{"id":52500,"date":"2019-09-24T19:00:43","date_gmt":"2019-09-24T13:30:43","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?p=52500"},"modified":"2019-09-24T15:57:57","modified_gmt":"2019-09-24T10:27:57","slug":"7-pm-india-and-the-us-need-to-address-the-vexed-issues-in-trade-24th-september-2019","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/7-pm-india-and-the-us-need-to-address-the-vexed-issues-in-trade-24th-september-2019\/","title":{"rendered":"7 PM | India and the US need to address the vexed issues in trade | 24th September, 2019"},"content":{"rendered":"\n<p><strong>Context:\n<\/strong>Trade\nissues between India and US.<\/p>\n\n\n\n<p><strong>More\nin News:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>PM Narendra Modi is on a week-long visit\nin the United States from September 21 to 27. This will be PM Modi\u2019s sixth\nvisit to the US.<\/li><li>On September 22, PM\nModi attended the &#8220;Howdy, Modi&#8221; event at NRG stadium in Houston.\nPrime Minister Narendra Modi and US President Donald Trump met at an\nIndian-American rally in Houston, Texas, as their nations negotiate for easing\ntrade tensions.<strong><\/strong><\/li><\/ul>\n\n\n\n<p><strong>India\n\u2013 US Trade Relations:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The US is now India\u2019s second largest\ntrading partner and largest export destination, with India having a small trade\nsurplus of around $20 billion.<\/li><li>The US is also the largest provider of\nforeign direct investment (FDI) \u2014 around $45 billion \u2014 to India, with India\ninvesting close to $10 billion in the US.&nbsp;<\/li><li>Bilateral trade has been steadily\nincreasing. In 2018, it reached $142.1bn,&nbsp;with India having a surplus of\n$24.2bn, according to official US data.<\/li><li>India mostly exports gems, pharmaceuticals,\nmachinery, mineral fuels and vehicles to the US.<\/li><li>Apart from agricultural produce, the US\nexports to India precious metals and stones, mineral fuels, aircraft,\nmachinery, and optical and medical instruments.<\/li><\/ul>\n\n\n\n<p><strong>India-US\nTrade issues:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>India described as the &#8220;king&#8221; of tariffs:<\/strong><ul><li>Despite growing political and strategic ties, there&#8217;s been tension over trade issues. President Trump says India&#8217;s tariffs &#8211; taxes on imports &#8211; are &#8220;unacceptable,&#8221; and has described India as the &#8220;king&#8221; of tariffs.<\/li><li>India&#8217;s average tariff rate in 2018 was 17.1% &#8211; that is significantly higher than the US, Japan and the EU, all of whom had rates of between 3.4% and 5.2%.<\/li><li>However India comes out better on trade-weighted average tariff. In 2017, India&#8217;s trade-weighted average tariff was 11.7%, Brazil&#8217;s was 10% and South Korea&#8217;s was 8.1%. <\/li><li>India is not alone in charging high duties &#8211; for example, Japan, South Korea and Australia all have high tariffs on specific imports. The US imposes a 350% tariff on certain types of tobacco<\/li><\/ul><\/li><li><strong>GSP Withdrawal citing market access issues:<\/strong><ul><li>The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.<\/li><li>In June, President Trump terminated India&#8217;s designation as a beneficiary developing nation under the key GSP trade programme after determining that New Delhi has not assured the US that it will provide &#8220;equitable and reasonable access&#8221; to its markets.<\/li><li><strong>Steel and Aluminium tariff issue:<\/strong>\u00a0The US increased tariff on Steel and Aluminium imports from 12 countries including India. Government approached the WTO\u2019s Dispute Settlement Body against the US move. Simultaneously, trade officials are taking the issue to the US Trade Representative and other higher platforms.\u00a0<\/li><li><strong>Use of commercial policy by India:\u00a0<\/strong>as a response to the US tariff on Steel and Aluminium, Commerce Ministry on June 20th\u00a0notified tariff hike on 29 US products, including almonds, apples and phosphoric acid etc. (worth $10 bn) in retaliation to the steel and aluminium tariff hikes by the US.\u00a0At the same time, India reduced tariff on selected imports from India including that on few categories of bikes to defuse the trade tension.<\/li><\/ul><\/li><li><strong>Visa restrictions by the US:<\/strong>\u00a0Perhaps the most devastating US step on India is the Trump administration\u2019s decision to put curb on H1 B visas.<ul><li>The number of visas to be issued under H1B was reduced.<\/li><li>Visa fees doubled for H1B.