India and US Agrees to Resolve key Trade Issues

What is the news?

India and the United States have agreed to work constructively to resolve key outstanding trade issues. Further, they also aim to take a comprehensive look at ways to expand the trade relationship.

What are the major India-US trade issues?

1. Generalised System of Preferences(GSP): In 2019, the US removed India from the GSP programme. This move adversely affected India’s exports to the US.
   • GSP: It is a preferential tariff system that allows concessional low/zero-tariff imports from developing countries.
2. Tariffs: High Tariffs on steel and aluminium imports from India.
3. Services: India has concerns over US visa policies. It has affected Indian nationals working in the United States
4. Agriculture: The Sanitary and phytosanitary (SPS) barriers in India limit US agricultural exports.
5. Forced Localisation: The US has opposed India’s “forced” localisation practices such as in-country data storage, domestic content, and domestic testing requirements.
6. E-commerce rules: The US has concerns regarding India’s e-commerce rules. As the new E-commerce rule imposed restrictions on how e-commerce platforms such as Amazon and Walmart owned Flipkart conduct business.
7. Intellectual Property(IP): India remains on the “Special 301” Priority Watch List based on concerns such as its treatment of patents, infringement rates and protection of trade secrets.

Organizations involved in India-US trade issues

There are two major trade organisations involved in trade-related matters in the US. They are,

Office of the United States Trade Representative (USTR)

1. Office of the United States Trade Representative(USTR) is a government agency. It is responsible for developing and recommending international trade policy to the US president.
2. Significance: The USTR directly negotiates trade agreements and resolving trade disputes with foreign governments. Apart from that they also participate in global trade policy organizations.
3. Powers: The US Trade Act gives the USTR broad authority to investigate and respond to a foreign country’s action. These actions include unfair or discriminatory practices as well as policies that negatively affect US commerce.
4. Reports: The USTR publishes few major annual reports. Such as
   • National Trade Estimate Report
   • The Special 301 Report – identifies trade barriers to United States companies and products.

India-US Trade Policy Forum:

• Setup in: India US Trade Policy Forum (TPF) was set up in 2005 and reconstituted in 2014.
• Purpose: It is primarily designed to work for expanding bilateral trade and investment between India and the US.
• Nodal Agencies: Minister of Commerce & Industry, Government of India, and Office of the US Trade Representative are the nodal agencies.
• Chaired by: The Commerce and Industry Minister on the Indian side and USTR on the US side co-chair it.

Source: The Hindu