HEADLINES:
June 19 2019
U.S. to discuss trade, e-com rules with India
14 February 2019

Review of India’s eligibility for GSP may figure in talks between Ambassador Juster, Minister Prabhu

U.S. Ambassador Kenneth I. Juster will lead a delegation of officials to hold talks with Union Commerce Minister Suresh Prabhu on Thursday to resolve several sore trade points, including the concerns of American CEOs regarding doing business in India and bilateral trade imbalance.

The status of the review of India’s eligibility for the Generalised System of Preferences (GSP) is also likely to come up in the light of recent developments where the U.S. has again threatened to withdraw the export exemptions for India. U.S. Commerce Secretary Wilbur Ross will participate via video conferencing. Other issues that had particularly incensed American businesses are India’s new data localisation rules that force foreign companies to store Indians’ data within the country, and rules amending FDI rules in e-commerce that had hurt American giants like Amazon and Walmart. These are likely to be high on the agenda of Thursday’s Indo-U.S. CEO Forum.

Higher import tariffs

Trade tensions between the two countries rose last March when U.S. President Donald Trump notified the imposition of higher import tariffs on steel and aluminium, which affected several countries, including India. In retaliation, India announced counter-tariffs on 29 American goods, worth about $235 million, but has delayed implementing them in the hope of resolving the matter.

President Trump’s order was followed closely by the office of the U.S. Trade Representative (USTR) announcing that it was putting India’s eligibility for GSP — under which India is allowed duty-free exports to the U.S. for about 2,000 product lines — under review. While the move was protested by the Indian government and industry chambers alike, the review was still in progress.

“GSP boosts the competitiveness of American manufacturers by lowering their costs,” Sanjay Budhia, chairman, CII National Committee on EXIM, said. “Approximately two-thirds of U.S. imports under GSP are raw materials, components, or machinery and equipment used by U.S. companies to manufacture goods in the U.S. for domestic consumption or for export. These benefits are real.”

The USTR received applications to review India’s GSP eligibility from the National Milk Producers Federation and the US Dairy Export Council, and the another from the Advanced Medical Technology Association.

“As described in the India Chapter of the 2018 National Trade Estimate Report on Foreign Trade Barriers, India has implemented a wide array of trade barriers that create serious negative effects on U.S. commerce,” the USTR notice document said. Mr. Ross will also try to resolve trade imbalance between India and the U.S., a sore point raised by President Trump. India's exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were $26.7 billion. He had earlier raised the issue of unequal trade and tariffs between the two countries, especially India’s seemingly high import tariffs on Harley Davidson motorcycles.

 

 

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