Why in news?
India is among the 16 target countries in a review of trade ties that President Donald Trump was scheduled to order.
What is the present scenario of India-US trade?
- India is the ninth biggest trading partner of the U.S. and had a trade surplus of around $26 billion with the U.S in goods trade alone last year.
- Of its top 20 trading partners, the U.S. has a surplus with only five. With China, the U.S. had a deficit of $347 billion in 2016.
- Mr. Trump has named China, Mexico and Japan repeatedly for allegedly unfair trade practices.
- He has never named India, but the 100% duty that India imposes on high-power motorcycles was mentioned in his first speech the U.S. Congress recently.
What the President’s order says?
- A “country-by-country, product-by-product” report will be prepared in 90 days that would form the basis of further measures that the Trump administration would take to reduce the country’s trade deficit.
- The report will identify every form of trade abuse and every non-reciprocal practice that now contributes to the U.S. trade deficit.
- The review will be to assess whether deficit is being caused by cheating, specific trade agreements, lax enforcement or World Trade Organization rules.
- The trade review will touch upon a litany of American concerns about trade with India — inadequate protection of intellectual property, state subsidies and tariff and non-tariff barriers.
What are the highlights of National Trade Estimate Report?
- The U.S Trade Representative recently released its annual National Trade Estimate Report on Foreign Trade Barriers that highlights foreign barriers to U.S. exports.
- The report lists a range of trade restrictions by India such as an existing ban on animal-tested cosmetics and restrictions on dairy products and alcohol.
- It also accuses India of being opaque in its non-tariff regulations, and lists export subsidy programmes in several sectors as a matter of concern.
- India and the U.S. must trade more in energy, generic pharma and defence if the intention is to bring down trade deficit.
Source: The Hindu