<\/li><li>Visa eligibility in terms of annual income raised; thereby reducing opportunities for India\u2019s skilled Labour.<\/li><li>H1 B visas will be issued for single projects. After the completion of the project, the person should return without looking for any other job there.<\/li><li>US says that two-year degree is not enough. Rather a four-year degree is a must of the issue of H 1B visas.<\/li><\/ul><\/li><\/ul>\n\n\n\n<p>Visa\nrestrictions will hurt the operations of Indian IT firms in the US.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Export\nSubsidy issue:<\/strong>&nbsp;US raises objections at the WTO to the export\nincentives given by India. At the WTO, the US argued that India doesn\u2019t qualify\nto provide export incentives allowable for low income developing countries.\nIndia\u2019s GNI per capita income crossed $1000 for three consecutive years and\nhence the country is not eligible to provide export subsidies. The US objected\nfive export incentives given by India.<\/li><li><strong>Developing\ncountry treatment<\/strong>:&nbsp;At the Buenos Aires Ministerial\nConference of the WTO, the US argued that countries like China and India\ndoesn\u2019t qualify for the Special and Differential Treatment benefits given for\ndeveloping countries. India strongly objected to the US version.<\/li><li><strong>Intellectual\nProperty Rights:&nbsp;<\/strong>India is continuously listed under the\npriority watch list in the US Intellectual Property documents that is prepared\nunder the infamous Special 301 law. India is placed along with China and ten\nother countries. According to the US, countries in the list will be the subject\nof particularly intense bilateral engagement in future.<\/li><li><strong>India\u2019s e-commerce<\/strong> <strong>restrictions<\/strong> are\nanother source of irritation. Companies like Amazon and Walmart have been hurt,\nnot to mention millions of Indian consumers beginning to get their benefits, of\nan assured quality, delivered at reasonable prices. India should encourage more\ncompetition in this area rather than impose restrictions on global ecommerce\ncompanies that also provide avenues for Indian companies to enter global value\nchains.<\/li><\/ul>\n\n\n\n<p><strong>Way\nForward: <\/strong>A\nnew trade deal with US is need of the hour. It will make it a lot easier to deal with Trump\u2019s administration\non a range of issues including terrorism, Kashmir and the unfolding crisis in\nAfghanistan.&nbsp;A new trade agreement must be about preparing India for\nprofound changes in the global economic order, buffeted by Trump\u2019s politics as\nwell as the unfolding technological disruption.&nbsp;Getting India\u2019s most\nimportant trade relationship right in the near term and charting a bold course\nfor a mutually beneficial commercial partnership with the US over the long term\nare urgent and worthy goals in themselves.<\/p>\n\n\n\n<p><strong>Source:\n<\/strong><a href=\"https:\/\/indianexpress.com\/article\/opinion\/columns\/narendra-modi-donald-trump-unga-india-us-relations-6022281\/\">https:\/\/indianexpress.com\/article\/opinion\/columns\/narendra-modi-donald-trump-unga-india-us-relations-6022281\/<\/a><strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Trade issues between India and US. More in News: PM Narendra Modi is on a week-long visit in the United States from September 21 to 27. This will be PM Modi\u2019s sixth visit to the US. On September 22, PM Modi attended the &#8220;Howdy, Modi&#8221; event at NRG stadium in Houston. Prime Minister Narendra&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/7-pm-india-and-the-us-need-to-address-the-vexed-issues-in-trade-24th-september-2019\/\">Continue reading <span class=\"screen-reader-text\">7 PM | India and the US need to address the vexed issues in trade | 24th September, 2019<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130,9],"tags":[],"class_list":["post-52500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","category-public","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2019\/07\/7-PM.png?fit=1000%2C500&ssl=1","views":{"total":18,"cached_at":""},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/52500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=52500"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/52500\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49370"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=52500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=52500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=52500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}