In a big relief to India, US has decided to delay and hold their position on all important issues till the fate of India’s new government gets decided. As per reports, US won’t immediately escalate trade-related issues till May end when the new government of India will be decided.
At the Trade Winds business forum, US commerce secretary Wilbur Ross also dropped a hint in this regards when he said that the two sides will maintain their positions. This was in return for a question regarding trade imbalances between the two countries.
“We applaud India’s commitment to addressing some of these barriers once the government is reformed, probably starting in the month of June,” he said.
India is right now undergoing its elections wherein over 7 phases, people of India will elect their new government.
As far as the trade imbalance is concerned, India’s prime issues are US’s decision to enforce sanctions on oil imports from Iran, who is our main energy supplier and the withdrawal of benefits under the Generalized System of Preferences (GSP) programme.
Washington is also concerned as it puts foreign companies at a disadvantage and the tariff and non-tariff barriers and regulations are hampering others. Other issues that are brewing between the two powers are Indian price caps on imported US medical devices and e-commerce rules that bar companies from selling products through firms in which they have an equity interest.
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India is the third largest economy and is poised to become the largest consumer market by 2030. Yet, for US, India is the 13th largest export market. This is due to overly restrictive market access barriers.
On the other hand, the US is India’s largest export market, accounting for about 20% of the total. This is the trade imbalance that needs to be ironed out, according to both the countries.
Ross also referred to Trump’s vision of a free, open and prosperous Indo-Pacific region and said India is key to the US administration’s approach to the region.