This is the Trump administration`s recent move to reduce U.S. trade deficits and offset what it sees as unfair trade relations with other countries, starting with China. Trump has also repeatedly called on India for high tariffs. Next Wednesday, India will lose its trade privileges with the United States as a beneficiary of the Generalized System of Preferences (GSP), US President Donald Trump announced on Friday. “We are in talks with India, we have removed their GSP and we are in the process of restoring it if we can get an appropriate counterweight proposal from them,” Robert Lighthizer, the U.S. Trade Representative, told members of the Senate Finance Committee. The two countries` attempt to strike a preferential trade pact follows the direction given by US President Donald Trump and Prime Minister Narendra Modi earlier this year during Trump`s visit to India, as a full-fledged free trade agreement (FTA) seemed elusive due to differences on a large number of issues. The United States is India`s largest trading partner, with bilateral trade of $88.74 billion in 2019-20. Bilateral trade between India and the United States amounted to $74.5 billion in 2017-18, up 15.5 percent from $US 64.5 billion the previous year. However, the figures are skewed in favour of India.
For example, India imported US$26.3 billion into GJ19 (April-December), but recorded a total export of US$38.8 billion. Trade Minister Anup Wadhawan had previously said that exiting the GSP would not have a significant impact on Indian exports to the US, given that the tariff advantage or savings on import duties amounted to only $190 million per year. The Indian administration called Trump`s move “unfortunate,” but said it would continue to try to establish strong economic relations with Washington. Under the limited deal, India is likely to cut tariffs on high-end bikes like Harley Davidson, promising better market access for agricultural products, including cherries, and soften its initial offer to relax price caps on medical equipment, a source told the UAE. India is willing to apply the trade margin on coronary stents and knee implants at the first point of sale (stock price) rather than imposing them on land prices, as was initially proposed, in order to make them more attractive to US companies like Abott. India`s trade surplus with the US contracted by reporting imports of oil and gas from the largest economy, which India pointed out. “India, like the United States and other nations, will always preserve its national interest in these matters,” the government said in a statement on Saturday. New Delhi said it sees the issue as part of its day-to-day economic relationship with the US and that it “will continue to build on our strong relationship with the US, both economically and from person to person.” India and the United States are trying to seal a bilateral preferential trade deal that will include a limited number of goods and services, but market access for dairy, medical devices and ICT products like mobile phones, which are demanded by Washington, remain sticky topics, an official said. . . .