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US’ first trade salvo to hit India’s export sops
Mar 09, 2017

Doing business with the Trump regime is not going to be easy for Delhi. If the H-1B visa row was not enough, serious troubles lie ahead on the trade and investment fronts, too.
 
The first indication of the trouble comes from the 2017 Trade Policy Agenda unveiled by the Trump administration. This document says ominously that the US will come down on India’s export subsidy programmes, and push for a stricter regime for intellectual property rights and patents.
 
The Trump team’s first report — 2017 Trade Policy Agenda and 2016 Annual Report of the President of the United States on the Trade Agreements Program — released by the Office of the United States Trade Representative categorically says that India’s “import restricting measures” result in “serious market access issues” for the US industry.
 
The document sees a general trend of tariff increases in India, which reflects an active pursuit of import substitution policies.
 
The March 2 document states that the US will engage India bilaterally to commit to a phase-out of its export subsidy programmes to the extent that they benefit the textile and apparel sector.
 
The new US government has asked India to announce the subsidies it offers to some of its agricultural produce in advance and not after a bumper harvest, diplomatic sources told BusinessLine.
 
The report also states that India’s trade and regulatory policies have “inhibited” the real growth potential of the bilateral trade that rose to $109 billion in 2015 from $4.8 billion in 1980. The Goods and Services Tax (GST) regime, it says, could provide an impetus to the creation of a common internal market that significantly lowers transaction costs.
 
While agreeing that India’s reforms on IPR are encouraging, the document says India’s new National Intellectual Property Rights Policy should protect US innovations.
 
On the WTO dispute between India and US poultry imports, the USTR said it will continue to press for suspending trade concessions given to India to the WTO Disputes Settlement Body, unless India allows import of American poultry products.
 
Surplus issue
 
According to sources, the US will “come down heavily” on India and other countries with which it has trade surplus. The US has registered its biggest monthly trade deficit in nearly five years of $48.5 billion.
 
Says Biswajit Dhar, a trade expert and a Professor at Jawaharlal Nehru University: This government will uphold American interest at any cost. The US has been already asking questions of India on some of its subsidy mechanism. (US President Donald) Trump is going to be a mercantilist and will not tolerate trade deficit.

 

    

The Hindu Business Line

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