‘India has offered new package to US to fix trade irritants’: Suresh Prabhu
India has offered a conciliatory package to defuse trade tensions with Washington sparked by a decision by President Donald Trump last month to deny India preferential market access to the US, minister of commerce and industry Suresh Prabhu said on Wednesday.
India has also significantly narrowed its trade deficit with China by reducing Chinese imports by about $13 billion, and is set to post robust growth in overseas shipments, which are set to reach $540 billion, Prabhu said in an interview with Hindustan Times.
According to Prabhu, the Indian offer of a conciliatory trade package is currently being examined by the Trump administration.
In March, Washington announced that it will end preferential trade treatment for thousands of Indian products guaranteed under the Generalised System of Preferences (GSP), which promote trades with developing countries by giving duty-free entry for their exports.The US action, in retaliation for the high tariffs that Trump says India levies on its imports, triggered a 60-day countdown before the move takes effect.
Notwithstanding about $170-180 million net impact of the US Trade Representative’s (USTR) action, India is keen to address the concerns of the US.
“We have given a package to [the] US, which will actually address many of the issues in proper manner,” Prabhu said in the interview.
Prabhu said the major US trade concerns pertained to its exports of medical devices, dairy products, mobile phones and agricultural items such as almonds, but didn’t spell out exactly what India had offered the US in the conciliatory trade package.
For instance, Prabhu said the Modi government had, in line with its commitment to providing affordable medical treatment, capped the prices of some medical devices, including stents.
“As a result of that, medical devices companies in the US -- they went to the commerce department and USTR, saying that this is an unfair trade practice in India,” the minister said.
Another concern on the trade front has been the ballooning Indian deficit in trade with China. Thanks to conscious policy decisions taken by India to reduce imports from the neighbouring Asian giant, the deficit is likely to have declined to around $50 billion in the financial year that ended on March 31, according to Prabhu. The significant development is expected to be captured in official trade data, which is expected to be released soon.
After becoming the commerce minister in March last year, Prabhu said that New Delhi would chalk out a strategy to balance trade with China. As a result, India is now exporting several items including, rice, rapeseed, soybean, sugar and pharmaceuticals to China. In 2018-19, India exported rice to China for the first time in 20 years,Prabhu said. According to an official statement released on March 26, 2018, Prabhu, when he met Chinese minister of commerce Zhong Shan in New Delhi, had sought greater market access for agricultural products like rapeseed, soyabean, basmati and non-basmati rice, fruits, vegetables, sugar and pharmaceutical products.
The Chinese minister had “welcomed Indian investment in China and promised to address the trade deficit between the two countries”, said the statement.
Prabhu said India’s overall exports are expected to be robust at around $540 billion, which will include both merchandise and services. India’s overall exports in April-February 2018-19 were estimated at $483.98 billion last month, an increase of 8.73% over the same period last year.
Associated Chambers of Commerce and Industry of India secretary general Uday Kumar Varma is upbeat that India’s trade growth will improve despite a global downturn. “Commerce minister is steering the trade policy well. He is protecting Indian industries’ interests while negotiating with both China and US. As he says, India will post better trade growth this year,” he said.
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