US international policy under the current administration has been a wildly chaotic and unpredictable affair at best. With US President Donald Trump often taking impulsive decisions, the US’s trade partners have had to be constantly on their toes when it comes to knowing what to expect. India, too, is now facing its share of the same uncertainty, following a week of wildly fluctuating signals from American officials. US Secretary of State Mike Pompeo and President Trump have given widely conflicting signals this week on the US’s stance regarding trade relations with India. While the former has tried to assuage concerns and establish a cordial tone on his three-day visit to India this week, President Trump has adopted a combative tone, labeling India’s retaliatory tariffs following the US withdrawal of GSP benefits as “unacceptable”, ahead of the G20 Summit in Osaka, Japan this weekend. Unfortunately, there is no avoiding dealing with the mercurial US administration, as Indo-US trade is a key component of India’s international policy. So deciphering the American conundrum will be a key challenge for Indian policymakers, particularly given the Budget looming around the corner. Indian exporters can only hope that this resolution will happen sooner rather than later.
Trade Update
29th June
# 31
India’s “very high” tariffs on US goods are “unacceptable” and must be withdrawn, President Donald Trump demanded on 27th June ahead of his crucial meeting with Prime Minister Narendra Modi on the sidelines of the G-20 Summit in Japan which is likely to be dominated by trade frictions. President Trump, championing his ‘America First’ policy, has been a vocal critic of India for levying “tremendously high” duties on US products, and has described the country as a “tariff king”.
The Trump Administration wants Prime Minister Narendra Modi to lower trade barriers and embrace fair and reciprocal trade, the United States said hours after Secretary of State Mike Pompeo landed in New Delhi on a three-day visit. “There is enormous potential to grow our trade relationship and create the high-quality jobs that Prime Minister Modi wants if India lowers trade barriers and embraces fair and reciprocal trade,” said a State Department Fact Sheet.
India’s turmeric exports have touched US$236 million (around Rs. 1,632 crore) in 2018 and North America has emerged as the largest market for the commodity, according to the Trade Promotion Council of India (TPCI). “We are the global leaders in turmeric and North America is the largest regional market for the product, while Europe is the fastest growing market,” TPCI Chairman Mohit Singla said in a statement on 26th June.
US Secretary of State Mike Pompeo said in New Delhi on 26th June that Washington is prepared to work with New Delhi to sort out bilateral trade skirmishes and address India’s concerns on energy security in the backdrop of American sanctions against Iran. “Great friends are bound to have disagreements. The US has been clear that we want greater market access and trade-barrier removal. Today, I addressed these differences in the spirit of friendship. And the two of us will be able to see a good outcome,” Pompeo said at a press briefing following his bilateral meeting with Minister for External Affairs S Jaishankar.
India exported goods worth US$6.3 billion to the US in 2018 under their export incentive program, Parliament was informed on 21st June. The US has rolled back incentives under its Generalised System of Preferences (GSP) program from 5th June. “The total duty concessions accruing on account of the GSP were US$240 million in 2018 which was about 3.8% of the value of India’s exports to the US availing GSP benefits in 2018,” Commerce and Industry Minister Piyush Goyal said in a written reply to the Rajya Sabha.
- Jaishankar puts forth 5 points during diplomatic dinner, highlights India's role in global arena
- DPIIT to work with industry for exports promotion: Goyal
- Taking India’s exports to $1 trillion in 3 years: Here’s how to do it, suggests exporters’ body
- No anti-dumping duty imposed on Indian shrimp exports by US
- What solar manufacturers want from Budget 2019
Join 25K+ subscribers and stay updated with latest developments in International Trade & Exports.