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Trade talks stuck as U.S. presses oil, aircraft sales to India
Why is it in news?
- India and the United States are in a deadlock over contentious trade issues after the Donald Trump administration sought a formal commitment of additional purchases of $10 billion annually for the next three years, as part of a trade agreement under negotiation.
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- As both countries seek to reiterate their strategic partnership at the first 2+2 dialogue in New Delhi on Thursday, India is in the crosshairs of economic nationalists in the Trump administration.
- India has a surplus of $23 billion in trade with America, and the U.S. wants to wipe that off by forcing more imports by New Delhi, as part of a proposed trade agreement.
- American interlocutors took Indian officials by surprise last month with a draft agreement that committed additional imports by India, in civilian aircraft and natural gas.
- Officials of the U.S. Trade Representative (USTR) office also aggregated all existing market access issues with India in the negotiations that were initially planned on questions related to the American review of India’s Generalised System of Preferences (GSP) status and the steel and aluminium tariffs imposed by the Trump administration.
- With talks in stalemate, the U.S is proceeding with its review of India’s GSP status and India is moving ahead with retaliatory tariffs.
- Postponed twice, India’s retaliatory tariffs are now set to come into force on September 18.
- Pointing out that there has been a decrease in the deficit last year by about 5% or about $1.5 Bn, the first Indian official said. “..this is because US exports have increased by 10%.
- The USTR had launched a review of India’s GSP status, which allows preferential treatment to certain number of specified goods from beneficiary countries, following complaints from AdvaDed, or Advanced Medical Technology Association, a group of companies that exports medical devices to India and a dairy association.
Source
The Hindu