Table of Contents
TRADE IMBALANCE
• In financial year 2017-18, India’s exports to the US were worth $47.9 billion. Imports from the US were worth $26.6 billion.
• This means trade balance being in India’s favour by $21.3 billion
• The trade deficit between India and the US dropped by almost 6% in 2017 compared to the previous year, the US Trade Representative (USTR)
WHAT IS INDIA DOING?
•Commerce and industry minister Suresh Prabhu has said that India’s purchases of commercial
aircraft and gas from the US will help bridge the trade deficit between the two countries. In 2017-18, India had a $21 billion trade surplus with the US.
BIG DEALS
In addition to the attack helicopters, the contract also includes fire control radars;
Hellfire Longbow missiles; stinger Block I-92H missiles; night vision sensors and inertial
navigation systems.
GENERALIZED SYSTEM OF PREFERENCES
(GSP)
• Established in 1974, GSP is the largest and oldest US trade preference program. It is aimed at providing opportunities for many of the world’s poorest and developing countries to use
trade to climb out of poverty and grow their economies.
• GSP provides duty-free access to about 3,500 Indian products to US markets. The Trump Administration has said it would review benefits given to Indian products under this scheme.
NOTES
India is the top beneficiary of this scheme under which some imports from selected developing
countries are allowed to enter the US at zero duty. In 2017, India exported $5.6 billion worth of
goods to the US under this scheme, which was more than a fifth of the total worth of Indian
exports to the US
REVIEW
India’s eligibility to continue under the scheme is being reviewed, and as a part of that process, the US trade representative’s office has scheduled a public hearing on June 19.
The two countries have also taken each other to WTO on several trade disputes, over market access, state subsidies and tariff. India has also threatened to levy retaliatory measures —
against steel and aluminium duties — worth around $165.56 million on a range of American goods.
HARLEY-DAVIDSON BIKES
The US has demanded duty cuts on bikes imported to India. India reduced duty from 75% to 50% in February this year. But the US wants zero duty on these bikes.
DAIRY INDUSTRY
•US-origin dairy products are banned in India on religious and cultural grounds. The reason is that these dairy products are mostly derived from cows which consume feed containing internal organs, blood meal, or tissues of ruminant origin while the cow in India is considered sacred and a herbivore
DAIRY INDUSTRY
The decision to prohibit US dairy products was taken in 2003 by the Vajpayee government. In 2015, after Prime Minister Narendra Modi assumed office, the US proposed to label with a ‘red dot’ to denote ‘non-vegetarian’ the dairy products derived from animal that haveconsumed feeds with ruminant proteins.
INDIA’S STAND
• On the cow issue, India has told the US that it would simply have to respect Indian religious and cultural sentiments on the issue. The overall trade deficit between India and the US has
reduced by about $1 billion this year while overall trade has grown by about $13 billion to a little over $125 billion for 2017-18.
• India has told the US that while the numbers might appear insignificant, it’s possibly the only country with a favourable trade balance with the US to show a downward trend.
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