian textiles and other imports, under the World Trade Organization's (WTO) generalised system of preferences, be revoked. The most obvious Indian retaliation would be to impose tariffs on US steel and aluminium imports, something it has delayed despite the unilateral imposition of similar tariffs on India.

Neither of these ac...